Spring 1993 - Note this family law exam is old and the law may have changed
Assume the following facts. Assume that the couple involved in this dispute are Minnesota residents and that Minnesota law applies. Assume the 14-year marriage between George, a well-off former professional quarterback with the Minnesota Vikings football team, and his spouse, Karon, a full-time homemaker with a high school diploma, broke down when George met Sandy, a wealthy architect. George has been having an affair with Sandy for the past four months. After the divorce, George intends to live with Sandy at her Malibu, California country estate when he's not traveling around the nation broadcasting sporting events (his current job).
George and Karon have two children, girls ages 10 & 12. Both have expressed a strong preference to the trial judge to live with George who they view as more exciting and with whom they say they have a very strong bond. Karon would be considered by most courts as their primary caretaker, although when George has been home he's spent as much time as he could with them. A custody evaluation prepared for the court by a social worker recognized that Karon has been the primary parent for the children since birth. The social worker recommended that the couple receive joint legal custody but that sole physical custody be placed with George because of the "extremely strong psychological attachment the children have for him and because he is better able to cope with them at an adult level." During the couple's two-month separation the children have lived with Karon, who has twice refused to allow George to see them on weekends.
George has made it clear that if he is given joint legal and sole physical custody, he will see to it that Karon has liberal visitation with the children in the summer, at Christmas and on other holidays.
Evidence at trial indicated that after the divorce George is planning to move to California to live with Sandy and to take a job as the Vice President of the Oakland Raider professional football team. Karon opposes the move, especially if George receives custody of the children. She has asked for sole legal and physical custody of them. She introduced evidence indicating that George doesn't intend to marry Sandy, that he doesn't believe in God, and that he is a lax disciplinarian. The evidence indicated that Karon is a Sunday school teacher at the local Lutheran church and that the children regularly attend church with her every Sunday. Karon has the reputation of being overly strict with the children. Evidence at trial indicated that on occasion she has "spanked the children with a wooden spoon."
Sandy testified at the trial that she and the children get along well, that they will have great bedrooms, a riding stable and their own horses, a swimming pool, and a housekeeper if they are allowed to move with George and George lives with her on her country estate.
An antenuptial agreement was introduced into evidence during the trial. The agreement was executed in 1979, just after Minnesota's antenuptial statute took effect. All of the statutory requirements were met. The agreement contained a provision that declared in part that "Should the marriage break down, George is to receive sole legal and physical custody of any children, should the couple have children. Karon shall receive $5,000.00 per month for 48 months in temporary maintenance, then nothing. The parties shall retain as their own all nonmarital property. Income from both party's employment during the marriage which is invested during the marriage in stock, bonds or real estate, remains the property of the party who earned the money."
Karon testified at the trial that she fully understood the terms of the agreement when it was entered. She said she voluntarily signed it, that there was no duress. She recalled that George insisted that she see a lawyer to represent her interests but she didn't want to. She explained she "never really thought she'd ever be divorced from George" and "it just didn't seem like the thing to do." She admitted that she carefully read most of the provisions of the contract. George asks that the terms of the contract be enforced.
During the trial the judge expressed concern over how stock given George by members of his family before and during the marriage should be treated. The largest amount of stock was for his family's cleaning business. George's parents, who built the business "from scratch," gave George and his sister each a 40% stock interest in the business.
Evidence during the trial indicated that George's role in the cleaning business during the past dozen years has been to act as an occasional media spokesperson and attend board meetings. He is a member of the family board of directors (there are only four including George). George testified he played no direct role in the day-to-day operation of the business, although if he doesn't like something, he is quick to tell his parents about it. George's mother is the President and Chief Executive Officer of the business. She testified that she makes most of the major decisions for the business, although on occasion she has relied on George's advice. All four members of the board annually voted to use excess earnings to purchase the real estate the company now owns.
The stock given George by his family before the marriage was valued on the day he married Karon at $1 million dollars. It is now valued at $10 million. (Value was determined by arriving at the dollar value of George's 40% interest in the business. No one disputes that current value.) The large increase in value is due to the fact that each year during the past ten years the business made a profit (called by George and his family at trial "retained earnings" or "excess profit.") All of the profit (retained earnings) was invested in real estate rather than being distributed to the stockholders.
George also received an additional $1 million in stock during the marriage from his parents as a gift "only to him." This is stock in Micro-Chip, Inc., a New York computer company, that George's mother purchased "on speculation." If sold today, this stock would return $2 million dollars cash.
