Divorce Case Law-Are sick days marital property?

In re Marriage of Abrell, Ill, No.107755 (per Thomas) (February 4, 2010)
Facts:
During the course of his marriage, Appellee accrued 115 sick days and 42 vacation days through his employment, which were the subject of a potential division of property in an action for dissolution of marriage. The appellate court held the trial court erred in treating the accrued sick and vacation days as marital property, assigning a value to them, and including them in the marital estate. Appellant argued the appellate court’s decision reversed a 20-year practice in the courts of treating accrued vacation time and sick days as marital property subject to distribution.

Question:
As a question of law, are accrued vacation days and sick days marital property subject to distribution in an action for dissolution of marriage?
Holding:
No. Although Appellee’s accumulation of vacation and sick days occurred during his marriage to Appellant, the accumulation of those days had only a future value that was indeterminate and speculative; thus, the days were not marital property. Affirmed.
Reasoning:

Following Akers v. Akers, 729 N.E. 2d 1029 (Ind. App. 2000), the court found no present right to be paid for sick days other than by becoming ill. The court reasoned that Appellee’s accumulated, unused sick days had no present value and had only a future value that was indeterminate and speculative  and, thus, were not capable of division as a marital asset. Following the reasoning in Thomasian v. Thomasian, 556 A.2d 675 (1989), the court found the entitlement to vacation and sick days is not the same as property rights in pension or retirement benefits, which are forms of deferred compensation. Because vacation and sick days replace wages on days when the worker does not work, they are only an alternate form of wages. They may be, and often are, dissipated when the employee takes sick or vacation time to which he or she is entitled. Underscoring the speculative nature of sick and vacation days as property, the court noted the possibility that Appellee’s employer could change its policy on the right to receive compensation for accrued sick and vacation days by limiting or eliminating the right entirely.

The dissent argued accrued vacation days are Appellee’s property because they are a debt due to him as part of the compensation he had earned for work already performed. If the compensation was earned during the marriage, it is marital property. Although this particular asset is not as liquid as money in the bank or stocks in a portfolio, the lack of liquidity does not mean the asset is not property.

Further, under the Illinois Wage Payment and Collection Act, (Wage Act) 820 ILCS 115/1 et seq.(West 2008), once days are earned, the employer is obligated either to grant the employee the vacation time with pay or to pay the employee for the accrued days upon termination of employment. No employment contract or employment policy shall provide for forfeiture of earned vacation time upon separation from employment. Furthermore, although the Wage Act does not protect sick days, sick days may also constitute the employee’s property. The mere fact they are difficult to value does not render them nonproperty; they are a form of deferred compensation that appellee had the right to receive either during his remaining years of employment or upon termination of employment. Appellee acquired the sick and vacation days while he was married to Appellant; therefore, they are marital property. 750 ILCS 5/503a (West 2004). The dissent would reverse the appellate court and affirm the circuit court’s judgment.

Commentary:

Intellectually, I probably agree more with the dissent here. Not unlike unvested stock options that are marital property (at least in part), these benefits have value and should be included as property–despite the difficulties valuing them. Countless marital assets are difficult to value, yet remain part of the marital estate. However, as a practitioner, this decision takes one more issue off the table—which is a good thing. I just can’t imagine trying to quantify sick days on a marital balance sheet. SNP

Is Marriage Different?

Illinois’ policy is that children born to unmarried parents have the same rights as those children whose parents never marry.  But does that mean the restrictions on that child’s parent are also the same?  Illinois law requires a  custodial parent who wants to  permanently remove  a  child from the state to obtain permission of the court. The obvious policy of this law is to protect and preserve the relationship between the child and his other parent. Without arguing the merits of this law generally, the question is whether courts should apply this law if the parents were never married. Can the state limit where a never married custodial parent lives?

Assume an unmarried couple conceive a child as a result of a casual liason.  And assume mom, who has physical and legal custody, wants to move to Hawaii. Should the court restrict her freedom of movement, applying the same standard it would if mom and dad had been married, and at one time were an intact family?  Considering the policy behind relocation restrictions, a different standard makes no sense. But something seems wrong to me about restricting this never wed mother’s mobility.  I can’t put my finger on it, but it seems qualitatively different to me.  My visceral sense is that the unwed custodial parent should not be limited in their ability to move with the child.  But I can’t articulate why. Anybody have any thoughts?

Divorce Case Law-Allocation of employment benefits

Skelly v. Skelly, Mich. Ct. App., No. 287127 (per curiam)

Facts:

The trial court distributed a portion of Appellant’s retention bonus, paid before and after the divorce judgment, and a portion of all of Appellant’s future bonuses to Appellee. Appellant’s income included a first installment of a retention bonus from his employer. If Appellant remained employed by the employer until a specified date, which fell after the divorce judgment, he would receive the second and third installments of his retention bonus.  If, however, Appellant did not remain employed at the employer until the specified date, Appellant would have to repay all retention bonus monies. The trial court ordered the first two installment payments be divided equally between the parties and the third, which would be considered separate property, as it was paid after the divorce decree, would be divided so that Appellee would receive forty percent. Further, the trial court granted a forty-percent share of Appellant’s future bonuses to Appellee.

