Memphis Injury Lawyer Blog

Those of us who take divorce cases have argued for years over the issue of dividing 401K accounts that have increased in value due to the passage of time. Or, for that matter, that have lost value due to market conditions. The first part of this quagmire was recently set to rest by the Tennessee Supreme Court in Snodgrass vs. Snodgrass. The Court said:

In a divorce proceeding the trial court awarded the parties the premarital balances in their respective 401(k) accounts as each party’s separate property. Recognizing the existence of prior, inconsistent analyses by different panels of the Courts of Appeals with respect to whether 401(k) accounts are “retirement or other fringe benefit rights relating to employment” as defined by statute, the Tennessee Supreme Court held that:
(1) any balances that exist in the parties 401(k) accounts as of the date of the marriage remains the parties’ separate property,
(2) the entire net amount by which the parties 401(k) balance increased during the term of the marriage is marital property, and
(3) it is not necessary to consider the parties’ contributions to the increases in the value of the 401(k) plans during the marriage. Snodgrass vs. Snodgrass, (Tenn. Oct. 9, 2009).

While this may seem almost too loaded with common sense to be true, it has laid to rest an important issue during many trials. In my experience the issue sharpens into the "tangible and intangible" contributions of the respective spouses to the appreciation of the 401k asset. For example, if the Husband was a bank president and the Wife was a home maker, the arguments abound that he did all of the work, earned all of the money and that the value increases over time did not result from any action (such as hosting dinners for clients) by the Wife. On the other hand, Wife argues that the added values result from her services as a home maker and wife which allowed the Husband to earn a large income and that but for those services, the Husband would have been unable to earn as much money as he did.

Justice Cornelia Clark wrote in Snodgrass [T]hat net gains from any source
accruing in such accounts during a marriage are all marital property within the meaning of the second clause of section 36-4-121(b)(1)(B)" without resort to the issue of the parties contribution. A sound and good decision in my book. Had the Court ruled otherwise then there would continue to be interminable wrangling over this issue when the reality is that the law says that marital property is that property which is acquired during the marriage unless acquired by some source that clearly is separate, i.e. a gift, a bequest from a will, etc.

Bravo to the Supreme Court.

I have been mediating and litigating Tennessee and Memphis divorce cases for over 30 years. One lesson learned has repeated itself to me over that entire period of time. In a nasty, brutal divorce or child custody case, the only winner is the lawyer. mediation has come to be required in Tennessee within 120 days of the filing of divorce cases. However, this rule is often overlooked or ignored by clients and their counsel. Even when mediation is pursued there is one ingredient that no Court can order: cooperative interest based negotiations. In other words, resolving disputes without blame placing or making decisions based upon anger or hatred. Some Judges will not order mediation unless both parties agree to try and negotiate in good faith.

Last year over 30,000 divorce cases were filed in Tennessee. If you look backward in time, the statistics show that this number is consistent with the trend that began several years ago. Perhaps, given the fact that divorce has become more instead of less expensive, a legislative approach may be required. According to Tennessee law, the court has the authority to award a party all or part of his or her divorce attorney's fees and costs of litigation. However, the modern trend, it seems, is to award these expenses in limited circumstances. One can only wonder as to the impact of a change in the law requiring a Court to award a party all of their attorney's fees after the date of a mediation if the other party could be found to have not negotiated in good faith.However, one of the hallmarks of mediation is that the process is confidential such that the positions of either party are not to be disclosed to the Court if the mediation fails and the case proceeds to trial. That's the rub.

Since over 50% of marriages fail in the United States, new methods for ending this emotional and financial arrangement are coming to into vogue. Collaborative divorce is the newest method of alternative dispute resolution in family law. It can best be described as a method of practicing law in which the lawyers for both sides (parties) agree to assist the clients to resolve conflicts by employing cooperative techniques rather than adversarial strategies and litigation. All of the people involved commit themselves to achieving a negotiated outcome. It is agreed that no litigation will be commenced during the negotiations. www.collaborativedivorce.net

In reality this is nothing new. Most family lawyers would rather negotiate than litigate. It was standard practice for many years for both lawyers to meet to try to identify the issues in dispute, if nothing else. Then we entered the "My lawyer can beat up your lawyer" era. Now it seems that civility and common sense have become so wounded that neither ideal can survive a divorce where there is much at stake. The only way to change this is one lawyer at a time; one case at a time; and most importantly- one client at a time.