Karon contends that the increased value in all of the stock during the marriage is marital property and subject to division. George insists it's all nonmarital.
Analyze and discuss the various issues a court would consider in ruling on the validity of the antenuptial agreement, the division of all the stock, and which parent should receive custody of the children.
ANSWERS Domestic Relations Essay Exam
In a Minnesota dissolution proceeding child custody must be determined by a consideration of the best interests of the child. M.S. § 518.17 subd. 3(a). The legislature has set out twelve criteria to aid the court in determining what the best interest of the child would be. Id. at subd. 1(a). The statute directs consideration of all relevant factors, not merely the 12 enumerated. A court may appoint a guardian ad litem to represent the interests of the children in any custody proceeding. If the court has reason to believe a child is the victim of abuse or neglect, the court must appoint a guardian. In either case, the guardian will advise the court re: custody, support and visitation.
The court may also order an investigation and report concerning custody in any contested custody proceeding. The investigation is to be conducted by the county welfare agency or dept. of court services. This report must consider and evaluate all the factors of § 518.17 subd. 1(a) and include a detailed analysis of these factors. In addition, if joint custody is sought or recommended the report must evaluate the factors of § 518.17 subd. 2, state the position of each party, the investigator's recommendation and reason for the recommendation and reference established means for dispute resolution between the parties.
In this case, although the court has received evidence that Karon ("K") has occasionally spanked the children with a wooden spoon, this is probably within her parental prerogatives. Minnesota criminal assault statutes contain an exception for parental physical discipline aimed at correcting a child's behavior. Without further evidence of more severe physical punishment or injury K's discipline methods probably fall within the exception and thus do not amount to abuse. Thus, the court is not required to appoint a guardian ad litem.
The social workers report presumably complies with the statutory directives and will be of great aid to the judge (not jury) who decides the custody issue.
A. The wishes of the parents.
• Here both parents have conflicting desires, so the factor will not be very dispositive.
B. Reasonable preference of the children.
• Both children should be of sufficient age to express a preference. They express a strong preference to live with George ("G") because he is "more exciting" and with whom they have a stronger bond. The "excitement" factor may arouse the court's suspicion - it's not a particularly mature approach by the children - and could seek an in chambers interview to ask further questions of the girls. M.S. § 518.166.
C. Primary caretaker.
• Here K is the acknowledged primary parent. The legislature has repeatedly directed the courts that this factor creates no presumption re: best interests of the child. It may indicate that a strong psychological bond exists between that parent and the children.
D. Intimacy of relationship.
• Here, K probably has a more intimate relationship because of the time spent with the children. However, this is counterbalanced by the evidence of the bond between the girls and G.
E. Interrelationships between the children and parents and significant others.
• Evidence that Sandy and the children "get along well" is bolstered by the evidence that the children wish to move to California.
F. Child's adjustment to home.
• This favors K.
G. Length of time in stable environment.
• This also favors K, although the children's age is sufficient that continuity may not be as important as it would be if they were younger.
H. Permanence of proposed custodial home.
• G's home with Sandy is not very permanent yet and it may be difficult for the children to adjust to a situation which has yet to become settled.
I. J. K. Mental health, capacity to love, children's cultural background.
• The factors seem evenly weighted between both G & K.
L. Abuse between parents.
• No evidence of this. In addition the court may consider the fact that K has refused to allow G to see the children on two weekends, M.S. § 518.175 subd. 4., however it is unknown whether this was interference with "duly established" visitation. It is evidence of an inability of the parents to cooperate.
The court shall use a rebuttable presumption that joint legal custody, if requested, is in the best interest of the child. The court must make detailed findings considering--ability to cooperate; methods of dispute resolution; whether sole authority would be detrimental; and whether interspousal abuse has occurred.
Here, the court only has evidence that K, on two occasions, refused visitation. Presumably, however the social worker did give a report with detailed findings on these factors.
The court should not consider the religious differences of the parents nor G and Sandy's unmarried relationship (at least as far as it does not affect G's relationship to the children) M.S. § 518.17 Subd. 1. It may be considered under the rubric of the permanency of the proposed custodial home. The court should not prefer K over G on the basis of the sex of the girls.
Since G has made clear his intention to move the court might incorporate this into her findings and thus avoid the Auge analysis. If not, then the presumption which allows a custodial parent to move out of state must be overcome by K (if G received custody).
