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Inherited property is not always considered separate property in Georgia divorces

Friday, March 30th, 2012

The Supreme Court of Georgia recently heard an interesting case regarding separate property in a Georgia divorce. Shaw v. Shaw, S11F1586 (2012). In that divorce case, the only issue was equitable distribution of certain property,particularly property in Florida inherited from Husband’s mother, and two accounts established by the Husband with inherited funds. Id. From the outset, the Husband directed that the property be deeded to him and his wife as tenants in common and established both accounts in the name of him and his wife, with a right of survivorship. Id. at 3-4. As a result, the trial court characterized these assets as martial property and divided them equally between the parties. Id. at 1.

The Husband appealed contending that the trial court erroneously characterized these inherited assets as martial property. Id. at 2. The Husband argued that the assets were established with funds he inherited from his mother and, thus were separate property not subject to equitable division. Id. Husband further argued that the Wife never contributed to the value of these assets, nor were they commingled with other marital funds so they should not have been transformed into marital property. Id. The Supreme Court of Georgia disagreed, holding that the accounts were “transformed into marital property when Husband gave Wife an ownership interest” on the accounts, specifically by putting her name on the accounts/deed. Id. at 3 and 4.Thus, the trial court properly characterized these assets as marital and there was no error in dividing them between the parties.

This case highlights the importance of how you treat inherited funds after you receive them. Inherited property doesn’t always equal separate property if it has not been treated as such.

Legitimation and due process in Georgia

Friday, February 17th, 2012

The Georgia Court of Appeals recently affirmed the grant of a petition for legitimation over the mother’s appeal. Murray v. Hooks, A11A1824 (2012). In that case, the father filed a petition for legitimation and was awarded temporary custody due to the mother’s incarceration. Id. at 1-2. A few months later, after a hearing that the mother failed to attend, the trial court entered a final order of legitimation and awarded custody to the father. Id. The trial court subsequently granted the mother’s motion to vacate the final order and scheduled a bench trial in the case. Both parties appeared at the trial where the trial court awarded joint legal custody, with primary custody to the father and visitation to the mother. Id.

The mother appealed, alleging “the trial court erred in its custody award and violated her due process rights by failing to provide her an adequate opportunity to be heard.” Id. at 1.The Georgia Court of Appeals affirmed, noting that the mother received adequate notice of the trial and the trial court’s final order indicated that she attended the trial. Id. at 3.Though there was no transcript included in the record, the Court noted that“[i]n the absence of a transcript, we must assume the trial court’s findings were supported by evidence presented, and the actions taken by the trial court during the hearing were appropriate.” Id. at 3, citations and punctuation omitted. The Court further pointed out that there were no due process violations based on the court’s prior hearings held in the mother’s absence because the original final order was vacated and the temporary order was replaced by the order coming from the trial,which she did attend. Id. at 3-4.

Retroactive alimony modification not allowed in Georgia

Friday, February 10th, 2012

The Supreme Court of Georgia recently heard a case addressing the issue of retroactive alimony modification in Georgia. Branham v. Branham, S11A1896 (2012). In that case, under their divorce decree, the husband was required to pay periodic alimony to the wife for 120 months “unless and until Wife dies, remarries, or cohabitates with someone else in a meretricious relationship,” and the wife was required to pay the monthly mortgage on the marital home that she was awarded. Id. Both parties quickly fell behind on these obligations. Id. The husband filed a contempt action against the wife for failing to pay the mortgage and also filed a separate action to cease his alimony obligation, alleging that the wife was cohabitating with someone in a meretricious relationship. Id. The wife subsequently filed a contempt action against the husband for his failure to pay alimony. Id. The trial court heard all three actions together and found both parties in contempt. Id. at 2. In addition, the trial court denied the husband’s motion to cease his alimony obligation, but reduced his obligation for past due alimony to zero. Id.

The wife appealed, contending that the trial court erred by retroactively reducing the husband’s alimony obligation and the Supreme Court of Georgia agreed. Id. The Court quoting longstanding Georgia law in its holding: “Retroactive modification of an alimony obligation would vitiate the finality of the judgment obtained as to each past due installment…[A] judgment modifying an alimony obligation is effective no earlier than the date of the judgment.” Id. at 2-3, quoting Hendrix v. Stone, 261 Ga. 874, 875 (1992). In this case, the ruling that husband’s alimony be extinguished clearly violates this rule, as it modifies a past obligation (i.e. one that had already come due). Thus, the Supreme Court of Georgia reversed the ruling.

Self-executing visitation provision in Georgia divorce held invalid

Monday, January 23rd, 2012

The Supreme Court of Georgia recently heard a case regarding a self-executing modification in a final decree of divorce. Johnson v. Johnson, S11F1856 (2012). In that divorce case, the final decree of divorce awarded primary physical custody of the parties’ daughter to the mother, with supervised visitation to the father. Id. The parenting plan further provided that the father’s overnight visitation must be supervised by “a reasonable adult approved by [a therapist treating the child], until such time as [the therapist] determines that supervision is not necessary.” Id. Under the parenting plan, the therapist had the additional authority “to determine how supervised visitation should be phased out over time and when supervision may end.”Id. The father appealed, contending that the “provisions concerning the termination of the supervised visitation constituted an improper self-executing modification contingent on the determination of the therapist.” Id. at 2.