Question:

Did the trial court err in determining the first two payments of the Appellant’s retention bonus were marital property; the third payment was separate property subject to invasion; and in granting Appellee forty percent of any future bonuses Appellant may earn?

Holding:

Yes. Neither the retention bonus payments nor future bonuses were earned during the marriage and, therefore, should not have been included in the marital estate; and the bonus payment made after the judgment of divorce was not separate property subject to invasion. Reversed.

Reasoning:

The retention bonus was intended to entice the Appellant to remain at the company until a specified date, and if he left the company before that date, any advance payments of the bonus he received would have had to be repaid. Appellant did not actually earn the retention bonus until the date set in the retention agreement, which occurred after the judgment of divorce was entered. Therefore, even though part of the bonus had been advanced to him during the marriage, the retention bonus was not earned during the marriage; thus no portion of the retention bonus was marital property.  Likewise, the third installment should not have been considered separate property subject to invasion because Appellant had not yet earned it at the time of the judgment of divorce. Because future bonuses paid to Appellant are speculative and would not have been earned during the marriage, they were unrelated to the marriage, should not have been considered part of the marital estate and should not have been awarded in part to the Appellee. 

Commentary:

This case, while not an Illinois decision, illustrates a problem frequently confronting trial courts—how to allocate “golden handcuff” type bonus plans. I agree that the future bonuses are probably not marital property under a traditional definition (earned after the marriage) but doesn’t the marital estate get some credit for the fact that a portion of the value derives from past performance?  Frankly an easy non-offensive solution would be to give the other spouse a piece of the future bonus as additional “maintenance” rather than property.

Case Law-Order of Protection

In re Marriage of Holtorf, Ill. App. Ct. 2nd Dist., No. 2–09–0872 (per McLaren)

Facts:
Appellant was arrested for the third time for retail theft, while she had her two minor children with her. During the previous arrests, Appellant had either left her children unattended in a running car or had at least one of the children with her in a store. After receiving an order of protection, Appellee filed a petition for dissolution of marriage with an amended petition for an order of protection and a motion to consolidate the initial order of protection with the dissolution, which the court granted. The court then entered a plenary order of protection. Appellant argues the trial court erred as a matter of law in entering both the emergency and plenary orders of protection solely on the basis of a finding of child neglect because the trial court could issue an order of protection upon a finding of neglect only if the petitioner were a high-risk adult with disabilities.
Question:
Did the trial court err as a matter of law by entering emergency and plenary orders of protection based on its determination of a finding of child neglect rather than abuse under 750 ILCS 60/201(a)(ii),(b)(ii) and then by denying a motion to vacate the orders of protection?
Holding:
Although the trial court erred in ruling that neglect was a proper basis for the issuance of the emergency and plenary order of protection, it did not commit reversible error in issuing the orders of protection or in denying the motion to vacate the orders of protection. Affirmed.
Reasoning:
The trial court’s issuance of the plenary order of protection based on a finding of neglect was improper because the only mention of “neglect” in the Illinois Domestic Violence Act of 1986 (Act) is in the context of high-risk adults with disabilities. See 750 ILCS 60/201(a)(ii), (b)(ii)(West 2008). However, in affirming the trial court’s judgment, the appellate court stated it was not limiting itself to the trial court’s rationale or the parties’ arguments. The appellate court found the allegations against Appellant, if proved, rose to the level of physical abuse as defined in section 103(14)(iii) of the Act as “knowing or reckless conduct which creates an immediate risk of physical harm.” 750 ILCS 60/103(14)(iii) (West 2008). The court noted that the potential for immediate physical harm, in either bringing the children into the store, or leaving them in a running car while committing a theft, is “manifest.”

Commentary: This is a strained analysis intended to get to the desired result. The court specifically found it was not limited to the rationale of the trial court or the parties’ arguments. True–but it seems a bit too proactive to me. The appellant was right but lost anyway.

Toxic Parenting

It’s no secret that people often use their children to achieve their goals in family court. Despicable, but all too common. Probably the most disturbing dynamic is the parent that tries to gain custody by being a child’s friend or buying the child’s affection through permissiveness or other bribery. While the other parent wants to impose structure, rules and discipline, the subversive parent destroys those constructive attempts to parent.

If the child is younger,  responsible parents can counteract the ploy  since courts  can remedy–or at least contain– this conduct.  But what if the child is 16? Courts are loath to defy a strong-willed adolescent who wants to live with dad or mom,  regardless of  their lousy parenting. And naturally that child, embroiled in adolescent turmoil, craves the more permissive household–not knowing how potentially toxic it may be to their long term welfare.

The parent who successfully gets the child, the so-called  winner (at least in their mind),  achieves their goal at the cost of their child’s welfare.  And there  is little the more responsible parent (or the court) can do. Nefarious conduct is rewarded. One of the truly disturbing dynamics in family court.

The Goldman Saga and Speedy Justice

While it is obvious, the Goldman saga confirms the need for family court to resolve matters as quickly as possible. That case was obviously impacted by the international complications–but what about the cases our courts do have control over. There is no excuse for custody cases to span years. The turmoil to the family is awful while the case is pending and no there is no chance of any healing. 

