Attorneys Fees in Family Law

In a divorce or family law matter it is important to factor in the cost of attorney fees and Court costs in an action when deciding how you wish to proceed. It is foolhardy to not seek legal advice in divorce or family law matters. It is wise to understand it often may be difficult and expensive to obtain a Court order directing your spouse to pay your attorneys fees in the matter.

Under the law a Court can award fees to enable a party to carry on or contest the proceedings, provided it finds:

(1) that the fees are necessary for the good faith assertion of the party’s rights in the action and will not contribute unnecessarily to the length or and expense of the proceedings;

(2) that the party from whom fees, costs, and disbursements are sought has the means to pay them; and

(3) that the party to whom fees, costs, and disbursements are awarded does not have the means to pay them. Minn. Stat.518.14.

A Court can also award fees against a party who unreasonably contributes to the length or expense of the action, or if a party commits fraud, or takes what a Court determines are bad faith actions in a case. Fees and costs can be awarded at any point in the proceeding.

Attorney fees can be obtained when there is a gross disparity in incomes or financial situations in a case, but it often can be expensive and a lengthy process to obtain an award of fees. Sometimes Courts wait until trial after they hear and consider all evidence before deciding an issue involving fees, or make a small temporary award to allow a party to contest the case, but the award often falls far short of the attorney fees required to take the matter through a time-consuming litigation process or trial. It is folly to assume you are going to be awarded every dollar of fees you are incurring, even if there is a disparity in incomes because, in general, Courts are conservative in awarding fees and do not wish to risk encouraging potentially unnecessary litigation. By granting a large temporary award of fees Courts realize this may lead to more litigation rather than a settlement. Generally Courts want matters to settle and not be litigated.  They have very busy Court calendars already and often times ugly divorce litigation is not their favorite way to spend their time.

Instead of counting on or assuming you will be awarded attorney fees the best strategy is to attempt to minimize your own fees because 90% of cases settle short of a trial and it is never easy to negotiate or convince your spouse to voluntarily pay both sides attorney fees.

First carefully review and read your Retainer Agreement with your attorney to understand how you will be billed. Generally numerous phone calls or e-mails to your attorney will lead to a large attorney fee bill quickly. Do not use your attorney as a therapist or as a way to soothe your hurt feelings as it can be very expensive. Find a good friend, or family member, or therapist to talk about your emotional feelings and disappointment. Try to streamline communications to address multiple issues in a single call or e-mail and try not to constantly barrage your attorney with piecemeal information. If possible try to amicably resolve personal property disputes with your spouse without involving your attorney as fees can escalate fast over battles about old TVs or computers or used furniture that have small real current market value.

As hurt as you may be, try to be civil and respectful to your spouse. Personal or verbal attacks may give you temporary satisfaction, but may lead to a barrage of payback attempts to get even or other strategies to punish you in a revengeful manner that will lead to much larger attorney fees for both sides. It can also lead to expensive collateral actions such as Orders for Protection, or Harassment actions, which lead to more fees.  Do not let your emotions drive your actions. Treat your divorce as a business transaction and negotiations, as hard and as cold as that sounds.

Be honest with your attorney and do not hide information or assets. The more your attorney knows the better they can quickly plan how to settle your case. Trying to hide information or assets is unwise and can be deemed fraudulent and that can lead to an attorney fee award and also discredits your credibility with the Court. This can lead to very bad results no matter how good your attorney may be. It can also lead to length discovery requests, or information requests, from your spouse’s attorney, or depositions that lead to much higher attorney fees.

When your attorney requests information or documents, timely get the documents and provide them in an organized fashion. Do not procrastinate in getting information or documents as this leads to follow-up e-mails, letters, or phone calls and more fees and expense. You can save a great deal of expense by carefully organizing the statements, by file folder or clips in order. There are far too many cases where clients bring in a grocery bag of documents accumulated over years that are a mess and take hours to organize and often are incomplete, which again leads to higher fees for a paralegal or staff to try to organize and additional frustration for you.

Keep your children out of the middle of your divorce. Do not attempt to alienate your children against the other parent. If a party feels a parent is undermining a relationship with their children this will lead to anger and hard feelings and more litigation or efforts to get even. It also will cause great emotional harm to your children.

