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I. Anthony v. Skolnick-Lozano, (No. 1270-13-2, March 4, 2014), Published
II. Weedon v. Weedon, (No. 1378-13-2, May 6, 2014), Unpublished
III. Cleary v. Cleary, (No. 1343-13-4, May 13, 2014), Published

These Virginia Court of Appeals cases clarify pre-marital contributions to another spouse’s separate property (Anthony), the 21-day limit on equitable distribution (“ED”) appeals (Weedon), [nonexistent] appellate jurisdiction over a show-cause denial (Weedon), and the mandatory content of time-delimited spousal support orders (Cleary).


I.

When a multi-part statute has leading sections that specifically apply before marriage and after marriage, [20-107.3(A)(1) and (A)(2)]; and a subsequent statutory section that is silent about when it applies; then does the later section [20-107.3(A)(3)(g) deal with before marriage, after marriage, or both? Which period or periods of time do you think should apply?

Anthony answers this question logically, and convincingly. Section 20-107.3(A)(3)(g) must apply before and after marriage. No statutory wording justifies disregarding traced contributions to another party’s separate property before the marriage, as the Anthony wife contends.

The Anthony husband also misconstrues 20-107.3(A)(3)(g). He claims all he has to do to recover a $14,000.00 pre-marital contribution to wife’s house is prove he paid the money. That is not enough, obviously.

The statute says:

“When the separate property of one party is commingled into the
separate property of the other party, or the separate property of
each party is commingled into newly acquired property, to the
extent the contributed property is retraceable by a preponderance
of the evidence and was not a gift, each party shall be reimbursed
the value of the contributed property in any award made pursuant
to this section.”

Code § 20-107.3(A)(3)(g) (emphasis added).

Wife did not contend husband’s money was a gift. But husband was entitled to get back only the appreciation or depreciation of the contributed property, not the contributed property itself. Think of it this way: The $14,000.00 was an investment, the value of which might go up or down. In fact, the house burned down after the marriage, and nobody introduced evidence of how much wife received in insurance proceeds.

A home reduced to ashes is almost definitely worth a different amount at ED than when husband contributed money. This is not rocket science. If the Virginia legislature had intended money-in to equal money-out, they would have said each party shall be reimbursed the contributed property instead of the value of the contributed property. Read the statute!


II.

Weedon appears to be an equally straightforward failure to understand a plain, unambiguous statute – this time regarding the appeal of a show cause outcome.

At ED, marital real estate is awarded to wife. Husband refuses to sign a deed effectuating the property transfer. Wife files a rule to show cause, and at the hearing the trial court declines to hold husband in contempt.

Wife appeals, claiming the judgment awarded her property and husband wouldn’t convey it. It looks like a no-brainer to win this appeal, right? Not so fast!

The statute, Code Section 19.2-318, says that:

“[f]rom a judgment for any civil contempt of court an appeal may be taken to the Court of Appeals.” (Emphasis added.)

Wife failed to obtain a finding of contempt. The time to appeal the ED award expired. And the real property is still in both names.

The court of appeals fits the denial of relief squarely within the Virginia Supreme Court ruling in Jenkins:

In Jenkins, the Supreme Court held that, “[i]f the General Assembly intended to create appellate jurisdiction to review a judgment refusing to hold a person in civil contempt, it would have used a phrase [in Code § 19.2-318] such as ‘judgment concerning’ or ‘judgment regarding’ any civil contempt.” Id. at 47-48, 704 S.E.2d at 583 (emphasis added). The Supreme Court “conclude[d] that Code § 19.2-318 does not provide appellate jurisdiction for either this Court or the Court of Appeals to review the judgment of the circuit court dismissing the rule to show cause and refusing to hold [a party] in civil contempt of court.” Id. at 48, 704 S.E.2d at 583.

This blogger agrees that a “judgment for any civil contempt” means no appeal absent a contempt finding. But despite Jenkins and Weedon being correct decisions, the Code section that they interpret raises a major concern:

What if the trial judge erred, and husband really is in contempt?

If the trial judge erred, wife is in an impossible situation. She is deprived of the benefit of an ED award favorable to her, and she cannot appeal. Until she dies or enters into a sales contract, no material change in circumstances would appear to support a renewed show cause petition.

While this real property is languishing as a tenancy in common with a former spouse, it is at least in theory vulnerable to foreclosure by wife’s creditors or husband’s, and wife is unfairly deprived of the tenancy by the entireties protection that would be available to her with a new spouse.

Wife might not have the financial means to pay husband the $84,000.00 cash award that he received in another part of the ED judgment, unless and until she can refinance the joint real estate. No lender is likely to loan her money on property titled with an ex-spouse, and nothing motivates the ex-spouse to sign loan documents.

Furthermore, even if wife dies or enters into a sales contract, husband may argue res judicata. He may assert that his failure to sign the exact same deed has already been judicially determined not to be contempt.

The Virginia legislature should amend Code § 19.2-318 so that it refers to a ‘judgment concerning’ or ‘judgment regarding’ any civil contempt.” This would close a loophole that can only benefit a vengeful or recalcitrant contemnor.

Wife’s claim for attorney fees failed as well, making her a particularly unfortunate double-loser. The court of appeals ruled that dismissal of the show cause was not plainly wrong or without evidence to support it. If evidence exists that husband’s conduct was anything but contempt, it is not clear from the appellate opinion what that evidence might be.


III.

Cleary is about spousal support for a period of years, inadequately justified in the trial judge’s order.

There are two categories of spousal support orders, according to Virginia Code section 20-107.1(F).

The first type of support order is one granting, reserving or denying support. This sort of order must have written findings identifying the 20-107.1(E) factors that support the award.

The second type of support order is “periodic support for a defined duration”. For this kind of award,

“[f]indings shall identify the basis for the nature, amount and duration of the award and, if appropriate, a specification of the events and circumstances reasonably contemplated by the court which support the award.”

The trial judge’s divorce judgment is reversed for the reason that “neither the final decree nor any ruling from the bench connected the factual findings to the limited duration of the award.”

Periodic support, such as rehabilitative alimony, is premised on the idea that the support recipient may be able to get back on their financial feet after the marriage, if they receive financial assistance for a limited period of time. The reason the statute requires more of an explanation in this circumstance is that when the matter returns to court, it is necessary to determine whether the support recipient has become self-sufficient or not.

Unless support of a defined duration has the additional written explanation, the award ignores the second sentence of Code section 20-107.1(F). Interpretations that give meaning to all provisions of a statute are always preferred over a construction that renders certain words or phrases meaningless.
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.
            Cavallo is an unpublished Virginia Court of Appeals opinion issued February 25, 2014, involving the interpretation of a premarital agreement in the context of equitable distribution.[1]

            The premarital agreement provided wife one-half the net appreciation in husbands pre-marital separate businesses at the time of divorce. Wife’s evidence consisted of an expert witness who read asset values of current business financial statements into the record.  Wife’s lawyer never asked the expert about the net worth of the businesses.  The trial court’s monetary award to wife based exclusively on asset totals was properly reversed on appeal.

            It is fairly well-known that the net value of (or equity in) a business is not the same as its fair market value; instead, it is assets minus liabilities.  For example, a business that could be sold for a million dollars might have a net worth of zero if the owner had to take out a million dollar loan to acquire it.  Wife’s grossly deficient evidence of change in net worth was only one of her problems.

            Wife’s second major problem was her failure to offer evidence that the pre-marital agreement entitled her to utilize a particular business valuation method. (The court of appeals points out that there are three regularly accepted formulas for business valuation; income capitalization, the market-based approach and the asset-based model.)  Wife never invoked any of these formulas.  Thus, she failed to meet her burden concerning both elements that she was responsible for proving.

            Finally the appeals court said that attorney fees awarded to wife needed to be recalculated.  Since wife did not establish her right to any appreciation in husbands separate business property, she could not claim attorney fees under the pre-marital agreement.  Wife was entitled to some attorney fees, but it was impossible to tell what exactly the fee award in her favor was for.  So that part of the case went back to the trial judge.

            It is interesting that even though wife had competent counsel, she would fail to complete either prerequisite to receiving a share of net appreciation of husband’s businesses.  Further, a competent judge’s equitable distribution award was partially reversed.   This goes to show that even with good lawyers and judges, it’s hard to get everything right.
         





[1] Husband was represented the Bowen law firm, while wife received legal services from Lieblich and Grimes.  Both are well-respected firms.  The lower court judge was the Honorable Jan Brodie.
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

Recent Virginia Cases

Mayer v. Mayer, January 14, 2014

http://www.courts.state.va.us/opinions/opncavwp/0724131.pdf

A party may still petition for continued child support after a child turns 19 or receives a high school diploma, if the child is severely mentally or physically disabled, and support is still being paid.  Here, daughter had completed high school but father did not know it, and he was still paying child support when the mother filed her petition. A trial court cannot award attorney fees without a factual predicate.

COMMENT: The facts are narrow, limiting the value of this opinion as precedent.  It is unlikely that many people paying child support would not know that their child graduated from high school or turned 19, and would still be paying child support after one of those events -- at the moment when the child support recipient filed to extend a child support order.  Most parents know when their child graduates from high school or turns 19.






Griffin v. Griffin , January 28, 2014

http://www.courts.state.va.us/opinions/opncavwp/1177131.pdf

When a retirement plan is not covered by ERISA, [because it is exempted by 29 U.S.C. § 1055 (C)], the retirement benefits had been assigned in a property settlement agreement (PSA) incorporated into a final judgment, the plan participant changed the beneficiary to his new wife in violation of the PSA and final judgment, and the plan participant died; a surviving spouse may still obtain a QDRO ordering plan payments to her children.


      J. Huff issued a 12-paged dissent asserting that the plan was covered by ERISA.  Therefore, the dissent argued, federal law preempted state court jurisdiction, and the circuit court had correctly refused to enter a QDRO.

Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

Advocacy Building Blocks in Virginia Law

            One of the great benefits of unreported Virginia opinions is the citations they contain to reported opinions.  The same case law authorities are quoted so frequently that appellate judges seem to be stockpiling them as if they were building materials.  To me, they are the equivalent of bricks, drywall, and door frames for a homebuilder. I store them away for future use in oral argument, written motions and appellate briefs.

            To illustrate the key words and phrases that I index, here are two from my collection -- child support and clerical error:

Child Support:           

            Related key words:

                    credit
                    non-conforming
                    variation
                    modification
                    factors
                    CS

+++

Relevance of payor's spouse in a child support matters:

"[R]emarriage may change a parent's ability to provide support for his or her children by either
increasing or decreasing that parent's expenses and by altering the utilization of the parent's own funds."

Orlandi v. Orlandi, 473 S.E.2d 716, 23 Va.App. 21, 29 (Va. App., 1996)

+++
Section 63.2-1900 Definitions "Health care coverage" means any plan providing hospital, medical or surgical care coverage for dependent children provided such coverage is available and can be obtained by a parent, parents, or a parent's spouse at a reasonable cost.