Emotions run so high in disputes over child visitation that violence can erupt during these confrontations. In Tennessee, the time that both the custodial and non-custodial parents are allocated with a child is now referred to as "parenting time". In fact, in Tennessee and Memphis family law matters, the term custody has been replaced by designating one parent as the "primary residential parent". Sadly, as one of our retired and now deceased judges, Hon. Wyeth Chandler, used to comment: " It's often like two dogs fighting over one bone."

There is much that can be done outside of the courtroom to resolve these thorny issues. First and foremost, the parties should try their best to sit down and put their own personal issues aside while concentrating on what is in the child's best interests. If parents were not divorcing and still lived together in one home, hopefully that is what they would do in the first place. Memphis family and divorce lawyers often will sit down with their client's in an attempt to do just this before going to war when a truce would better serve their clients needs. Additionally, mediation has become a cost efficient method to bring the parties together on parenting issues. I have acted as mediator for many years in a number of these disputes. Having the perspective of both a divorce lawyer and a mediator has allowed me to come to a conclusion.

Absent child or sexual abuse, most of these battles are less about the welfare of the kids and more about the parents' competing needs. Secondarily, the only one who wins in these battles is the lawyer. In an attempt to throw water on visitation related fires, the courts now require mediation within 120 days after a case is filed. Also, the parties must either agree on a Permanent Parenting Plan or submit to the Judge, for his or her approval, their own versions of a Plan. While the completion of this long and involved document hs increased the cost of divorce cases, it is intended to forestall future problems by providing for all of the expected future needs of the children.

A part of the Plan is a provision to select a method of dispute resolution respecting the children or other issues. Court is always there and , in my opinion, should be considered as the last option. Ask you lawyer, counselor or minister for a recommendation as to who could best mediate your divorce or visitation case. It may be an answer that will save you and your children from needless strife. It can also save you a fortune in attorney's fees.

Each year the courts in Memphis and all of Tennessee are jammed with persons who seek the advice and aid of trial lawyers. Whether the case goes to trial or not does not lessen the importance of following orders of the Court. While being jailed for contempt of court is not commonplace, it does occur with regularity. For example, a Knoxville woman was recently jailed for her refusal to abide by a Court Order involving parenting time.

As a trial lawyer, it is my ethical duty to always counsel my clients to obey the orders of the Court. Disobedience of these orders is not the way to challenge a ruling that one may find to be improper. From almost any decision, a person can appeal to the next higher court. Many times I have heard judges say that they have made the best decision that they can and that if either party is unhappy, then the displeased person can seek an appeal to the next higher court. However, the story of the woman in Knoxville caused me to consider whether or not Tennesseans really understood all of the consequences of willfully refusing to abide by a judge's decision.

In Tennessee, there are generally two kinds of contempt of court, civil contempt and criminal contempt. The difference between the two can turn on where and how the offensive conduct happened and the type of consequences that are available for the Judge to use. Tennessee Code Annotated, section 29-9-102 defines the breadth of behavior that may be the subject of a perrson being held in contempt:

The power of the several courts to issue attachments, and inflict punishments for
contempts of court, shall not be construed to extend to any except the following cases:

(1) The willful misbehavior of any person in the presence of the court, or so near
thereto as to obstruct the administration of justice.
(2) The willful misbehavior of any of the officers of such courts, in their official transactions.
(3) The willful disobedience or resistance of any officer of the such courts, party,
juror, witness, or any other person, to any lawful writ, process, order, rule, decree,
or command of such courts.
(4) Abuse of, or unlawful interference with, the process or proceedings of the court.
(5) Willfully conversing with jurors in relation to the merits of the cause in the
trial of which they are engaged, or otherwise tampering with them.
(6) Any other act or omission declared a contempt by law.

I think that it fair to say that no one should spit into the wind, or tug on Superman's cape, nor commit any of the above acts. Fortunately, most Judge's in my experience do not want to exercise these powers if they can avoid it. However, it can and does happen. Make sure that it doesn't happen to you, but if this fate should befall you, seek out an attorney who is very familiar with this area of the law as well as the jurisdiction in which the contempt has occurred.

Cluck Kent was a mild mannered reporter for a great Memphis metropolitan newspaper. His former fiancé, Lipsy Lane, was interested in serving him with papers to establish Tennessee child support for their bouncing baby boy, Kal-el. After months of trying to serve the “Man of Steel”, Lane saw her golden opportunity to have the Shelby County lawsuit handed to her former lover. Lane discovered that her “Man” had been called for jury duty in Memphis and Lipsy intended to get her “Man”. The very next day, while Cluck was sitting in the jury box in Shelby County Circuit Court, the dreaded process server put the papers into Cluck’s hands. He was just summoned to a paternity hearing in Shelby County Juvenile Court the very next week.