Lastly follow your attorney’s advice. Do not believe you know better or assume you can take shortcuts without seeking the attorney’s input, in particular in negotiating important settlement details, because there may be legal reasons for negotiating a certain way. When in doubt, talk to your attorney, and always before you commit orally, or in writing to any settlement seek your attorney’s input. After you verbally agree to a settlement with your spouse it often can be very difficult to backtrack and negotiate important other matters that may have been forgotten or neglected and this leads to litigation as people get entrenched in verbal promises made along the way.

I know everyone tries to keep their costs down in a Family Law matter, but usually it is more cost effective to discuss your case and the actions that you are considering before you take action, rather than trying to undo it after the fact. It should always be the attorney’s goal to settle your case short of going to trial, which will minimize your own attorney fees because it can be very difficult, time-consuming and cost prohibitive to go through a trial and to attempt to make your spouse pay your attorney fees. Even if the Court does decide to award you attorney fees the Court may only award a small portion of the fees you incurred.

Court Reverses Trial Court Permanent Spousal Maintenance Award And Directs Rehabilitative Maintenance and Also Directs Smaller Monthly Sum

In Spolum v. D’Amato, A14-1335, A14-1720 (Minn. App. August 17, 2015)  the Court of Appeals reversed a Ramsey County  trial court decision awarding Permanent Spousal Maintenance and remanded to the trial court to recalculate Spolum’s  monthly expenses, D’Amato’s income, and to reduce the monthly maintenance award of $14,072 and further held only Rehabilitative Spousal Maintenance was appropriate.

D’Amato, an orthopedic surgeon, and Spolum, a flight attendant, were married in 2001 and had one son, born in 2003. The parties separated in July 2010.  A legal separation action was started and then the parties attempted reconciliation but continued to live separately. A divorce trial began in August 2013. At that time, Spolum was age 49 and D’Amato was age 45.

To plan for the wedding, Spolum took a leave of absence as a flight attendant and extended it after the 911 attack and returned to work 5 years later. She quit in 2006 because her commute was stressful. She is high school educated with some college and art school classes.

Spolum worked at a clothing boutique and as a yoga instructor. When the parties reconciled she opened a chocolate shop, but the business failed. Trial evidence reflected she was “brilliant and creative”.  She was interested in animal-welfare and was on the board of directors for an animal-welfare organization. Spolum desired to establish a career as an animal welfare advocate. A vocational rehabilitation evaluation was completed concluding without additional training she could work in a position earning between $10-$12 an hour, but could attend a two year vocational program.

During the marriage D’Amato was let go in a physician practice. He applied to Health Partners. He was initially rejected, but Spolum testified she invited the head of HealthPartners to their home to advocate for reconsideration and D’Amato was then hired.  D’Amato also began a second job as an independent medical-legal consultant, working approximately 20 hours a week. Near the end of 2011 D’Amato quit the second job as it was time-consuming and stressful causing him anxiety and to be unhealthy. He testified he was already working 50 hours a week at HealthPartners.

D’Amato testified his earning in 2013 would be $800,000 and that he was seeing fewer patients as they were being diverted to other doctors. The Director of HealthPartners testified there has been a decrease in patient volume and surgeries. D’Amato’s income has been decreasing since 2011 and he predicted this trend would continue. He could earn additional income based on his production, but patients were decreasing. D’Amato testified he projected his salary in 2014 to be $750,000. D’Amato proposed the court use his 2013 income of $800,000 and that he pay spousal maintenance for 4 years to allow Spolum to acquire employment and training.

In the Judgment the trial court set D’Amato’s income at $950,538 using a 3 year average and despite finding he had quit his second job to create a more balanced life. The  judge stated that in the event the court overestimated his income D’Amato was in a better position to correct the error by pursuing additional options.

The trial court found Spolum’s discretionary spending at $9,943 per month and then modified that to $8,383 based on D’Amato’s claim this was even higher than she requested. In the original decision the court ordered $18,225 per month in spousal maintenance which was subsequently amended to $14,072 after post-trial motions. Apparently the trial court made findings concerning Spolum’s earning capacity and ability to re-enter the job market, but ignored those facts in making it a permanent maintenance award. The court found she was in good physical and emotional health and found no reason why she could not pursue a successful career because she was healthy, intelligent, articulate, creative, and capable.