+++

Here are the general rules for paying support pursuant to a court order:  1.  Overpayments of support, and payments in advance never entitle you to a credit against future support that you owe.  2.  Payments to third parties and payments in kind (gold bricks, for example) rarely are allowed to reduce the dollar amount you owe directly in support. In other words, you do not get credit for doing those things. Getting credit for such conduct is complicated, and better not attempted at all.  3.  Underpayments of support can always be supplemented.  However, you should never underpay without a valid reason, since failure to pay support is often contempt of court and may land you in jail.  4.  You may never reduce or under-pay support by off-setting anything your ex owes you (like rent) except for child support; and you may ONLY adjust for child support owed to you if the adjustment has been authorized by written court order (as we expect yours will be). And finally,  5.  Support can rarely be reduced or modified by any agreement you make directly with your ex-spouse.  The times when you are allowed to do this are so exceptional that you are unlikely to ever qualify.  It is safer not to change your support payments until after going to court and obtaining a modified order.

+++  [W]e have consistently held: "[A] former spouse must make payments according to the court’s decree; a spouse’s delay in pursuing enforcement, or acquiescence by accepting a lesser amount than the court award, or an agreement to accept a lesser sum than the award, will not relieve the obligor nor will it prevent accumulation of an arrearage."  Schmidt, 6 Va. App. at 504, 370 S.E.2d at 313 (citing Richardson v. Moore, 217 Va. 422, 229 S.E.2d 864 (1976)).  Virostek, 20 March 2012  Record No. 1546-11-4

+++   CS cannot be non-conforming unless there was a CS award. Junes, 43 Va App 9  Credit for non-conforming payment is an exception to statutory limitation on retroactive modification of past due CS.  Gallagher, 35 Va App 470, 476.  CS deviation requires written findings. Mayers, 15 Va App 587, 592.  20-1081 (B)  CHILD CARE COST including DAY CARE. are mandatory inclusions in CS formula. 20-108.2(F) But failure to adequately prove the expense allows court to omit it.  Bowers, 4 Va App 610, 617.

++++++++  PRIVATE SCHOOL AND COLLEGE:  "Decisions concerning child support rest within the sound discretion of the trial court and will not be reversed on appeal unless plainly wrong or unsupported by the evidence." Smith v. Smith, 18 Va.App. 427, 433, 444 S.E.2d 269, 274 (1994). Joynes contends that the trial court lacked statutory authority to order payments of child support for educational expenses. However, Code § 20-108.1(B) clearly states that the presumptive child support amount may be rebutted. Such a finding shall be determined by considering several factors "affecting the obligation, the ability of each party to provide child support, and the best interests of the child." Code § 20-108.1(B). One of these factors is "[d]irect payments ordered by the court for .. education expenses, or other court-ordered direct payments for the benefit of the child . ." Code § 20-108.1(B)(6).       

We have applied this language in finding that "a parent may be required to pay for private educational expenses, even though such expenses exceed the guidelines, when there is a demonstrated need for the child to attend private school and the parent has the ability to pay." Ragsdale v. Ragsdale, 30 Va.App. 283, 295, 516 S.E.2d 698, 704 (1999) (citing Solomond v. Ball, 22 Va.App. 385, 391, 470 S.E.2d 157, 160 (1996)). In making this determination, the trial court must consider "factors such as the availability of satisfactory public schools, the child's attendance at private school prior to the separation and divorce, the child's special emotional or physical needs, religious training, and family tradition." Solomond , 22 Va. App. at 391, 470 S.E.2d at 160.  Joynes v. Payne, 35 Va. App. 386, 407, 545 S.E.2d 561 , 571 (Va. App., 2001)

+++  SPOUSAL SUPPORT APPELLATE REVIEW  When determining a spousal support award, the circuit court “must consider all the factors enumerated in Code § 20-107.1(E),” Miller v. Cox, 44 Va. App. 674, 679, 607 S.E.2d 126, 128 (2005), and set forth “findings or conclusions identifying the [Code § 20-107.1(E)] factors . . . that support the spousal support award,” Robinson v. Robinson, 50 Va. App. 189, 196, 648 S.E.2d 314, 317 (2007).  When the record demonstrates, as it does here, that the trial court has duly considered the Code § 20-107.1(E) factors, “its determination ‘will not be disturbed except for a clear abuse of discretion.’”  Brooks v. Brooks, 27 Va. App. 314, 317, 498 S.E.2d 461, 463 (1998) (quoting Dodge v. Dodge, 2 Va. App. 238, 246, 343 S.E.2d 363, 367 (1986)).  See also: support credit non-conforming child support variation modification factors UIFSA  CS cannot be non-conforming unless there was a CS award. Jones v. Davis, 43 Va. App. 9, 595 S.E.2d 501 (Va. App., 2004)  Credit for non-conforming payment is an exception to statutory limitation on retroactive modification of past due CS.  Gallagher, 35 Va App 470, 476.  CS deviation requires written findings. Mayers v. Mayers, 425 S.E.2d 808, 15 Va.App. 587 (Va. App., 1993).  20-108.1 (B)  CHILD CARE COST including DAY CARE. are mandatory inclusions in CS formula. 20-108.2(F).  But failure to adequately prove the expense allows the court to omit it. Bowers v. Bowers, 359 S.E.2d 546, 4 Va.App. 610 (Va. App., 1987).

+++  “[T]here shall be a rebuttable presumption in any judicial or administrative proceeding for child support . . . that the amount of the award which would result from the application of the guidelines set out in § 20-108.2 is the correct amount of child support to be awarded.” Code § 20-108.1(B).  “[D]ecisions concerning child support rest within the sound discretion of the trial court and will not be reversed on appeal unless plainly wrong or unsupported by the evidence.” Barnhill v. Brooks, 15 Va. App. 696, 699, 427 S.E.2d 209, 211 (1993) (citing Young v. Young, 3 Va. App. 80, 81, 348 S.E.2d 46, 47 (1986)).  “[S]upport must be based upon ‘circumstances in existence at the time of the award’ and not upon speculation or conjecture.” Brooks v. Rogers, 18 Va. App. 585, 592, 445 S.E.2d 725, 729 (1994) (quoting Payne v. Payne, 5 Va. App. 359, 363, 363 S.E.2d 428, 430 (1987)).  The decision whether to deviate from the child support guidelines is within the discretion of the trial court. See Rinaldi v. Dumsick, 32 Va. App. 330, 337, 528 S.E.2d 134, 138 (2000).

+++  UIFSA 2008 Sec 211:  Only originating state can modify CS.  Continuing exclusive jurisdiction.  (All states ratified UIFSA, but not all ratified Sec 211.)

+++  CHILD SUPPORT CREDIT for NON-CONFORMING PAYMENTS  Child support payments required under a valid court order  become vested as they accrue, and the court is without authority to  make any change as to past due installments.  Generally, the terms of  a support decree must be strictly complied with and payments made  when due to the designated payee in accordance with the terms of the  decree.  When changed circumstances dictate a modification of a  support decree, the appropriate remedy is for the party to petition the  court to modify the decree.  The party or parties may not unilaterally  or bilaterally vary its terms. However, although a court may not retroactively modify a  child support obligation, allowing a payor spouse credit for  non-conforming support payments, in the limited situations where  permitted, is not a modification of the support order.  A court may,  when equitable and under limited circumstances, allow a party credit  for non-conforming support payments, provided that the  non-conforming payment substantially satisfies the purpose and  function of the support award and to do so does not vary the support  award.  Commonwealth v. Skeens, 18 Va. App. 154, 158, 442 S.E.2d 432, 434-35 (1994) (emphasis added) (citations omitted); see also Jones v. Davis, 43 Va. App. 9, 13-14, 595 S.E.2d 501, 503 (2004).   “‘Typically, two conditions must exist before credits will be given for non-conforming payments:  (1) an agreement by the parties which modifies the terms or method of payment; and (2) no adverse  effect on the support award.’”  Gallagher v. Gallagher, 35 Va. App. 470, 476, 546 S.E.2d 222, 225 (2001) (en banc) (quoting Wilderman v. Wilderman, 25 Va. App. 500, 506, 489 S.E.2d 701, 705  (1997)).  If these conditions are not met, “‘payments made by an obligated spouse over and above  court-ordered monthly support are considered gifts or gratuities.’”  Buxbaum v. Buxbaum, 20  Va. App. 181, 186, 455 S.E.2d 752, 755 (1995) (quoting Sanford v. Sanford, 19 Va. App. 241, 248,  450 S.E.2d 185, 190 (1994)).  A further limited exception exists, inapplicable here, where the  custodial parent has agreed to relinquish custody on a permanent basis to the other parent.  Acree v.  Acree, 2 Va. App. 151, 157, 342 S.E.2d 68, 71 (1986).    

In Gallagher, we refined our prior cases, holding that “to the extent our case law may be  interpreted to hold that payments to ‘third party vendors’ may constitute non-conforming child  support payments for which the payor spouse is entitled to receive credit . . . we expressly reject  such an interpretation.”  35 Va. App. at 479, 546 S.E.2d at 226.  Examples of such “third party  vendors” include items such as “day care, doctor visits [and] food.”  Id. at 479 n.1, 546 S.E.2d at 226 n.1.  Absent an agreement between mother and father, payments made by father to a third party - 19 - vendor, in this instance a school, are considered gifts or gratuities and may not be credited toward  father’s child support obligation.  Zedan v. Westheim, Va App 2012

+++  PRESUMPTIVE GUIDELINE AMOUNT IS CORRECT:  Code § 20-108.1(B) provides in part: In any proceeding on the issue of determining child support under this title, . . . the court shall consider all evidence presented relevant to any issues joined in that proceeding. The court’s decision in any such proceeding shall be rendered upon the evidence relevant to each individual case. However, there shall be a rebuttable presumption in any judicial or administrative proceeding for child support, including cases involving split custody or shared custody, that the amount of the award that would result from the application of the guidelines set out in § 20-108.2 is the correct amount of child support to be awarded.  “Decisions concerning [child] support rest within the sound discretion of the trial court and will not be reversed on appeal unless plainly wrong or unsupported by the evidence.” Calvert v. Calvert, 18 Va. App. 781, 784, 447 S.E.2d 875, 876 (1994).

http://www.courts.state.va.us/opinions/opncavwp/0152134.pdf
+++ 

Clerical error:

            Related terms:

                  mistake
                  scrivener's error

The Virginia Supreme Court has “consistently held that the statutory authority of [Code  § 8.01-428(B)] should be narrowly construed and applied.”  Morgan v. Russrand Triangle  Assocs., Inc., 270 Va. 21, 25, 613 S.E.2d 589, 591 (2005).  Thus, “‘scrivener’s or similar errors in the record, which are demonstrably contradicted by all other documents, are clerical mistakes.’  Clerical errors cause the court’s record to fail to ‘speak the truth.’” State Farm Mut. Auto. Ins. Co. v. Remley, 270 Va. 209, 221, 618 S.E.2d 316, 322 (2005) (quoting Wellmore Coal Corp. v. Harman Mining Corp., 264 Va. 279, 283, 568 S.E.2d 671, 673 (2002)).

“‘Examples of clerical errors include a typographical error made by a court reporter while transcribing a court proceeding, or an unintended error in the drafting of a divorce decree.’”  Morgan 270 Va. at 25-26, 613 S.E.2d at 591(quoting Wellmore, 264 Va. at 283, 568 S.E.2d at 673).