As an observer of the human condition and a trial lawyer who handles these kinds of cases, I wonder: Is it fair for the “Man of Steel” to be served papers while discharging his public duty of jury service? Suppose he had been served while leaving the parking lot to enter the Shelby County Courthouse?

Effective January 1, 2009, some rather sweeping changes to the selection and exemption of prospective jurors from jury service shall go into effect. In our example above, Kent would have legal grounds to challenge the service of process under Tennessee code Annotated 22-1-106:

Service of process on any juror while that juror is attending or traveling to or from the court to which the juror is summoned is voidable and subject to challenge.

But this is not the only change. Formerly, a citizen could try and
avoid jury service due to his or her age, job (doctor, lawyer, etc.), and several other factors. As of January 1, however, the Court overseeing the selection and empaneling juries shall only excuse a person if:

The prospective juror has a mental or physical condition that causes that person to be incapable of performing jury service.

The person's service will constitute an undue or extreme physical or financial hardship to the prospective juror or a person under the prospective juror's care or supervision.

The legislature defined undue hardship as any of the following:

The prospective juror would be required to abandon a person under the juror's personal care or supervision due to the impossibility of obtaining an appropriate substitute caregiver during the period of participation in the jury pool or on the jury;

The prospective juror would incur costs that would have a substantial adverse impact on the payment of the juror's necessary daily living expenses or on those for whom the juror provides the principle means of support;

The prospective juror would suffer physical hardship that would result in illness or disease; or

The prospective juror would be deprived of compensation due to the fact that the prospective juror works out-of-state and the out-of-state employer is unwilling to compensate the juror or that the prospective juror is employed by an employer who is not required to compensate jurors and declines to do so voluntarily.

I have argued many cases to both civil and criminal juries. In my opinion, the willingness to serve on such a jury is the foundation of our justice system. I fully understand the inconvenience and financial impact of performing this duty. However, with the possible exception of voting, there is no duty more important than being the sole judge of the facts in a case. That is correct. In either kind of trial only the jury can decide the truth of what happened. This function is far too important to measure in words or dollars. By serving as a juror, one can affect not only the system but the lives of the parties to the case, as well. Stand and Be Counted.

The Uniformed Services Former Spouse Protection Act governs the division of military pensions. USFSPA is designed to give a division guideline to Memphis and Tennessee Divorce Courts for these pensions in the event of the dissolution of a marriage. The USFSPA does not automatically divide a former spouse's retired pay. Rather, the law permits a state to treat military disposable retired pay as marital property. Tennessee law defines marital property as:

“Marital property” means all real and personal property, both tangible and intangible, acquired by either or both spouses during the course of the marriage up to the date of the final divorce hearing and owned by either or both spouses as of the date of filing of a complaint for divorce, except in the case of fraudulent conveyance in anticipation of filing, and including any property to which a right was acquired up to the date of the final divorce hearing, and valued as of a date as near as reasonably possible to the final divorce hearing date. In the case of a complaint for legal separation, the court may make a final disposition of the marital property either at the time of entering an order of legal separation or at the time of entering a final divorce decree, if any. If the marital property is divided as part of the order of legal separation, any property acquired by a spouse thereafter is deemed separate property of that spouse. All marital property shall be valued as of a date as near as possible to the date of entry of the order finally dividing the marital property. “Marital property” includes income from, and any increase in value during the marriage of, property determined to be separate property in accordance with subdivision (b)(2) if each party substantially contributed to its preservation and appreciation, and the value of vested and unvested pension, vested and unvested stock option rights, retirement or other fringe benefit rights relating to employment that accrued during the period of the marriage. “Marital property” includes recovery in personal injury, workers' compensation, social security disability actions, and other similar actions for the following: wages lost during the marriage, reimbursement for medical bills incurred and paid with marital property, and property damage to marital property. This property can then be divided in a divorce action. Disposable military retired pay is a service member’s monthly retired pay minus qualified deductions. USFSPA allows the Divorce Court to treat military retired pay just as it would treat a civilian pension plan.

Retired pay may be divided for marital dissolution purposes. Retired pay may also be garnished to satisfy child support and alimony obligations. Whether military retired pay will be treated as marital property and how the service member's military retired pay will be divided between the two parties upon divorce is decided according to Tennessee state law. Tennessee courts have treated a service member's military retired pay as a marital asset which can be divided in a divorce action.