The court found permanent spousal maintenance was appropriate based on: (1) the high marital standard of living, (2) the length of the marriage, (3) Spolum will never be able to support herself in the manner close to the marital standard of living, and (4) the fact D’Amato’s income would not decrease. Spolum was awarded $1.2 million dollars in assets, including the Caribbean home “Seacliff” which D’Amato requested be sold and artwork of $110,000, but found the assets were not available until retirement.

The court of appeals reversed the amount and duration of the award and stated Permanent Spousal Maintenance was not warranted and that the award should be Rehabilitative. The court explained a court may award spousal maintenance (1) if a spouse lacks sufficient property, including allocated property to provide for reasonable needs considering the standard of living, or (2) is unable to provide self-support through appropriate employment, in light of the standard of living. Minn Stat. 518.552, subd.1.  In determining an award the court should evaluate (1) the financial resources of the requesting party, including marital property awarded to the party, and the party’s ability to meet needs independently, (2) time necessary to become self-supporting, (3) marital standard of living, (4) duration of marriage, (5) loss of employment benefits and opportunities foregone by requesting party, (6) age, physical condition, and emotional condition of the requesting party, (7) ability of the obligor to meet the needs of both parties, and (8) contribution of each party in the acquisition, preservation, and depreciation of marital property. Minn. Stat. 518.552, subd. 2.

The court stated the trial court put an overriding emphasis on the standard of living, which was merely one factor to be considered. The court did not agree the assets awarded to Spolum were not available until retirement. The court held the evidence and findings support an award of rehabilitative maintenance, not permanent spousal maintenance. The court noted the standard of living was over emphasized because Spolum also testified the standard of living was excessive and unnecessary and was a mistake and was based on D’Amato previously working two jobs and that it was unfair to consider a lifestyle based on income from a prior second job that contributed an average of additional income of $200,00 per year. The court also stated the parties had only lived together as husband and wife for 9 years. It noted prior to the marriage Spolum made $46,000 annually as a flight attendant. The court stated the evidence only supported a rehabilitative award.

The court also stated the trial court failed to consider Spolum’s dubious use of assets during the separation where she transferred $125,000 from the parties’ joint account and only had $40,000 left.

The  court stated the trial court’s finding of the need for discretionary spending of $8,343 per month was excessive. The court also found the trial court clearly erred in finding D’Amato’s income was $950,838 and that spousal maintenance should be based on the obligor’s income at the time of trial. The court noted it was unreasonable for a court to require D’Amato to work a second job in order to satisfy a maintenance award when Spolum is not required to work even one job.

The issue of spousal maintenance is a very difficult matter and requires careful evaluation of numerous factors and often the assistance of experts, including an experienced family law attorney. It is critical to promptly retain an experienced divorce lawyer if spousal maintenance is a potential issue.

Anti-Palimony Statute Does Not Bar Claim For One-Half Interest In Property Listed As Joint-Tenant

In Lendzyk vs.Wrazidlo, A14-1331 (Minn. App .July 13, 2015) the Minnesota Court of Appeals interpreted the Minnesota Anti-Palimony statute in an appeal involving a couple who were dating and commingled money in a new home they built. Boyfriend Lendzyk and girlfriend Wrazidlo began dating in 2006. At that time each owned a home in northern Minnesota. Girlfriend sold home and moved into boyfriend’s home with her two children. They then decided to build a home together. In 2008 girlfriend bought a lot, title to lot was recorded in her name and she financed a construction loan for the home.

After the construction was completed the parties arranged to refinance the construction loan. The loan was refinanced into joint tenancy and both parties signed a mortgage identifying them as joint tenants and girlfriend signed a quit claim deed that conveyed her interest in the property to herself  and boyfriend as joint tenants.

The relationship ended in 2010. In 2012 the boyfriend brought a partition action claiming one-half interest in the property requesting the property be sold and the proceeds be divided between the parties. Testimony was taken that since girlfriend sold her home she would initially buy the lot and pay the majority of the construction costs. After the home was built boyfriend would pay the refinancing cost and then pay for mortgage and insurance. The parties looked at and selected the lot together. Boyfriend testified that the parties agreement was to own the property together, build it together and start a family together. He was going to become more financially involved once he sold his home. Boyfriend paid $10,532 toward closing costs and made monthly mortgage payments and property insurance from 2008 to 2010, which together totaled $77,323. Girlfriend presented evidence she had put $201,171 towards purchasing the property and improvements.