Why are cases typically delayed? Poor lawyering–certainly. Judges who have trouble making hard decisions–absolutely. Inefficient procedures and poor case management–undoubtedly.  But these are simply not good excuses. Technology allows us to be so much more efficient. We need to brainstorm ways to harness its powers for the good of families in distress. We need to enhance our management skills to more efficiently manage the conflict. While the system cannot solve everyone’s problems, its role is to resolve them–in a fair, timely and efficient manner.

The Goldman family had little choice but to endure their nightmare. Let’s try to make sure other families don’t similarly suffer, where we can control the outcome.

Rethinking no-fault divorce

Lex just read an interesting article by W. Bradford Wilcox published in National Affairs. The article, “The Evolution of Divorce,” examines how divorce has evolved since the concept of no-fault divorce emerged. http://bit.ly/16zwKB

Wilcox persuasively argues that divorce, as it has evolved since the advent of no fault laws in the 1970s, has disproportionately affected poor and working class communities.  He calls for divorce reform including rethinking notions of  fault.

Wilcox recommends allowing courts to consider the behavior of spouses in its decisions concerning alimony and property division. This would arguably act as a deterrent against such behavior.

Other than possibly prolonging litigation while people attempt to argue their respective culpability, consideration of fault makes sense.

First, no-fault divorce is counterintuitive to litigants.  It denies the intense feelings of loss and betrayal that people frequently feel when their spouses violate their vows.  Shouldn’t they be allowed a controlled forum to express this sense of loss?  Why shouldn’t a court be able to consider an extramarital affair, especially in a short marriage, when it is determining issues of alimony or division of property?  Is it implicitly improper to reward or punish someone for their behavior in divorce court? Lex doesn’t think so.

I started my career long after the fault debate was resolved in favor of no fault. But as the world turns and the awful results of “casual divorce” play out, it might be time to rethink this issue. Any thoughts?

Abuse of Abuse

One of the problems family courts regularly  confront is lawyers and litigants who improperly use domestic violence proceedings as expedited ways to either procure custody or block visitation. Instead of filing appropriate pleadings (where full discovery and preparation are allowed), certain people choose the more expedient option to seek immediate relief under the pretense of a claim of abuse.

Here is the problem. First, the system gets overloaded with claims and that detracts it from being able to effectively address  legitimate claims of abuse.  Next, courts understandably are reluctant to ignore serious claims, even if  they simply are based upon unsupported testimony.  Manipulative people exploit this fact to achieve their goals. It then takes many months, if not years to unwind the matter and the truth may never be ascertained. During the process, people run out of money or the will to soldier on, and the perpetrator of the false claim is rewarded with their desired result.

And regrettably there is no solution. The system cannot impede people’s access to a domestic violence proceeding because some improperly use the proceeding for their nefarious ends. However, courts should monitor lawyers who regularly bring domestic violence proceedings as companions to new case filings.  Perhaps those lawyers should be scrutinized a bit more closely than others who file claims that more in line with societal averages.  Shame on them!

Even well intended lawyers get caught up in client’s oftentimes hysterical claims. We must probe and determine whether the claims are real, imagined, exaggerated or pure fiction. We must, like courts, err on the side of safety but we must also try to discern the circumstances before reflexively responding with a quick trip to the courthouse.

Lex finds it absolutely despicable when people exploit the system’s well intended efforts to protect victims of domestic violence.  The abuse of abuse proceedings are real and regrettably irresolvable.

The Lawyer’s Job

” But the job of a lawyer rendering advice is not to seek to satisfy the client’s wishes, but it is to inform the client, as objectively as possible, what the law requires or permits and make every effort to ensure compliance. I think that is a lawyer’s duty whoever the client is, a public official or a private enterprise, and however anxious the lawyer is to please the client, the advice should be informed, honest, and as objective as possible. It should not depend on the client’s desires or even on a view as to the desirability of the end sought.”

Nicholas deB. Katzenbach, Esq. (Former Attorney General of the United States). Remarks at the Opening Session of the 2009 American Law Institute, upon Receiving the Judge Friendly Medal.

Nothing Personal

Lex just met a former public defender who recently became a family lawyer. She formerly handled death penalty cases. Life or death stuff. And what she told me was interesting. The practice of family law was similar to criminal law; but the major difference was that the family lawyers are much more contentious and tend to personalize things (present company excluded, of course).

Why is that? Is there something inherent in the practice that makes many lawyers personalize their client’s angst? Or is the type of person who is attracted to this practice prone to this, oftentimes, anti-social behavior?

Maybe the marketplace promotes this behavior. If we get reputations as bellicose warriors, willing to take extreme positions for the sake of “justice”, we will be rewarded with a full book of business (but who really wants that business).

For whatever reason, divorce lawyers do tend to personally download the conflict way too often. It is unhealthy for the client,  the family, the legal system, and for the lawyer. While sometimes it is hard not to get angry with despicable behavior, periodic reality checks are necessary to maintain objectivity. If everyone is a villain–nobody is.  

Do your job and then go home and hug your spouse and  kids. A better way to practice.