+++ Code § 8.01-428(B) allows for a trial court to correct clerical mistakes.
 “Scrivener’s or similar errors in the record, which are demonstrably  contradicted by all other documents, are clerical mistakes.” Zhou v. Zhou, 38 Va. App. 126,  133, 562 S.E.2d 336, 339 (2002). “Scrivener’s errors tend to occur singularly.” Westgate at  Williamsburg Condo. Ass’n, Inc. v. Philip Richardson Co., Inc., 270 Va. 566, 576, 621 S.E.2d  114, 119 (2005).

 In Dorn v. Dorn, 222 Va. 288, 279 S.E.2d 393 (1981), the Supreme Court of Virginia  held that an attorney’s error in drafting the final decree of divorce was a scrivener’s error. In  Dorn, the attorney wrote that father’s child support obligation for each of the two children was  $100 bi-weekly, as opposed to $100 per month. Id. at 290, 279 S.E.2d at 394. Father had paid  the support as $200 per month, or $100 per month for each child, for several years. Id. The  attorney who drafted the document explained that he changed “per month” to “bi-weekly” to  ensure that payments were made every other week, but he did not intend to change the amount of  support. Id.

 Likewise, in this case, wife’s attorney erroneously referred to Code § 20-107.1, instead of  Code § 20-107.3, in the prayer for relief in the cross-bill. The trial court noted that wife asked  the trial court to classify and value the parties’ real and personal property and also requested  temporary and permanent spousal support. To adopt husband’s argument that she was referring  to her request for spousal support by citing to Code § 20-107.1 would mean that she would have  been asking for spousal support in three different ways. The trial court concluded that this was “nonsensical.”

http://www.courts.state.va.us/opinions/opncavwp/0589133.pdf
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.
            The Virginia Court of Appeals issued four (4) unreported decisions on 30 July 2013 that are worthy of consideration.  The cases of Naseer, Sewell, Macione and Harris will each be discussed in turn.  The opinions of the court are here:  http://www.courts.state.va.us/wpcau.htm

+++

            Naseer is about bigamy.  Wife concealed that she was married to someone else when marrying Moghal.  She may or may not have genuinely believed she was divorced when her spouse said “I divorce you!” three times.  In any event, she never mentioned the incantation to Moghal, and it was insufficient to end her marriage under Virginia law.

            While the trial court considered whether Naseer was married to Moghal or not, it awarded (and he paid) $27,000 in temporary spousal support.  Later, the trial court ruled Naseer had committed bigamy when she attempted to marry Moghal while married to someone else.  The court annulled the putative marriage to Moghal as void ab intitio, and ordered Naseer to pay Moghal back the $27,000 she had received from him.

            The Court of Appeals declared that temporary support is provisional; it can always be reversed.  The same is not true of support pursuant to a final order. Also, a judgment of annulment at trial is always interlocutory if there is an issue of support repayment still pending.

+++

            Sewell involves a husband seeking  to reduce spousal support.  After a 27-year marriage, the parties had averaged Sewell’s last three years of earnings in calculating alimony, because his income fluctuated so widely.  Spousal support was $9,000 a month, subject to modification upon proof of a material change in circumstances.

            In the year following his divorce, husband voluntarily switched to a lower-paying job for reasons that might have justified the job change, had he corroborated them, but his own testimony was his only evidence.  It was not enough to lift his conduct out of voluntary impoverishment or neglect.  Husband failed to meet his burden of proof that lower-paid employment was reasonable, and that it was fair of him to force his ex-wife to gamble that her alimony might go up or down.  The trial court found no material change in circumstances.

            The Court of Appeals agreed, saying that there is no hard and fast rule about a material change of circumstances affecting spousal support.  The appeals court was not going to second-guess judicial discretion of the trial judge.  Furthermore, the burden of proof is no different when attempting to modify support set by consent agreement than it is when modifying support imposed following an adversary proceeding.

            Husband made four important mistakes:

            (1) He should never have averaged his most recent three years of income to determine spousal support.  He should have used only the most recent 12 months.  If you do three-year averaging to set support, then you may have present three years of new evidence to modify support.  That would not have occurred to me, and I am sure it surprised husband.  When Sewell petitioned to lower his support, it had only been one year since the divorce.  The court had insufficient data to find a material change!

            (2) Sewell changed to a lower paying job of his own free will.  When income dropped even further, he expected ex-wife to share the pain based on his word, unsupported by documents or corroborating testimony.  He failed to prove the necessity that he take a lower-paying job.

            (3)            According to the appeals decision, Sewell understated income and failed to update discovery responses when true (significantly higher) income figures became available.  This muddled the issue of earnings, blindsided the spouse at trial and annoyed the court.  If you violate court rules (or pepper your evidence with half-truths, implausible omissions, or outright falsehoods), your credibility may suffer.

            (4)            Husband should not have encouraged the Court of Appeals to speculate that his past twelve months of income would continue over the coming two years.  Everyone knew he had up-and-down income, including him.  And the next two years of figures are not available yet.  If you recommend a formula that cannot be used because two-thirds of the required data is missing, and the court adopts the recommendation, you may have doomed your case.

            At the conclusion of the Sewell opinion, the court declares that earnings data preceding the most court ruling on support may be re-useable not as stand-alone evidence, but in a blended combination with new evidence for the purpose of showing a “trajectory of income that continued to deteriorate”.  In my view, this is surprising.

Here’s why:

            If Sewell permits substantive evidence previously considered to be re-introduced in a later proceeding and ruled on for a second time, it may be a judicial exception to res judicata.[1] Sewell holds, in dictum, that reintroduced evidence involving the same issue and the same parties is admissible a second time, provided that it is blended with new evidence that is substantially similar.  Trial courts can now reconsider at a modification hearing the weight and credibility of the same identical evidence whose credibility and weight they assessed and passed judgment on in the past.
        
            Traditionally, the time line for defining admissible evidence regarding a material change of circumstances commences on the date of the last support order.  Now, based on Sewell, it may start earlier.  It may be difficult to ascertain exactly when it starts.    I could be wrong, but that certainly seems to be what the court is saying.

+++

            Macione involves a husband recovering his separate property after placing it in joint names with his wife.

The case applies Virginia Code § 20-107.3(A)(3)(h), which provides,

                    “No presumption of gift shall arise under this section where (i) separate property is commingled with jointly owned property; (ii) newly acquired property is conveyed into joint ownership; or (iii) existing property is conveyed or retitled into joint ownership.”

            Interestingly, the trial court found by clear and convincing evidence that the marriage was a joint enterprise, and that husband’s transfer of property into joint names transmuted his separate property into marital property of the parties.  The court of appeals politely says “We disagree ...”  It then states that the record contains “no evidence or admissions from husband”.  That’s right, no evidence at all!  It is a rare case where the trial judge says there was clear and convincing evidence, and the appeals court says there was none.

+++

            Harris is an example of bad drafting in a property settlement agreement, compounded by a failure to read the agreement carefully before filing an appeal.  Essentially, the agreement says attorney fees are payable in the event of default.  The parties fight in court over the interpretation of their agreement.  Husband prevails, and asks for reimbursement of attorney fees.  The court says no fees, because there was no default.





[1] 'It is a fundamental principle of jurisprudence that material facts or questions which were in issue in a former action, and were there admitted or judicially determined, are conclusively settled by a judgment rendered therein, and that such facts or questions become res judicata and may not again be litigated in a subsequent action between the same parties or their privies, regardless of the form the issue may take in the subsequent action, whether the subsequent action involves the same or a different form of proceeding, or whether the second action is upon the same or a different cause of action, subject matter, claim, or demand, as the earlier action.'

Petrus v. Robbins, 196 Va. 322, 83 S.E.2d 408, 412 (Va., 1954)
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

Layman and the Separate Loan

      Occasionally, a Virginia equitable distribution case has a fact pattern so unusual that you are grateful it was appealed and generated a clearly reasoned, published opinion.  Such a case is Layman v. Layman, decided on June 11, 2013.

        I will make the facts simple:  During a 58-year marriage, husband mortgages his separate real property to purchase jointly owned marital real property.  During the marriage, the parties pay off this mortgage on husband’s separate property using marital funds.  Husband properly traces these transactions.

        The question on appeal is whether the separate property becomes transmuted into marital property, on the theory that “discharge of a debt secured by an asset that results in an increase in equity in the asset constitutes an ‘increase in value.’” Gilman v. Gilman, 32 Va. App. 104, 119, 526 S.E.2d 763, 770 (2000) (quoting Code § 20-107.3(A)(1)).  In other words, did paying back the separate loan increase the equity in the separate real estate?

        The answer is “No.” The Court of Appeals states the rule in this way: “[T]he discharge of an encumbrance using marital funds generates martial equity only in the encumbered property that was acquired using the proceeds of the loan.”  More concisely stated, borrowing and paying back changes nothing.  For property to change characterization for purposes of equitable distribution, you need to borrow from separate, buy something new that is separate, and pay down the new separate with marital funds.  That did not happen here.

        The opinion makes perfect sense.  If I lend you a dollar that belongs to me alone and we put it in an account that belongs to both of us, and then we pay it back out of money that belongs to both of us, you do not suddenly own part of my money.  We’re square; our transaction is zeroed out.  There is no increase in my separate equity.  The dollar I got back is exactly the amount that I lent us.  End of story.

Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.
      Virginia lawyers may not mine state motor vehicle records to solicit Virginia drivers by mail after they are charged with DWI, reckless, or any other driving violation.

            That is the result of the SCOTUS decision in Maracich v. Spears, decided June 17, 2013.  According to Justice Kennedy, writing for the 5-4 majority, South Carolina trial lawyers may not utilize motor vehicle records to solicit new clients “in anticipation of litigation” without running afoul of the federal “Driver’s Privacy Protection Act”.


           Here are the applicable laws (emphasis supplied):

18 U.S.C. Sec. 2721 Prohibition on release and use of certain personal information from State motor vehicle records (United States Code (2011 Edition))

  (a) In General.—A State department of motor vehicles, and any officer, employee, or contractor thereof, shall not knowingly disclose or otherwise make available to any person or entity:

    (1) personal information, as defined in 18 U.S.C. 2725(3), about any individual obtained by the department in connection with a motor vehicle record, except as provided in subsection (b) of this section; ...

  (b) Permissible Uses.—Personal information referred to in subsection (a) ... may be disclosed as follows: ...

    (4) For use in connection with any civil, criminal, administrative, or arbitral proceeding in any Federal, State, or local court or agency or before any self-regulatory body, including the service of process, investigation in anticipation of litigation, and the execution or enforcement of judgments and orders, or pursuant to an order of a Federal, State, or local court ...

                               +++

18 U.S.C. Sec. 2725 Definitions (United States Code (2011 Edition))
In this chapter— ...

  (2) “person” means an individual ...

  (3) “personal information” means information that identifies an individual, including an individual's photograph, social security number, driver identification number, name, address (but not the 5-digit zip code), telephone number, and medical or disability information, but does not include information on vehicular accidents, driving violations, and driver's status. [Footnote omitted].