Trial court found anti-palimony statute did not bar boyfriend’s claim to an interest in property and found that as joint tenants, the property should be sold and the proceeds equally divided.

On appeal the court interpreted the anti-palimony statute, Minn. Stat.  513.075, which in part provides that a contract between a man and woman living together out of wedlock is enforceable only if: (1) the contract is written and signed by the parties, and (2) enforcement is sought after termination of their relationship.  Minn. Stat. 513.076 states that unless a contract is executed complying with Minn. Stat. 513.075 a court is without jurisdiction to hear the matter and shall dismiss it as against public policy.

The court appeals affirmed the trial court’s decision citing to two other cases. In, In re Estate of Ericksen, 337 N. W. 2d 671, 674 (Minn. 1983) the supreme court held that even though cohabitants had not signed a contract detailing their financial arrangements regarding a home and it was solely titled in on party’s name, the probate court properly considered an unjust enrichment claim to a one-half interest in home where both parties equally contributed to the purchase and maintaining the home. In another case In re Palmen, 588 N.W. 2d 493 495 (Minn. 1999) two cohabitants agreed to built a log cabin together on a lot owned by Palmen.  After Palmen died cohabitant Schneider claimed an interest in log cabin stating it was agreed if their relationship ended she would be reimbursed her investment for labor and financial contributions to the log cabin’s construction. The trial court denied the claim, but the supreme court reversed holding the anti-palimony statute does not bar the enforcement of unwritten agreements between parties living together if a party can establish the agreement was supported by consideration independent of the couple living together in contemplation of sexual relations out of wedlock and that the party is seeking to protect their own property and is not seeking to claim the property of the cohabitant. The court noted under the facts in the current case the party was seeking to protect his own property and it was supported by independent consideration unrelated to the cohabitation.

Girlfriend also claimed boyfriend’s interest should not be one-half, but limited to the amount of his contributions. The court stated if a property is held as joint tenants there is a presumption of equal property interests. The court found this presumption was not overcome based on the evidence. The trial court found girlfriend’s testimony that boyfriend pressured her to put his name on deed and mortgage was not credible and that the only other evidence presented to rebut the presumption of equal ownership was that girlfriend made greater contributions to the property.  The Court upheld the trial court’s decision to equally divide the sales proceeds in light of lack of other evidence to rebut the presumption.

In any property or relationship dispute it is prudent to seek representation and advice from an experienced family law attorney.

Courts Cannot Retroactively Modify Child Support For Receipt Of Social Security Derivative Benefits Received Prior To Service Of Motion

In, In Re The Matter of Dakota County vs .Gillespie, A13-1240, (Minn. July 22, 2015) the Minnesota Supreme Court addressed, a Child Support Magistrate, District Court and Court of Appeals decisions that granted in part retroactive modification in child support and credit for prior derivative social security paid to the mother commencing in 2012 due to the father retiring due to a disability and him receiving social security disability benefits. At that time mom began receiving a derivative social security benefit for the children in the sum of $1,748 a month, while the father was ordered to pay $1,872 a month. Father sought a reduction because of his reduced income in retirement and the derivative benefits received by mom. Mom moved for an upward departure.

The child support magistrate granted father’s motion ,in part, offsetting the child support obligation by the derivative benefit amount reducing child support to $229 a month and also gave a partial credit for the social security benefits from the time they commenced. The magistrate stated this credit was not a retroactive modification. The magistrate relied on a Minnesota Court of Appeals decision Cty. of Grant v. Koser, 809 N.W. 2d 237, 244 ( Minn. App. 2012), which stated the child support statute did not specify the manner a court must subtract social security benefits from a support obligation, and does not limit applying a credit to either arrears or a current support obligation. The district court and subsequently the Court of Appeals affirmed the majority of the magistrate’s decision.

The Supreme Court accepted review and reversed finding a careful reading of all child support statutes 518A together reflect it is error to grant credit for derivative social security benefits received by the mother prior to when father serves notice of motion to modify. The court stated the court of appeals and the decision in Koser misinterpreted the child  support statutes. The court noted since the statute relative to derivative social security benefits did not expressly provide a post-order mechanism to account for when the benefits commenced, it stands to reason the modification and recalculation is governed by the general modification statute, which precludes retroactive modification prior to service of the motion.