The issue of military retirement and a post-divorce change of benefits was recently dealt with by our Supreme Court. Justice Janice Holder writing for the Court, offered the opinion, in Johnson v. Johnson, that any attempt to reduce or modify military retirement benefits after the Marital Dissolution Agreement is ineffective. In this case the parties’ Marital Dissolution Agreement divided Mr. Johnson’s military retirement benefits to provide one-half of those benefits to Mrs. Johnson. After the Final Decree was entered, Mr. Johnson unilaterally waived a portion of his benefits.

The Court held that when a Marital Dissolution Agreement divides military retirement benefits, the non-military spouse obtains a vested interest in his or her portion of those benefits, as of the date of Court’s decree. Any act of the military spouse that unilaterally decreases the non-military spouse’s vested interest is an impermissible modification of a division of marital property and a violation of the Final Decree of Divorce incorporating the Marital Dissolution Agreement.To see the full opinion: Johnson vs. Johnson

This is a fair result. Had the Court ruled otherwise, one party could destroy the "equitable" nature of a mutually agreed upon settlement of their case. This would be like going back after the conclusion of a baseball game and changing the rules so that the result is the opposite of what really happened. Not only would such a thing be unfair, but it would make it impossible to protect that which you value the most: your future.

It was difficult for the Tennessee family law courts to equitably divide unvested retirement benefits. An unvested retirement benefit is a retirement asset that has been partially or completely earned but that is not yet able to be distributed due to the terms of the retirement plan document itself. In Cohen vs. Cohen the Supreme Court of Tennessee determined that an unvested retirement plan should be classified as marital property which is therefore subject to division by the Court.

The Court noted the highly inclusive nature of the language defining marital property in Tennessee law: i.e. Marital property means all real and personal property, both tangible and intangible acquired by either or both spouses during the course of the marriage up to the date of the final divorce hearing. It was decided that the legislature intended that homemakers undergoing divorce should not be deprived of the opportunity to share in property that, although not fully vested, is in many cases the most valuable asset accumulated during the course of the marriage.

Neither spouse is necessarily entitled to a share of each item of marital property. Rather the law requires only that the overall division of all marital property be equitable to both parties. Furthermore, the goal is an equitable division, not necessarily an equal one.

In order to secure your future and the security of your elder years, it is critical to engage the services of a skillful and experienced family lawyer. The division of retirement benefits is not a solitary function. Decisions concerning these financial resources must be considered together with one's financial goals and assets as a consolidated plan. So, it is vital that when involved in a divorce, one must protect that which matters most: your future peace of mind.

Trial lawyers joke that a person who represents herself or himself have a fool for a client. Still, this system of justice is fraught with danger and complexities. Terms such as marital fraction; separate property or negative marital estate have meanings that are not readily apparent to the lay person. Property Division Law.
In addition to these issues, clients are justifiably wary of being pinned down to admissions on these subjects because they do not have a well informed appreciation concerning the impact of these decisions. Often, even after multiple explanations of the applicable law from an experienced family lawyer, the average client knows less about the subject matter than before the explanation began.

I have had the experience of actually giving a well educated, business savvy client the printed law to read and afterwards still being met with a blank stare. this is not surprising. Volumes have been written about communication between lawyer and client.Suffice it to say that no matter the efforts of a caring lawyer, things are usually still somewhat cloudy to the non-lawyer.

These problems are compounded still further when one party is, by choice or chance, not represented by counsel. This is perfectly illustrated by the recent case of Caldwell vs. Caldwell. The parties were married for twenty four years before the decision was handed down in their case. While their assets were not extensive, they did have 117 acres of land and some other assets. Prior to the trial Ms. Caldwell through her attorney filed with the Court a listing of the parties assets setting forth her opinion of the values. Mr. Caldwell never made such a filing nor did he inform either the trial Court nor the appellate Court as to his opinions of valuation nor where his wife erred in her opinions.

The result was both predictable and unfortunate. Mr.Caldwell was unsuccessful in his attempt to get a more equitable division. The Court said that it is the duty of a party to file the proper papers with the Court and similarly for a party to follow the Tennessee Rules of Civil Procedure and the Local Rules of Court. Also, the Court stated that Mr.Caldwell failed in his duty to tell the trial Court what he thought the proper values were or to object to his wife's valuation. In the absence of such an objection in the trial Court, the issue is waived and may not be first asserted on appeal.

The moral of this story is that in order to protect that which you value the most, a litigant must do what the Rules require to protect his own future.