         This means that attorneys trolling for business may learn from DMV the number of people charged with drunk driving in a particular zip code in a given month, but may not obtain a name and address from DMV in the hope of procuring a new client.[1]

            Names and addresses of defendants are publicly available in General District Court traffic cases, making DMV records unnecessary.  Thus, it appears that at least in Virginia, the traffic defense bar has an alternative means of identifying and soliciting prospective clients without violating federal law or Rules 7.2 or 7.3 of the Virginia Professional Guidelines [except for the blanket prohibition against in person solicitation of professional employment for compensation in a personal injury or wrongful death claim], in effect side-stepping the privacy protection that the Driver’s Privacy Protection Act was supposed to provide.








[1] In Maracich, attorneys were contemplating a class action case against car dealerships.  The data they sought from the South Carolina DMV would not have been available from court records.  But the point of the SCOTUS majority is that the conduct was trolling:  The lawsuit did not exist and might never exist, depending on the DMV response.

Tags:

Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

TECHNOLOGY AND THE PRACTICE OF LAW COMMITTEE


Attorney Professional Competence in Technology: An Introduction and Foundation for Enhancement

[Friday, June 14, 2013 -- 14:00-15:30

Cavalier Oceanfront Hotel, Virginia Beach, VA]

© 2013 EZ Justice PLC
[Lecture notes with hardware and software URL's appear here.]

      Good afternoon!  Welcome to the Introduction to Attorney Professional Competence in Technology.

      My name is Olivier LONG. I have a virtual law office and I practice family law in Maryland, DC and Virginia. 

      My colleague, Jim McCauley is Legal Ethics Counsel to the Virginia State Bar.  Jim teaches Professional Responsibility at the T.C. Williams School of Law in Richmond, Virginia.

      Alan Goldberg could not be with us today.   He practices business and tax law in McLean, Virginia, concentrating in IT and health care regulation.

                        +++

Here is how we are going to proceed:

      I am going to condense five hours of advice into 45 minutes of lecture on what hardware, software and safeguards a competent legal professional should be using.

      Then Jim will relate that conduct to the Virginia Professional Guidelines and Rules of Professional Conduct.

      At the end, we will have time for questions.

                        +++

      My preference would have been to deliver this lecture by iPad.  Unfortunately, the available projectors will not talk to iPads, so this presentation cannot be multimedia.  Live hyperlinks and slides for my lecture are available on the web.

                        +++

      The overriding principle in law practice technology is securing data and protecting the privacy of client information, while at the same time pursuing the goals of spending less time and delivering greater value to the client. 

      The major category of office software for lawyers consists of practice management programs like

Abacus

Amicus

Practice Master

These programs usually do such things as –

Document management

Contact Lists

EM archiving

Billing

Trust Account Management

Device Synching

In-office data security consists primarily of password management and hard drive encryption.

      My favorite password management software, also called a password vault, is 1-password.  I enter a lengthy password for access to all my logins, credit card and secure data.  It randomly generates up to 20-character passwords, and stores them without my having to memorize anything. 

      David Pogue writing for the NY Times earlier this month recommended Dashlane, which is a comparable product.

      The leading Email encryption provider is Symantec PGP.

      The highest-risk operations are outside the office, and they involve data transfer and data storage.  This zone of activity is called practicing law in the cloud. 

      The tech extreme in cloud-based practice is the virtual law office.  Stephanie Kimbro wrote in an ABA report that the virtual law office is:

“[A] professional law practice where an attorney is able to work with clients over the Internet through a secure portal from the establishment of the attorney/client relationship through to the payment of and final rendering of legal services”.

      However much or little you are doing on the Internet, when you allow client secrets to move outside your office, you need to take two steps:

1.         STEP NUMBER ONE.  Review the security policy of the vendor, and assure yourself it is sufficiently robust to protect the client data from loss or unauthorized access.  I will say this again: You need to read the service level agreement or terms of service, and the privacy policy at the outset and periodically.

Example: Box, a competitor of Dropbox

      Read the terms of service.

      Write to Box challenge security policies that appear contradictory or missing.

      Advise your client that you have vetted the service provider.

      Box files are encrypted in transit and at rest.  “In transit” means to and from their storage site.  At rest means in their cloud storage.

      Box is free if you are a solo practitioner like me.  Otherwise, it is free for two weeks, then $540 up front a year for up to 3 people, plus $180 per additional person.

      Incidentally, Box is generally considered safer storage than Dropbox.  If you use Dropbox, as I find most attorneys do, I recommend using VIVO, a free encryption program that works with Dropbox, and the use of two-factor authentication is absolutely required.

      Show of hands – Who does not know what two-factor authentication means? 

      You need to perform due diligence and exercise reasonable care. You often do better with products that are made for lawyers, as their terms of service are more attuned to a lawyer’s need to protect client confidences.

      The lack of privacy in social media and phone and Email communication is so much a part of the current national news, that the public expectation of data security may be expected to increase rapidly.  You should never be in a position where your client is more concerned about safeguarding their information than you are.  Any time you send or receive Email containing a social security number, or an admission of liability or guilt, you are risking a breach of attorney-client privilege.

      When you are considering utilizing an Internet service provider, make sure that their Email service and remote server provide encryption, multiple storage-site redundancy and brick-and-mortar security.  Find out if the company may use servers outside the United States where data is less secure.

      This care that is required of you in selecting an Internet storage firm, applies to cloud storage companies like Carbonite.

      It also applies to businesses providing SAAS, software as a service.  This is cloud-based software that you rent.  Examples are Clio, MyCase and RocketMatter.

      Two reasons to back up data to the cloud:

                            1.            Same document can be accessed by more than one person at the same time.

                        2.         Less chance of document getting lost, misplaced or destroyed.

      Three reasons not to purchase software:

               1.         Create a hedge against calendar-based malpractice errors.

                       2.         Avoid annual update fees.

               3.         The software is always current.

      Remember, we are talking about the two procedural prerequisites to placing client data in the cloud.  This data, called ESI, or Electronically Stored Information, is moving or at rest outside the walls of your office. 

      The first step was vetting the provider.

2.         STEP TWO is the second critical step, after you have performed the due diligence necessary to meet the requirements of the disciplinary rules, is making sure that you are providing the level of security sought by your client.

Example: Contract for legal services with check boxes --

      Encrypted Email

      Encrypted Cloud Storage:          ☐ Attorney holds the keys.

                                                              ☐ Storage provider holds the keys.

      VOIP or Cellular vs. Wired Voice Communications

      Wickr [a communications site where all words and voices disappear after a pre-determined number of minutes]

      You should establish your security policy, obtain signed informed consent just like a doctor or hospital; and advise clients promptly in the event of any breach.

Let me re-state this message:

      Your responsibility as a Virginia lawyer is to assure encryption for your storage site, your device, and the data in transit.  Vet the provider, and determine the client’s need for security. 

                                          +++

      Now, I would like to step outside our focus on data security and talk about a couple of other principles of technological competence as a practicing attorney:

      A.         Going paperless is no longer optional.  You need to get a scanner, and start scanning everything that arrives on paper.

      The advantages in terms of efficiency are substantial:

1.         Offsite backup,

2.         Remote access,

3.         Instant access,

4.         Word searching,

5.         Collaborative review, and

6.         Document assembly.

      The hardware product I recommend is the ScanSnap IX500  (about $500.00).

      Straight-path for paper causes less jamming;

    Automatic document feeder;

    Black & white or color;

    Handles both sides of the page automatically;

    Fast & relatively high volume for the price

      Allows OCR and conversion to PDF on the fly

B.         You need a digital document platform in the courtroom. 

      If you do not already have a laptop, I recommend you consider a tablet computer:

      Real-time synchronization;

      Expedited document search and retrieval;

      Instant messaging with staff;

      Instant calendar access;

      Document markup by hand;

      Ability to focus attention of a judge or jury on particular words;

      AND

      Access to the market leading trial-presentation software: Trial-pad.

[Conclusion]

      The efficiencies of digital data have revolutionized law practice, raising the threshold definition of professional competence, while reducing lawyer hours and generally making more services available at a lower cost. 

      At the same time, cloud-based activity like Email, remote storage, and virtual law practice require a new level of diligence in protecting the confidences and secrets of clients.
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

Milam -- a Man Who is His Own Lawyer

    Milam v. Milam [unpublished], Record No. 0837-12-4, (Va. App., April 30, 2013), is a 28-paged opinion in which a Manassas solo law practitioner claims thirty-eight errors by the trial court.  The attorney, Kirk T. Milam, (“Husband”), fails to provide principles of law or authorities regarding thirteen of his arguments, and loses those outright.
       On the remaining twenty-five issues, Husband wins relatively little:  He receives back his separately-owned 2004 BMW improperly classified as marital, and scores a few inconsequential technical upsets requiring Jonathan C. Thacher, the judge designate in Rappahannock County, to add words to the final order. 
       If the result of your appeal is for the trial court to calculate and announce presumptive guideline child support before awarding the same child support as before; or the consequence of the appeal is an additional sentence in the final order declaring that the court considered all statutory factors before it makes the identical award; then the appeal hardly seems worthwhile.
       In his divorce, Husband refused to disclose the tax arrears on his income as sole breadwinner.  He controlled the finances, spent money on gifts and vacations with paramours, and predictably was assessed the entirety of the unspecified tax obligation.  Husband also obtained court permission for a custody evaluation conditioned on his pre-payment, and then declined to pay the evaluator.
       Husband was, according to Judge Thacher, “obstreperous, uncooperative and unwilling to disclose his earnings and income,” resulting in awards against him of $4,000 a month in alimony and child support, and $82,000 as wife’s attorney fees.  Since he never disclosed his income, we cannot measure how well he did representing himself.  Since he appears to have lost every argument in the trial court and nearly every issue on appeal except the automobile, one may speculate that even being a lawyer does not always help.
       The Court of Appeals sustained the spousal support award with no evidence of husband’s income, citing Andrews v. Creacey, 56 Va. App. 606, 696 S.E.2d 218 (2010); and Fadness v. Fadness, 52 Va. App. 833, 846, 667 S.E.2d 857, 865 (2008).  However, neither of those cases seems to support the proposition that spousal support is justified based upon need alone.  In Andrews, wife lost her support bid when she failed to produce evidence of her finances.  Fadness declares that a wife’s testimony and expense sheet are sufficient to establish her need; but states that on page 864 of the opinion -- not page 865; and does not appear to claim that wife’s evidence alone is sufficient basis for awarding her support.
       A generally recognized principal of family law is that spousal support requires proof of both need and ability to pay.  A support award lacking record evidence of ability to pay, or at least an imputation of income for the payor, may be clearly erroneous.  Though this blogger has not researched authority supporting the general rule, it is his considered opinion that a support appeal premised on proof of need alone may founder if it has no better citations that Andrews and Fadness.[1]





[1] According to the appellate court in Milam, “[T]he trial court noted that husband was an attorney with an active law practice, and concluded that sufficient evidence demonstrated that husband “ha[d] in the past and may in the future earn gross incomes in any given year in excess of $100,000.”  If the trial court imputation of income plus evidence of wife’s finances -- rather than wife’s need alone -- constituted the basis for affirmance of the support award, this writer believes the Court of Appeals might have said so more clearly.
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.
          This is a review of the Virginia Court of Appeals (VACA) decisions handed down on May 7, 2013 in Tsoucalas and Richter (unpublished), and Zedan (published).