K must make a prima facie case which demonstrates that the move is likely to endanger the children's physical or emotional health in order to obtain an evidentiary hearing. Because not allowing a move would effect a change in custody, and custody must not be modified without a full evidentiary hearing, G's request to move should be granted unless K makes the prima facie showing. Then K must go forward with a preponderance of evidence that the move would endanger the children.
II. Antenuptial Agreement.
Antenuptial agreements are controlled by statute for nonmarital property and by the common law for marital property. The agreement must be analyzed for procedural fairness at the time of execution for substantive fairness at the time of execution and at dissolution.
Both the statute and common law require fair and full disclosure of assets and earnings and that two parties have the opportunity to consult with independent counsel. K has stated that she refused counsel after G's insistence, that she fully understood the terms of the agreement and that she was under no duress. The facts are silent whether G made full disclosure, but let's assume he did. If so, the agreement argues comports with procedural fairness under both the statute and the common law.
The court will not allow the provision regarding custody of the children--it is invalid as against public policy. Maintenance and property division are the proper subjects of the agreement however.
The nonmarital property will be awarded to G unless K meets her burden of proof (preponderance of evidence) that the agreement is unfair. G will have the burden of proof re: marital property.
The agreement does not seem to have been unconsciousable re: nonmarital property either at execution or now. Full disclosure helps avoid overreaching. However, as regards both income and maintenance the court may look at the agreement with a raised eyebrow. Since K would probably be awarded permanent maintenance in light of her lack of job skills and the length of the marriage, the agreement probably does not stand up to a procedural fairness analysis. The agreement must be examined at dissolution to determine if circumstances have so changed that they do not comport with what would have been the reasonable expectations of the parties and if unforeseen events would make enforcement unreasonable. K's testimony that she never thought she'd be divorced from G does not really go to foreseeability, merely that she didn't foresee it, but the court is not going to like the radical destruction of her maintenance and property rights that the agreement works.
The non-marital aspects probably pass muster. The custody provision will be stricter and the marital property provision probably fails. G will bear a heavy burden to convince the court that this part is substantively fair.
III. Property Division
Minnesota is an equitable property distribution state. The court will make a just and equitable division without regard to fault and must make detailed findings demonstrating its consideration of such factors as length of marriage, age, skills, income of parties, etc. Each spouse will be conclusively presumed to have contributed substantially to the acquisition of marital property. All property acquired during marriage is presumed to be marital property regardless of form of title. Income is marital property, regardless of source. Nonmarital property is property acquired before marriage or as an exclusive gift to one spouse but not the other.
This was given to G only by his parents during the marriage. Its appreciation is due solely to inflation or market forces since it is publicly traded. In any event, the increase in value has nothing to do with G's efforts. The stock dividends, if any, would be marital property because they would be income. However the stock and its appreciation are both non-marital.
Family business stock
Nardini instructs that appreciation not due to inflation or market forces is marital property. In that case, a closely held business grew largely through the efforts of the husband (and his wife who made his home.) Although G is not as active a player as Mr. Nardini, evidence demonstrates that he does play a not insignificant role. He sits as a member of the board, which has voted to retain earnings each year instead of issuing dividends. Furthermore as Judge Cripper pointed out in his strong Duffy dissent, when a closely held business can decide to retain earnings rather than pay dividends, it is an impermissible elevation of the form of the asset to declare it to be non-marital. Had the company paid dividends, those dividends would have been marital property. Because of the discretionary decision of the board to retain earnings has affected significantly the value of the stock, that appreciation should also be deemed marital property.
Consequently, because G has had some ability to direct the company's operation and has had a similar ability to affect its decision to retain earnings, most if not all of the $9 million in appreciation should be marital property and be justly and equitably distributed.
MINNESOTA BAR EXAMINATION DOMESTIC RELATIONS
JULY 25, 2000
Wendy, an unmarried 17 year-old high school senior, discovered in the March prior to her graduation that she was pregnant. The father was her classmate Brad, the only man with whom she had had sexual relations. When she told him of the pregnancy and suggested that they marry during the summer, he refused to marry her. He told her that he was going away to college and didn't want to be tied down. He offered to pay for an abortion, but Wendy refused. Brad left town and did not maintain contact with Wendy, or seek contact with the child.
Wendy told her childhood friend, 22-year-old Harold Foster, about her pregnancy. Harold, who had always been devoted to Wendy, offered to marry her, and promised to raise the child as his own, despite Brad being the biological father. Wendy accepted despite the fact that she had never been attracted to Harold. They married in June, and when her child was born three months later, they named him "Charles Foster." Wendy became a full-time homemaker, and provided the majority of Charles' care. However, when Harold came home from his full-time job, he participated in Charles' physical care and upbringing. When Charles was able to talk, he called Harold "Daddy" and Wendy "Mommy." Harold supported all three family members on his salary. When Charles was two, Wendy went to work part time in order to supplement the family income; Charles went to daycare for half the day.