+++

            Tsoucalas is an appeal by Lawrence D. Diehl, one of the premier divorce lawyers in Virginia.  You would expect an attorney with his experience and reputation to be at least partially successful, and he is.  VACA reversed an equitable distribution award that violated the parties’ pre-marital agreement (PMA).  But for the PMA, husband might have owed wife a reimbursement of the $135,000 she invested in his separately owned home, pursuant to the “commingling” statute, § 20-107.3(A)(3(g).

            Diehl lost his other argument, seeking reimbursement of husband’s “household expenses”.  The PMA, “poorly drafted” but unambiguous and fully compliant with VA Code § 20-149[1] said all purchases and debts during the marriage were separate property, with this exception: "The parties will maintain a joint bank account to be designated 'Household Account' and to be used for this purpose.  The funds included in this account from time to time are to be community property or to be treated as such for the purposes of this agreement."

            The parties never set up that bank account.  Therefore, no provision of the PMA provided for adjustment of “household expenses”.  Moreover, in the context of Virginia law on the PMA date, no statutory authority existed for adjusting parties’ contributions to living expenses, either.  (The law changed in 2006, with VA Code § 20-107.3(A)(3)(g) allowing for tracing of “separate to separate” contributions.)[2]

            VACA, in addressing the PMA de novo as required, never expressly declares whether or not the bank account was a material element of the paragraph.  By implication, though, the court clearly determined that it was.



            The lawyer for appellant in Richter, Fairfax County attorney William L. Schmidt, is another pillar of the family law bar in Virginia.  Unlike Lawrence D. Diehl in Tsoucalas, however, Schmidt came up empty-handed.  This demonstrates that even skilled, reputable counsel cannot guarantee appellate success.

            Richter is a grandparent visitation case.  PB’s parents never married.  His dad died.  Later, he lived with mom and his paternal grandparents for 19 months.  Then mom relocated with PB and cut off grandparent visitation.

            The grandparents sued for visitation.  They asked for an expert to study PB.  The trial court said “no” to protect PB, who was four years old.  The Court of Appeals affirmed.

            A parent’s fundamental right to raise a child is constitutionally protected, and the attempt of a non-parent to overcome a parent’s objection to visitation must meet an exceptionally high standard.  The standard in Virginia is expressed as follows:


  • “For the constitutional requirement to be satisfied, before visitation can be ordered over the objection of the child’s parents, a court must find an actual harm to the child’s health or welfare without such visitation.” A court reaches consideration of the “best interests” [of the child] standard in determining visitation only after it finds harm if visitation is not ordered.

Williams v. Williams, 256 Va. 19, 22, 501 S.E.2d at 418 (1998).

            Furthermore, ““[T]he actual-harm test cannot be satisfied by a showing that it would be better, desirable, or beneficial for a child to have visitation with a non-parent.”  Griffin v. Griffin, 41 Va. App. 77, 84, 581 S.E.2d 899, 902 (2003), (internal quotation marks and citation omitted).

            The trial judge wrote twenty pages of reasons why PB needed to be protected from possible emotional harm resulting from expert evaluation.  VACA found plenty of justification for concluding that the court’s ruling was not plainly wrong or without evidence to support it.  VA Code § 8.01-680.[3]

            Another high hurdle for grandparents is the appellate standard of review for discovery decisions.  Unless the discovery ruling was “improvident” and “affected substantial rights,” it will not be disturbed on appeal.  Here, as well, VACA upheld the trial judge’s refusal to permit the expert to interact with the child, despite the grandparents’ request pursuant to Rule 4:10.

            I believe the bottom line in Virginia is that if you are a non-parent and the child is a toddler, your chance of obtaining court-ordered visitation is pretty slim.


    
            Zedan seems to achieve a Virginia high-water mark for brazen misconduct by a party and incompetence of the attorney handling their appeal.  In a fifteen-page published opinion, VACA reviews the law of appeal bonds and delivers appellate counsel a sound and – in this blogger’s opinion -- roundly deserved verbal drubbing.

            This is an eight-year marriage annulled due to husband’s bigamy.  Husband’s child support arrearage exceeded two hundred thousand dollars;  and husband had two successive, meritless cases in the Virginia Court of Appeals.  The first appeal got slapped down with the child support judgment reaffirmed and an award of supplemental attorney fees.  Then, Fairfax Circuit Court Judge Brett Kassabian ordered the two hundred thousand dollar bond released to mom.

            In arguing for the return of the cash bond to the dad in his second appeal, dad's counsel apparently did things that, in this reporter’s opinion, may be worse than not knowing the law.  He argued the contrary of record evidence.  He selectively ignored facts.  And he advocated an understanding of the trial court opinion that was “simply incorrect”.  Counsel argued case law that was “not even remotely on point” and that had in any event been rendered obsolete "long ago" as a result of statutory changes.  Finally, counsel's proposed interpretation of Virginia statutes on appeal bonds made no logical sense and led to an absurd result.

            Lawyers not infrequently make procedural errors costing their clients an appeal.  But it is a rare case in which arguments are so unsubstantiated, so contrary to the law and evidence, and so incredible that the Court of Appeals instructs the lower court to award attorney fees.











[1] Virginia Code Sec. 20-149 provides: “A premarital agreement shall be in writing and signed by both parties. Such agreement shall be enforceable without consideration and shall become effective upon marriage.”
[2] The trial judge ruled the joint-account PMA paragraph “void”.  I believe “inapplicable” would have been a more appropriate term to describe a unfunded account.
[3] “When a case, civil or criminal, is tried by a jury and a party objects to the judgment or action of the court in granting or refusing to grant a new trial on a motion to set aside the verdict of a jury on the ground that it is contrary to the evidence, or when a case is decided by a court without the intervention of a jury and a party objects to the decision on the ground that it is contrary to the evidence, the judgment of the trial court shall not be set aside unless it appears from the evidence that such judgment is plainly wrong or without evidence to support it.”  [Emphasis added]. VA Code § 8.01-680
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.
        In Cruz, (published), Fairfax Circuit Judge Brett Kassabian[1] had properly dismissed a divorce case when wife had no live witness to corroborate the parties’ separation.
     
            Wife presented an affidavit, but the new VA Code Sec. 20-106(A)(iii) says you can only use an affidavit when there is no responsive pleading or no appearance on the other side.  Wife admitted husband’s counsel made an appearance but argued his pleading was late.  The Court of Appeals interpreted the statute by emphasizing that the preposition utilized is “or”, not “and”.  After Wife admitted the other side made an appearance, she could not use an affidavit.  The existence or non-existence of a responsive pleading became immaterial.

            This decision applied the “plain language” rule of statutory construction.  Since the statute was unambiguous, this case should never have been appealed.

            An interesting sidebar in Cruz is a warning to aggressive, trial-by-ambush defense counsel:  If you enter an appearance for the defense on the eve of a divorce trial, expect sanctions in the form of attorney fees.  Another dictum is that Judge Kassabian had ruled an untimely pleading was not a responsive pleading.  Had that been an issue before the appeals court, I suspect Judge Kassabian might have been reversed.  In this blogger’s view, the term “responsive” addresses the content of the pleading exclusively; it says nothing about its date of filing.



            Anderson, (unpublished), joins a seemingly interminable litany of appellate cases doomed before they are filed:  A hapless pro se party causes a train wreck in the lower court and thinks she can fix everything by hiring counsel and taking an appeal.  Almost invariably she cannot; the damage is already done.

            Here, wife made four catastrophic mistakes.  She went to court with no lawyer (mistake #1) for determination of a child’s school.  Fairfax Circuit Judge R. Terrence Ney not only selected dad’s school in neighboring Prince William County, but also transferred primary custody to dad.  Wife neglected to mention at the hearing that the court erred by changing custody when the only issue presented was choice-of-school.  (Mistake #2).

            Mom understandably felt blindsided, and filed a motion to reconsider.  That was the correct swing of the bat with insufficient force.  She failed to obtain an order to vacate, modify or suspend the final custody judgment within twenty-one days.  (Mistake #3).  After twenty-one days, the judgment became final; Judge Ney lost jurisdiction to modify, vacate or suspend.  Frequently, non-lawyers are confused by this.  The judge could still change the order, of course, but only upon proof of a material change in circumstances and the best interest of the child.  The court's error-correcting authority over the judgment would have at that point have disappeared.  Think of it as being like poured concrete:  After twenty-one days you can still take it out with a jackhammer but you can no longer move it around.]

            Mom appealed. (Mistake #4).  The Court of Appeals pointed out summarily that the motion to reconsider had not been ruled upon within twenty-one days. (Judge Ney issued a ruling, but did so after expiration of the twenty-one day period.)  If a trial court does not rule in a timely manner on a motion to reconsider, then the issue cannot be appealed.

            This is such a pitfall for the unwary practitioner that it bears re-stating:  If you note the substantive basis for your later-appealed objection orally (on the record), or at the foot of an order, and the judge does not correct the material abuse of discretion or clearly erroneous ruling within twenty-one days; then you may appeal.  However, if (as in Anderson) the only way that you bring the error to the lower court's attention is through a timely motion for reconsideration, then your right to appeal the error disappears after twenty-one days unless the court denies your motion before the revisory period expires.









[1] Judge Kassabian may be the only judge in recorded history to receive appellate affirmances in unrelated cases mentioning bigamy in a period of less than seven days.  The cases are Cruz and Zedan, discussed above.
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.
            The reported Virginia case of Patel makes important points about business valuation in equitable distribution (“ED”).  Patel v. Patel, Record No. 875-12-2 (VA App., April 9, 2013).

            Husband alleged his hotel and LLC interests were worthless or under water despite his earning $30,000.00 a month.   This did not ingratiate him with the Court of Appeals; he lost every argument.  Wife received 40% of the assets, $7,000.00 a month in spousal support, and $1,245.00 in monthly child support.

            Here are the rules applied in this decision:

1.            Experts are fact witnesses.  Trial courts may pick and choose among expert opinions so long as their reasons for doing so are not “plainly wrong” or lacking evidentiary support.  Smith v. Board of Supervisors, 201 Va. 87, 91, 109 S.E.2d 501, 505 (1959).   Howell v. Howell, 31 Va. App. 332, 341, 523 S.E.2d  514, 519 (2000).  Here, the parties had a total of five experts, and the Circuit Court’s decision to adopt the reasoning of the two hired by the wife is affirmed on appeal.

2.            Business valuation for ED may be based on net equity without considering revenue or difficulty of sale.

            Considerations underlying spousal support are “wholly different”.  Stumbo v. Stumbo, 20 Va. App. 685, 691-92, 460 S.E.2d 591, 594-95 (1995) (quoting Brown v. Brown, 5 Va. App. 238, 246, 361 S.E.2d 364, 368 (1987)).

3.            If fair market value minus debt yields a negative number as the equity in marital property, then the “Intrinsic” value for ED is not negative; it is zeroHodges v. Hodges, 2 Va. App. 508, 515 (1986).

            This makes sense.  Otherwise, a party might walk away from a negative number after divorce by obtaining a bankruptcy discharge.  Furthermore, startups often appear to have a negative net worth early in their existence due to fixed costs like equipment, inventory, advertising and marketing.  Even when liabilities exceed assets, many companies are profitable and not insolvent.

4.            Husband’s contention that the trial court should have disregarded his personal loans to his zero-value companies is disingenuous.  The Court of Appeals affirmed the propriety of including the promissory notes as marital assets in ED.

            If the rule were otherwise, business people approaching divorce would loan cash to their enterprise whenever it had a negative net worth, get the resulting payment obligation valued at “zero” in ED, and then reclaim their cash after the divorce was final.

5.            It is acceptable practice in calculating self-employment income for support purposes to average three (3) years of earnings.  In Patel, the lower court was smoothing-out the impact of non-recurring special depreciation losses that husband had subtracted from income.

Read about significant bias among psychological experts in the courtroom, in this news report published April 15, 2013:
http://medicalxpress.com/news/2013-04-bias-courtroom-impartial-experts.html
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.
          Funding a retirement distribution with a previously unnamed retirement plan is permissible after a divorce decree is final, according to the unpublished Virginia Court of Appeals decision in Forest v. Forest (Record No. 0836-12-4. March 12, 2013).

            The opinion is noteworthy for its back story -- its unusual length (14 pages) and its reversal of Judge Dennis J. Smith of Fairfax Circuit Court.  Judge Smith practiced family law for years, teaches the subject at George Mason University Law School, and is considered among the most knowledgeable domestic relations trial judges in Virginia.  Joseph A. Condo, representing the wife and prevailing party, is himself one of the premier divorce lawyers in Virginia.

            The facts are straightforward.  Husband and wife sign a property settlement agreement (PSA) dividing marital portions of their retirements. Husband surreptitiously depletes one of his retirement accounts, the court enters a final order of divorce, and then husband commits suicide.  Insufficient money remains in the retirement accounts identified in the PSA for wife to receive her agreed marital retirement share.

            Mr. Condo says to Judge Smith, in effect, “Allow wife to claim her retirement funds from a different retirement, not named in the PSA, since the one named was fraudulently depleted of most of its funds.”  Judge Smith declines to enter a Qualified Domestic Relations Order (QDRO) more than twenty-one days after entry of the final decree that taps into a retirement fund that the parties had not agreed to divide in their PSA.

            The issue on appeal is whether Virginia Code § 20-107.3(K)(4) authorizes the requested relief.  The statute provides:

      "The court shall have the continuing authority and jurisdiction to make any additional orders necessary to effectuate and enforce any order entered pursuant to this section, including the authority to:

                    * * * * * * *

          "Modify any order entered in a case filed on or after July 1, 1982, intended to affect or divide any pension, profit-sharing or deferred compensation plan or retirement benefits pursuant to the United States Internal Revenue Code or other applicable federal laws, only for the purpose of establishing or maintaining the order as a qualified domestic relations order or to revise or conform its terms so as to effectuate the expressed intent of the order."

            The Court of Appeals matches up the facts in Forest with those set forth in a prior opinion, Williams v. Williams, 32 Va. App. 72, 75, 526 S.E.2d 301, 303 (2000), and declares the retirement payout modification is allowable.  The match-up permits Forest to be unpublished; since its fact pattern is essentially identical to that of an established precedent.  I believe the exceptionally high number of pages written to deliver a mere reiteration of a prior ruling may be a subtle acknowledgement of the prestige of the lower court judge who is being reversed.

            If you analogize this appellate opinion to the tracks of a downhill skier, then one may say that very little room exists to vary the skier’s path on either side.  The court forecloses any major factual deviation by pointing to its earlier rulings that preclude changes to either the timing or the amount of retirement payouts.

            I believe a host of other factors, had they existed, would similarly prevent a trial court from exercising the revisory authority permitted here.  Those factors include a bankruptcy filing; the need to supplement retirement funds by crossing over from a defined contribution plan to a defined benefit plan or vice versa; and a situation in which the only available source of funds for topping off a claimant’s retirement share is non-retirement assets.  Additionally, in my view, relief would be curtailed if the only alternate retirement plan were burdened with a security interest; as for example, if a beneficiary had borrowed against their plan.

            Overall, the exception-to-finality loophole clarified here may rarely benefit equitable distribution practitioners.  Few QDRO’s involve drafting errors or fraud, and a limited number of retirees have more than one private retirement.
        
            The metaphorical “skier’s path” delineated by Code § 20-107.3(K)(4) and exemplified by Williams is so narrow that it is understandable how Judge Smith might have missed it.  Judges tend to be conservative when facing a choice between allowing an exception and upholding the finality of their decision.  When confronting this choice, judges usually select finality.  On the other hand, some fact pattern has to fit the statutory language allowing the court to “revise or conform ... terms so as to effectuate the expressed intent of the order”, in order for the law to have any meaning.  If the qualifying facts are not these facts presented in Forest, what could they possibly be?  Perhaps Judge Smith was thinking of a mistake in a retirement plan address or in an account number.

            The most important sentence in the Forest opinion appears in footnote 9:  “Our precedents neither encourage approbation and reprobation nor countenance fraudulent behavior.”  The court is saying that it is not about to allow a party to frustrate a contract by hiding money.  The court also points out that instead of relying on the statute, the wife might have sought relief under the PSA (for breach of contract and fraud).  But lawsuits are time-consuming and expensive.  When the legislature provides a conforming mechanism that is more cost-effective and rapid -- as it did here, and the litigant has been wronged, then she should be entitled to employ it.
           
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

  In a divorce battle fought by preeminent members of the Virginia trial bar, Edward D. Barnes and Ronald R. Tweel, over a Hunton & Williams partner’s 1.492 million dollar interest in his firm, among other high-stakes issues, Mr. Barnes' client, the husband-lawyer, prevails on two matters out of six.  Wright v. Wright, Record No. 0947-12-2 (Va. App., February 19, 2013).

            The 32-paged reported opinion subtly chides husband for raising too many issues, for arguing implausibly that fourteen (14) years of retirement contributions during the marriage are “entirely” separate property, and for seeking reversal of precedent without considering the interpanel accord doctrine.
[1]  Had husband’s employer and both parties’ counsel not been so prominent, I believe that the rather mundane errors made by the trial court would have been relegated to an unreported opinion.

            I will now explain the trial court's two (2) errors of law.

1.            The spousal support reservation.

            Wife asks for permanent alimony in her complaint.  The trial court awards wife four (4) years of support plus an open-ended reservation of support  thereafter.

            The Court of Appeals rules that a reservation of support is always required when spousal support is before the court.  The lower court erred in failing to limit the reservation to one-half the length of the marriage, as it was obligated to do pursuant to the statutory presumption and in the absence of sufficient evidence to overcome the presumption.  VA Code § 20-107.1(D).

2.            The definition of the marital portion of husband’s retirement.

            The second error of law is again the trial judge’s failure to establish the end-point of a time period.  This period of time would have closed out the definition of the marital portion of husband’s retirement.  The trial judge properly recognized that the beginning point was when husband became equity partner.  The defining period of time should have ended on the date of the parties’ last separation, but in the trial court’s final order there was no ending point.

+++


        Elsewhere, the Wright decision reviews the “deferred distribution [also known as the 'if and when'] method approach” to dividing a private pension, and describes how to calculate the “coverture fraction”.  The opinion defines the terms “intrinsic value”, “goodwill”, “bottom-up” valuation, and “excess earnings method” before consigning the choice between battling retirement valuation experts to what this blogger whimsically calls the “oubliette” of appellate decision-making -- the sound discretion of the court.











[1]  “[U]nder the interpanel accord doctrine, the decision of one panel becomes a predicate for application of the doctrine of stare decisis and cannot be overruled except by the Court of Appeals sitting en banc or by the Virginia Supreme Court.”  [Citations omitted.]
Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

Marx and Statutory Interpretation

Here is a simple test of logic:

         The Federal Rule says, “If a party satisfies condition ‘A’ then they are entitled
to relief ’B’, unless otherwise provided”.

         An applicable statute says that if a party satisfies condition “C”, then they qualify for “B” on that basis.

         The facts of the case are that the party satisfies condition “A,” but not condition “C”.

         Is the party entitled to receive relief “B”?

This is the fact pattern in Marx v.General Revenue Corp., (No. 11-1175), decided by the U.S. Supreme Court on February 26, 2013.  Voting 7-2, the Court granted relief “B” (consisting of an award of costs), holding that “otherwise provided” means “’contrary’ to the [Federal] Rule.”  In other words, the statute must countermand the Federal Rule if it is deemed to replace it; the Rule is unaffected by a code provision that merely establishes an additional pre-condition triggering relief.  Who would have guessed?

         If you had attempted to predict the majority opinion based on classical rules of statutory construction, you would have failed. You would have been wrong not because the commonly accepted interpretive tools did not apply but because they were applied in such an unconventional way.

         The decision adopted the unusual definition of the word, “otherwise,” as meaning “contrary.”  The Court avoided the “plain meaning” rule by asserting that the contrary of something is the only cognizable permutation of “otherwise provided”.

         Then, the Court found a reason why each of the regular techniques for squaring rules with statutes did not apply.  The Court chose to disregard the Latin phrase, inclusio unius exclusio alterius, which means, “inclusion of one excludes others,” for the reason that redundancy throughout the U.S. Code is “hardly unusual”.   Next, it skirted the “surplussage” rule that favors ascribing meaning to each word and phrase of legislation, by announcing that something may be repeated for emphasis and not to provide any substantive contribution.

         Okay, so the majority re-defined a commonly recognized term and found exceptions to usual and customary techniques for interpreting laws.  Why would they do that?  Are there any non-traditional decision-making criteria that could result in a corporation defeating an individual; and both dissenters, Justices Sotomayor and Kagan, being Obama appointees?



Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

            In Canning v. NLRB (No. 12-1115, January 25, 2013), the U.S. Court of Appeals for the D.C. Circuit invalidated presidential appointments during a claimed “recess” of the U.S. Senate on the ground that the vacancies had not arisen during that particular time period that the Senate was not in session. 

            They added a second ground for their opinion:  Recesses are only between legislative sessions and not at any other time.  The Senate was not in recess when the appointments were made because a new session had begun that same morning.

            In my opinion, four (4) facts are critical to understanding the ruling:

1.            The three judges are Republican appointments.

2.            The decision went against a Democratic president.

3.            The court provided its Constitutional interpretation of the word “recess,” even though this advisory portion of its ruling was unnecessary.  And,

4.            The 40-paged opinion makes only the briefest reference to the Senate’s resolution to remain in session by meeting “pro forma” every three (3) business days from December 20, 2011, through January 23, 2012 and conduct no business, while Senators were home for the holidays.

I.            Stale Vacancies

            Article II, Section 2 of the U.S. Constitution provides in pertinent part:

The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.           

Emphasis supplied.

            I agree with the Court of Appeals that the vacancies at issue here could no longer be filled during any recess, because the Senate had been in session after the date that the vacancies arose.  In other words, “vacancies that may happen” are significantly different from “vacancies that exist”.  The court’s acknowledgement of this difference is consistent with the limited role that the entire sentence prescribes.  The president is only supposed to fill empty positions in government when the Senate is unavailable for advice and consent.  If, as here, the president selects a person to fill a job that has been open for more than a year, the Senate is entitled to be involved.