The marriage between Wendy and Harold deteriorated because of incompatibility. After five years of marriage, Wendy left Harold, taking Charles with her, and moved into an apartment.
Wendy has started divorce proceedings against Harold, and has asked for sole custody of Charles. Wendy seeks to challenge Harold's paternity of the child. Harold has no objections to the divorce or to paying child support, but is asking for custody, sole or joint, of Charles, or visitation.
Brad, who has married a woman who cannot have children, has intervened asking for recognition of his paternity, and custody of or visitation with Charles.
Wendy opposes both requests.
Analyze and evaluate the claims of Brad and Harold to paternity, custody, and visitation, and the effect of Wendy's challenge to Harold's paternity.
REPRESENTATIVE GOOD ANSWER FAMILY LAW EXAM
CT = Court
CF = Charles Foster
HF = Harold Foster
W = Wendy
B = Brad
Paternity is presumed if:
1.) Child is conceived during marriage.
2.) Born during marriage.
3.) Lives with the parent who supports the child and holds out the child as his own.
4.) Blood test, or genetic tests show that the probability of being the biological father 97%+.
If two males each claim an element for presumption of paternity the courts look closer to see who is actually the "father" of the child. Biology alone doesn't make a father.
In this case CF was born while W was married to HF. HF also supported CF and held him out as his child. CF called HF his "Daddy." However, CF was conceived out of wedlock, with B presumably the natural father. (If W is telling the truth). Therefore, both HF and B have a presumption of paternity. Therefore a court would have to decide paternity by deciding who is the real "father" of CF.
B could take a blood (DNA) test and presumably show that is factual (close to 100%) the biological father of the child. However, B never acted like a father. He never supported CF, or even visited.
On the other hand, HF has supported CF, and given him his last name. HF and CF have probably developed a true father/child relationship. HF still wants to continue to support CF based on their close relationship and HF's bond with the child. The court might just award paternity to HF even though he is clearly not CF's biological father.
Who gets child custody?
Courts use "the best interest of the child" standard to award both physical and legal custody. Joint custody is not presumed. Before awarding joint custody the court must consider how well the parents can cooperate – besides other "best interest of the child" considerations. The court looks to many factors in deciding custody including:
1.) Child's preferences
2.) Parent's preferences
3.) Institutions the child belongs to. (i.e., school, church)
4.) Where the siblings are
5.) Primary caretaker (a factor only used to be a presumption)
6.) Health of the child/parent
7.) Money/pecuniary issues
In this case CF is only five. The younger the child, the less weight the court typically gives to the child's preference. The judge however, might talk with CF in chambers and ask him for his preference.
Note: HF did provide physical care to CF when he got home from work.
Next, CF has probably just started school so the "institutions" factor may not be considered too heavily.
W was the primary caretaker for CF for all of his life, except for the ½ days at daycare. He may have a closer bond with her. There are no facts about HF's ability to care for a young child. Also, he has a full-time job and CF would have to be in daycare all day if he received sole custody.
There are no special facts about the health of any parties. Also, CF has no siblings.
B has a significant hurdle to overcome in getting custody, since for five years he has had no contact with CF. It is more likely HF will get custody than B. B actually wanted W to abort CF.
The court would have to be assured that HF and W would cooperate before awarding joint physical custody.
Primarily due to the fact that W was the primary caregiver of CF, the court would probably give her at least joint custody, but probably sole custody. The court may consider giving HF joint "legal custody" so he can continue making decisions about CF's upbringing. Joint physical custody might be a problem if HF and W cannot get along. They divorced because of "incompatibility."
Visitation rights are given freely to parents, unless a parent abuses or endangers a child. Failure to pay child support will not cause the withholding of visitation rights.
Because of HF's close relationship with CF and his financial support, the court would most likely give HF very liberal visitation rights. B might have to ask for a hearing to gain visitation rights since he has not been a part of CF's life. He could show by a blood test that he truly is the father. He could argue that due process requires that at least he could get a hearing on all of these issues.
The court probably would not place a great deal of weight on the fact that B and his wife can't have kids. If visitation was awarded, it probably would be family restricted – at least initially due, to the fact that CF doesn't even know who B is. Visitation might even have to be supervised initially.
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