            The court’s ruling on this point is so clear and unassailable that the opinion should have gone no further.  It is universally recognized that judges refrain from ruling on matters that are not essential to the controversy before the court.  The single-judge concurrence respects this rule; the two-judge majority does not.

II.            The Rule of Reason

            I believe that the appropriate way to construe a constitution, in addition to only doing so when required, is to use the same set of interpretive tools as for interpreting a contract.  A court should accord some effect to words rather than none at all when given a choice between those alternatives.  And I believe that where plausible alternative explanations exist for the specific words utilized, it is wiser to lend more weight to recent interpretive conduct than to actions long ago.

            Ideally, the application of a rule of construction to this “inter-“ or “intra-“ session power of appointment should be a result somewhere between the extremes of never available and available anytime at all.  The extremes consist of never allowing such an appointment (because Senators no longer travel by stage coach and recess for six months at a time, and are empowered to paper-over their own recesses); and allowing the appointment on any weeknight when the Senate adjourns that same evening and intends to reconvene the following morning.

            A.            Originalism

            Part of choosing between too much and too little presidential power does not consist of lending persuasive weight to what people did in the times of our founding fathers.  Since those lengthy legislative recesses from the past no longer occur, confining us to a constitutional interpretation tailored to facts that no longer exist does not seem to make much sense.  Nate Silver’s recent book, “The Signal and the Noise” (Penguin Press, 2012) describes the fallacy of over-sampling as purporting to glean truth from massive relevant but immaterial data that is actually nothing more than background noise. 

In logic, indiscriminate reliance upon the past justifies the rubric “post hoc, propter hoc” (after this -- because of this).  One event may follow another chronologically without any causal connection between them.  In other words, a prescribed manner of handling a set of facts three hundred years ago may precede us chronologically, but do so without shedding any light on how very different facts should be handled today.

            B.            Contemporary Conduct

            When judges construe ambiguity in contracts, they frequently look at conduct.  How parties themselves interpret ambiguous words often provides valuable insight into the words’ intended meaning.  Likewise, the centuries of life-experiences living under a constitution are going to be sometimes cumulative, and quite often transformative.  If a phrase is applied for centuries in different ways, logic would certainly suggest that recent conduct carry more evidentiary weight than conduct in the ancient past.  Just as custom and practice are important to determining words’ meaning in contracts, they should be in Constitutional law as well.

            The Canning case deals with two words, “adjournment” and “recess”.  Even people who are not legislators or constitutional scholars know the established meanings:  If Congress adjourns; it may be back the next morning.  If it is in recess, the members went home to their districts.  Either can take place in the midst of a “session”.  If the Senate is in recess, its members are unavailable to provide our president with “advice and consent”.  That is what I would call the form of the issue at hand, the key words and present-day definitions.

            What about the substance of the issue, namely the conduct of the U.S. Senate? 

“At the time of the President’s purported recess

appointments of the three Board members, the Senate was

operating pursuant to a unanimous consent agreement, which

provided that the Senate would meet in pro forma sessions every

three business days from December 20, 2011, through January

23, 2012. 157 Cong. Rec. S8,783–84 (daily ed. Dec. 17, 2011).

The agreement stated that “no business [would be] conducted”

during those sessions. Id. at S8, 783.”

Canning v. N.L.R.B., slip op. at 14.

            If courts allow the Senate to operate like this, then the Senate can easily prevent an Appointments Clause recess from ever occurring.  All they need to do when they are out of town is leave one senator in Washington to bang the gavel every three days.  This has the practical effect of making the Appointments Clause a nullity; it tilts the balance of power away from the President and in favor of the Senate.  The Senate cannot possibly be permitted by its own continuing resolution to render meaningless a clause of the U.S. Constitution.  This artifice – the illusion of in-session status -- does violence to the Constitution.  It should never have been condoned by the U.S. Court of Appeals.[1]

            Moreover, the “substance” of the Senate’s conduct – the perpetuation for over 30 days of a pretense of being in session due to “pro forma” convocations without business being conducted and with most Senators far away – should be obvious to anyone without a political agenda.  The Senate was in recess.

            A fundamental rule of law is that you cannot do indirectly what you are not allowed to do directly.  For example, if a protective order requires you keep away from someone, you cannot enlist a relative to harass the person and thereby circumvent the order.  In the facts presented in Canning, the Constitution says that the Senate forfeits the right to advise and consent if it is in recess.  The Senate should not have been permitted to successfully deny that it was in recess by merely passing a bill declaring it was not in recess, while simultaneously making itself unavailable to advise, consent, or conduct business for over a month.

III.            Conclusion

            The U.S. Court of Appeals reached the correct result when they invalidated three (3) recess appointments of President Obama in Canning.  But in my view they went too far.  The court had no need to invoke the doctrine of originalism.  And it should not have ratified the patently false claim of the U.S. Senate that it was in session when in fact it had recessed.



[1] The majority notes that U.S. Const. art. I, § 5, cl. 4 provides, “Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days . . . .”.   I agree with the majority that since the Appointments Clause makes no mention of adjournment, this limitation on the right to adjourn is irrelevant to the issue before the court.


Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

Electronic Signatures

DIGITAL DOCUMENTS, DIGITAL SIGNATURES AND THEIR USE IN BUSINESS

WHAT WE CAN AND SHOULD DO TO TAKE ADVANTAGE OF THESE TOOLS

By Patrick H. Stiehm*

Seven years ago, I made a business presentation concerning the legal aspects of utilizing electronic documents and electronic signatures to create and document legally enforceable contracts. Although in a majority of jurisdictions the statutory predicates necessary to create and enforce such documents were in place at both the national level (See 15 USC Chapter 96 - Electronic Signature In Global and National Commerce Act), and at the state level, (See The Uniform Electronic Transactions Act, hich has been enacted in 47 States, the District of Columbia, Puerto Rico and the U.S. Virgin Islands), my audience displayed considerable skepticism.

Indeed, I felt like a lawyer in ancient times attempting to convince his Assyrian clients that contracts on clay tablets were as valid as those chiseled in stone. Or a little later, perhaps an Egyptian lawyer tried to convince clients that contracts on papyrus were as good as those on clay tablets. After that, I imagine a medieval lawyer tried to convince clients that paper contracts were just as enforceable as ones on animal hides.

Humans are reluctant to change from the tried and true for the purpose of adopting an innovative way of doing things. We don’t want to be taken out of our comfort zone. Our hesitancy is even greater where money, goods, services and the profits and success of our businesses are involved. Lawyers in their capacity as legal advisors to business are equally slow to adapt to changes. This can affect a businessperson’s attitude towards the new technology. In addition, despite the ready availability of statutory recourse to enforce electronic documents, it can be a chore convincing a court or other business entity to accept an electronic transaction. Sometimes, a court order may even be necessary to ratify conduct pursuant to an electronic agreement executed with electronic signatures.

Seven years ago, the prevalent attitude was that somehow electronic documents and electronic signatures were not as legally valuable as paper documents with wet (hand written) signatures. As the ads for Siemens claimed, “…That was then, this is now.” You would think that commerce would have developed by now a widespread acceptance of electronic documents and signatures.  Not quite, but we are advancing slowly in that direction.

We are making progress towards an era when all documents including contracts will primarily be electronic. Paperless offices and electronic record keeping is encouraged at multiple governmental levels and for a variety of reasons. (See Sparks, David, Paperless: A MacSparky Field Guide, Self Published 2012, and Walker, Richard Achieving the Paperless Office, Efficient Technology, Inc., 2009, which are just two examples of this encouragement.)

A concrete example of this evolution may be found in our federal court system. Federal courts have largely converted to electronic records. In fact, there are federal jurisdictions where you cannot file documents in hard copy without jumping through hoops designed to discourage the use of paper.

This is not just an American development; it is happening worldwide. A number of countries besides the United States encourage electronic records, including but not limited to: Canada (See the Uniform Law Conference of Canada’s adoption of the Uniform Electronic Commerce Act), the United Kingdom (Electronic Signature Act,) and Israel (Electronic Signature Act). The United Nations has joined in encouraging this development. [See the United Nations Commission on International Trade Law (UNCITRAL), which adopted the UNCITRAL Model Law on Electronic Commerce].  (To more fully appreciate the worldwide scope of developments, see Digital Signatures and Law, listing countries that have legislated regarding electronic signatures.)

When dealing with electronic documents and electronic signatures, business people always come back to the same basic question: “Is that legal?”

What they really mean is:

If the writing in question would be “legal” as a paper document with a “wet” signature, would the fact that it is an electronic document and is “signed” with an electronic signature be a defense to its enforcement?

Put more simply, if it’s good on paper with a wet signature, it is good as an electronic document with an electronic signature?

The answer is usually going to be “Yes!”

Yet many business people, lawyers and courts remain uncomfortable with electronic transactions. The best solution to this resistance, I believe, is for those of us who are more technologically oriented to utilize electronic documents routinely and as a matter of habit. Lawyers do this by encouraging their clients to use electronic documents and signatures in all appropriate transactions in which they are involved. Business people do this by developing the habit of using electronic documents and signatures unless there is a good reason not to. Frequently, it makes sense and expedites the transaction. If we persist even in matters where we may initially be the only ones, I submit that others will see the benefit, gain experience, and become comfortable with the process. This evolution towards greater acceptance deserves our full support.

*Patrick H. Stiehm is a member of the Virginia, Maryland and Minnesota state bars. He is in solo practice under the name Stiehm Law Office. His major areas of concentration are commercial finance, and representing the left-behind parent in international child kidnapping cases in both state and federal court in Virginia and throughout the United States.

The material contained in this blog post is opinion and is offered for informational purposes only. It is not a substitute for a private, independent consultation with an attorney. You are strongly advised to do your own due diligence when it comes to making decisions relating to the matters discussed. Those decisions should be made in conjunction with -- and after being fully informed by -- competent counsel of your choosing.

Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

            Neuhs is an unreported Virginia appellate opinion on the identification of separate and marital property in equitable distribution. 

            There is nothing particularly “new” about the outcome of this proceeding.  It may be interpreted as a warning to parties entering a marriage with substantial assets:  Either sign a pre-marital agreement or obtain legal advice about preventing assets from becoming marital property, if you hope to avoid the fate of the husband in this action.

            Husband’s[1] missteps may have deprived him of tens of thousands of dollars in assets that he might otherwise have been awarded: 

                        A.            Husband’s eight (8) pre-marital real properties were deemed transmuted into marital property as a result of (1) the trial judge crediting wife’s testimony that the real estate holding company (“DJN”) established for those properties post-marriage was intended to provide for their retirement, and discrediting husband’s testimony; (2) both parties dealing with DJN operations; (3) both having signature authority on DJN checks; and (4) both commingling DJN funds with their personal accounts. And,

                        B.            Husband lost his claim that the trial court forgot to account for wife’s marital waste totaling nearly $40,000.00 in airline tickets, unnecessary purchases and expenditures, and withdrawals from his separate business.  Husband lost that claim because he neglected to mention it in his written objection to the final decree.  This is a major cause for appeals being denied; if you do not provide the trial court a chance to fix their error, the higher court will not help you.

            Whenever the judge ruled on property, the judge was sustained.  This applies the basic principle that factual determinations (assessments of credibility) are up to the trial court and will not be reviewed on appeal unless there is no evidence to support them. 

            On some matters, however, the judge failed to classify, value and appropriate assets even though the litigants introduced evidence about them at trial.  The judge lost no money as a result of failing to identify and distribute all  the property.  He simply received a directive to supplement his ruling.  The parties, on the other hand, must each pay their attorney fees and costs for the appeal.



[1]  Both parties were married three times before.  Wife married husband 48 hours after dissolution of his third marriage, and ended this (fourth) marriage by proving adultery.


Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

Attorney IT Outside the United States

TELECOMMUTING FROM EUROPE

(AND OTHER PLACES OUTSIDE THE UNITED STATES)

By Patrick H. Stiehm[1], © 2012, EZ Justice, P.L.C.

          I have had the wonderful experience of an extended period of travel in Europe and to a lesser extent the Middle East and North Africa, for over a year. During that time I had to maintain my law practice in the United States. The host of this blog invited me to do a guest column relating my experience. I hope those who read this article find it helpful and informative.

EQUIPMENT

          When traveling outside the United States and continuing to offer legal services, you need to stay connected. The first order of business is bringing proper equipment. Three critical items of hardware are a laptop and tablet computer, and a smart phone. This should not come as a surprise. The choice of an Apple or PC platform and the brand of the latter are a matter of personal preference. Each of the devices will need Wi-Fi connectivity, and each will offer you redundancy in the event of loss, breakdown, or constraints imposed by a particular location.

CONNECTIVITY

          With your laptop, tablet and cell phone, you can communicate via e-mail or voice. Email is so ubiquitous that for purpose of this article no more need be said.

          Voice connectivity, on the other hand, requires special consideration. Using a U.S. cell phone carrier’s international roaming plan is still very expensive. We have all heard stories of cell phone bills of several thousand dollars after a week or two in Europe. These charges usually cannot be invoiced back to a client as an out of pocket expense if foreign travel was your choice and not theirs.

          Well in advance of international travel, I switched my primary phone service to Skype, a Voice Over Internet Protocol (VOIP) service that is free of charge among its users. I selected Skype because one of law practice areas of concentration is representing the left-behind parent in international child kidnapping cases. Often in these situations, the abandoned parent is economically disadvantaged and unable afford traditional international calling rates. But they have Internet access.

          I purchased a “Skype Outphone number in my local area code along with voice mail. By the time I began to travel, I had significant experience with receiving incoming calls to my business phone on all three of my portable devices

          I have additional VOIP applications on my smart phone. Vonage handles calls to and from the United StatesLine2 permits calls and texting to both the United States and Canada. Finally for some international calling other than the United States and Canada, I use Viber, a VOIP service that – like Skype -- is free among users. Free calling and texting is a great convenience.

          These Internet voice and text solutions are far less expensive than international roaming or country-specific SIM cards. The last thing you want to worry about when communicating with a client from abroad is the cost of the call.

          You may need to access files on your computer in the States while you are overseas. I frequently need to access material on my office computer, located in Northern Virginia. I use GoToMyPC and LogMeIn. You only need one. A resident program on the office (“host”) computer permits me to access its hard drive over the Internet from my laptop, my cell phone, my tablet or from a computer in an Internet cafe, with the use of a password.[2]

INTERNET ACCESS

          A consistent problem overseas is the quality of Internet access. The quality ranges from adequate to sketchy, with none as satisfactory as my home or office connection in the United States. Perceived slowness may be caused by the Wi-Fi service in a hotel or apartment building, or the local Internet itself. Often with Wi-Fi issues, you increase transmission speed by moving closer to the router. Sometimes you need a cyber café. A more satisfactory solution is a Wi-Fi signal- booster, enhancer or extender. Prices on Google range from $15 to $80.

BACKING UP TO THE CLOUD

          Much has been written recently recommending that law firms use cloud back up to protect electronic files. Cloud backup is storage rental on someone else’s server.[3]          
          I use Carbonite for my office computer. Carbonite installs software that runs on the computer being backed up. Typically it will back up once a day, automatically, and usually at night. It harvests, compresses, encrypts, and transfers the contents of your hard drive to remote servers of the service provider. These servers are generally scattered geographically to provide redundancy. I have a similar service for my laptop containing files I am working on day-to-day.
          Accessing files via these storage services is often faster and easier than connecting to my office computer or laptop when I need a file on my cell phone or tablet. After Sandy visited the East Coast, my office computer was down for a day and a half and Carbonite proved to be a lifesaver.
          A related service is Dropbox. It is particularly useful in moving files from one device to another.[4]

CONCLUSION

          That is how I am telecommuting while on extended travel in Europe. I am sure that there are other ways of doing what I did. I hope that your comments will add to the experience so that we may all benefit. If anyone would like to write me directly, please feel free to do so. My email address is: Stiehm.law@juno.com.
          Happy travels and happy telecommuting!



[1]             Patrick H. Stiehm is a member of the Maryland, Minnesota and Virginia state bars. Although he successfully utilized the software mentioned in this article, it is not necessarily the best on the market. Moreover, your experience may vary according to your Internet connection speed, hardware platform, country-specific restrictions and other factors.

[2]             Electronic transmission of privileged information may breach client confidence unless the data is encrypted and the client consents in writing. Encryption software and the ethics rules and opinions of the American Bar Association and state bars are beyond the scope of this article.

[3]             Cloud data storage also raises major ethical concerns that cannot be addressed here. Issues include what happens if encryption is compromised, the company folds, or the data is lost. Attorneys should review their state bar ethics guidelines and disciplinary rules before electronically transmitting privileged information or storing it with third parties.

[4]             Obviously, Dropbox has the same ethical issues already mentioned. If you utilize it, we recommend two-step verification such as Time-Based One-Time Protocol (“TOTP”). Companies offering this without charge include Google Authenticator (Apple, Android), Duo Mobile (Apple) and HDE OTP Generator (Apple).


Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

More from the Virginia Court of Appeals

            I am reviewing four unpublished Virginia Court of Appeals opinions decided on November 20, 2012.

            Woodell v. Lagerquist reversed a finding that a father was a “non-parent”, and restored his parental rights.

            Here is what happened:  Both parents signed an acknowledgement of paternity under oath and in full compliance with VA Code § 20-49.1.  Their joint statement of facts on appeal denied fraud, duress or material mistake of fact associated with the acknowledgement – the only grounds for attacking the document.  Thus, the acknowledgement was irrevocable and immutable; and as binding and conclusive as a judgment.

            For some reason, the trial judge found that § 20-49.1 conflicted with § 20-49.10 which involves genetic testing.  In a veiled rebuke clearly directed at the judge, the Court of Appeals recited the “plain language” of the Code and then laid out the “rather unusual facts”.  The appellate court ruled that the Code provisions are not contradictory, the trial judge himself said the case was not about paternity, and the judge had not appointed the guardian ad litem who would have been required had the blood test statute been properly invoked. 

            The most unusual aspect of this decision is how dramatically the trial court misinterpreted the law.


            Burns v. Burns recounts a familiar pattern of court proceedings followed by a consent order modifying custody and visitation, with nothing said about child support. 

            Later, when the support payor wants to modify support the question is whether the required material change dates from the consent order or from some earlier order or agreement. 

            Here, the pleadings and consent order did not mention support directly.  A paragraph under the custody heading repeats the property settlement terms regarding private school tuition, bus, books and fees; applying them unchanged to a particular year; and then states that other provisions of the agreement and final decree remain in effect except as modified.  The order does not use the word “reaffirm” or the word “support” anywhere.

            The Court of Appeals looks outside the four corners of the consent order in reaching its conclusion that the parties did not modify support.  The pleadings are silent on the subject.  The consent order was not accompanied by VA Code § 20-60.3 language or a support worksheet, as would have been required with a support order.  Thus, the conclusion is that the trial court erred in limiting the change-of-circumstances time frame to events after the consent order.  The trial court should have allowed reference to events back to the date of the final decree.  The case is reversed and remanded.           

            I thought the appellate court’s attention to the language of the agreement, the pleadings, the consent order and the missing statutory invocations and worksheet was meticulous and well handled.   This decision is a useful example of how cases are decided.  It is also a reminder of how important it is to be careful what you ask for.  Since technically the private school tuition is part of child support, and the tuition was specifically discussed in the consent order (even though not modified), this ruling is a much closer call than Woodell.


            David v. David examines the evidence necessary to convert assets and debt from separate to marital at equitable distribution (ED).  This is a tough subject even for seasoned attorneys, and in this case each side scored a partial victory.  Husband got to keep as separate property the appreciation on his separate brokerage account, while wife succeeded in getting the balances on credit cards for her separate business declared to be marital debt.

            The Court of Appeals examined the trial transcript and sifted the evidence. Wife could not show husband exerted any “significant” personal effort beyond the selection of some stocks that increased in value (while others declined in value) during the marriage.  Further, wife failed to directly connect his personal effort with any substantial appreciation or specific portion of the appreciation.  She did not meet her burden of proof under Code § 20-107.3(A).  Consequently, the $300,000+ of gains during the marriage stayed in husband’s pocket.  The trial judge got this part of the ED trial wrong.

            The wife did better with her credit card debt on the cards in her name that were nominally for her separate business. She got that debt labeled marital based on four categories of evidence at trial:  (1) She paid household bills. (2) Husband confirmed it. (3) She introduced bank statements showing the expenses, including securing purchase of a Navigator with one of the cards.  And (4), income of the separate business supported the family. The trial judge got this part of his opinion right.

        
   

            Vannatta v. Vannatta is a spousal support appeal in which both parties lose for failing to read their appellate record more carefully before appealing.             

These litigants might have saved some money by taking the following considerations into account: 

            A.             Read the property settlement agreement and court orders carefully, word for word.  If you are analyzing an agreement or a consent order, those are contracts.  They are subject to rules of contract interpretation.  Apply the rules. 

            B.            It is exceedingly difficult to win an appeal based on an alleged error in applying VA Code § 20-107.1(E).  That is the list of factors to be weighed in determining spousal support.  If your trial judge says she considered all the factors, then that is all she is required to say. No particular weight is required for any factor.

            C.            Even if the order being appealed talks about some improper piece of evidence, you will not win your appeal unless it is absolutely clear that your trial judge relied upon it, and it is substantial enough to affect the outcome. Ambiguity is insufficient ground for reversal.  The trial court is presumed correct.

            D.            A reservation is not a right.  If your agreement reserves you a right to petition for and receive spousal support based on a list of future contingencies like death or remarriage, don’t complain to the Court of Appeals that you were only awarded support for a finite term of years.  The phrase “petition and receive” does not mean the same thing as “receive”.  In a contract, every word is presumed to have meaning and is to be interpreted in harmony with every other word to the extent possible.  If your contractual right to support comes with a prerequisite; you must comply with the prerequisite.  Here, that means you must petition for support.  A judge did not re-write your contract by ending your support on a date certain. 

Olivier Denier Long is licensed in Maryland, Virginia and Washington, DC. This site does not provide legal advice. Case results depend upon a variety of factors unique to each case, and the outcome in one proceeding does not guarantee or predict a similar result in the future.

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