The Supreme Court of Georgia agreed with the father that the provision is an improper self-executing change of visitation because it allows for an automatic change in his visitation based on a future event, without any additional judicial scrutiny. Id. at 2-3. The Court held that “a self-executing change in custody/visitation that constitutes a material change, i.e. is one‘that is allowable only upon a determination that it is in the best interests of the [child] at the time of the change,’ generally violates Georgia’s public policy founded on the best interests of the child.” Id. at 3. The responsibility for making this decision must be made by the court and cannot be delegated to another person or entity. Id. In this case, the provision regarding the change in the father’s visitation is considered a material change. Since, under this provision, it will occur automatically without any judicial scrutiny, “it is an invalid self-executing change of visitation” and must be stricken from the final divorce judgment. Id. at 4.

Custody awarded to father in Georgia divorce case despite evidence of alleged family violence

Friday, January 20th, 2012

The Supreme Court of Georgia recently affirmed a divorce action where the husband was awarded primary physical custody of the children despite evidence of alleged family violence. Finklea v. Finklea, S11F1804 (2012). At the final hearing in that divorce case, the parties “each testified extensively about acts of family violence committed by the other spouse, which led to multiple police reports filed against each other.” Id. at 2. In its final judgment, the trial court said it was making its decision “[a]fter hearing testimony of the parties and considering all the evidence tendered at trial.” Id. Neither party asked for written findings of fact supporting the custody award. Id. The trial court ultimately awarded primary physical custody to the husband.

The wife appealed, alleging that “in awarding primary physical custody of the parties’ two children to Husband, the trial court abused its discretion in failing to consider evidence of alleged family violence perpetrated by Husband against her.” Id. at 1. The Supreme Court of Georgia disagreed, holding that, under the circumstances described above, the trial court did consider evidence of family violence presented at the final hearing. Id. at 3. In addition, the Court found no abuse of discretion in the trial court’s award of primary physical custody to the husband. The trial court exercised its discretion in awarding custody to one parent over the other and “[w]here there is any evidence to support the decision of the trial court, this Court cannot say there was an abuse of discretion.” Id. at 3, quoting Haskell v. Haskell, 286 Ga. 112, 112 (2009).

In Georgia, trial court cannot rely on evidence from temporary hearing in making final judgment

Monday, January 16th, 2012

The Supreme Court of Georgia recently reversed a trial court’s decision in a custody modification case because the trial court erroneously relied on evidence from the temporary hearing in making its final custody determination. Vaughn v. Davis, S11A1950 (2012). In that case, the parties had been granted joint legal and physical custody of their children in their divorce action.Neither was required to pay child support to the other, but they were ordered to split the children’s expenses. Id. The mother later filed a motion for change of custody and child support. Id. At the temporary hearing at which both parties appeared pro se, the trial court entered a temporary order awarding primary physical custody to the father, with the visitation to the mother. The mother was also ordered to pay child support to the father. Id.

The mother retained an attorney prior to the final hearing in the case. At the final hearing, the trial court again granted primary physical custody to the father, with visitation for the mother.Id. at 2. After her motion for a new trial was denied, the mother appealed, contending “that the trial court erred by relying on evidence adduced at the temporary hearing.” Id.

The Supreme Court of Georgia agreed with the mother, citing a case from 2010 which held that “[t]he nature and quality of the evicence presented at a temporary hearing is likely to be different than that which is ultimately presented at the final hearing, and parties should ordinarily expect that only that evidence which their opponent sees fit to offer at the final, more formal hearing will be relied on to support the permanent custody award…Accordingly, we now hold that, absent express notice to the parties, it is error for a trial court to rely on evidence from the temporary hearing in making its final custody determination.” Id. at 2-3, quoting Pace v. Pace, 287 Ga. 899, 901 (2010).

Here, it is clear that the trial court relied on evidence from the temporary hearing in reaching its final custody decision, and “there is no indication that the parties were notified in advance that this was going to happen.” Vaughn at 3. Thus, the trial court’s order must be reversed and remanded for further proceedings.

Prenuptial agreement upheld in Georgia divorce case

Monday, December 26th, 2011

The Supreme Court of Georgia recently heard an appeal of a divorce case, which highlights the security, or risk (depending on which side you are on), of entering into a prenuptial agreement in Georgia. Sides v. Sides, S11F1140 (2011). In that case, the parties began dating in 1989 and, shortly thereafter, the Wife became pregnant. Id. Due to the great disparity in assets and income between the parties, they negotiated and signed a prenuptial agreement before marrying in 1990. Id. Under the agreement, “Wife would have been entitled to substantially more resources if the parties divorced after their twenty-year anniversary, and substantially less if the parties divorced prior to their twenty year anniversary.” Id. at 2. Nearly twenty years later, the Husband filed a Compliant for Divorce and Motion to Enforce the Prenuptial Agreement, which the trial court granted a mere 62 days prior to the couple’s twenty year anniversary, and the Wife appealed. Id.

The Supreme Court of Georgia affirmed the enforcement of the prenuptial agreement. The Court first laid out the factors to be considered by the trial court in deciding the validity of the prenuptial agreement: “(1) [W]as the agreement obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of material facts? (2) [I]s the agreement unconscionable?(3) Have the facts and circumstances changed since the agreement was executed, so as to make its enforcement unfair and unreasonable?” Id., quoting Scherer v. Scherer, 249 Ga.635, 641 (3) (1982).

In this case, both attorneys “deposed that they would not have allowed their clients to enter the agreement without full financial disclosures being made,” and Wife was long aware of the “vast disparity” between their incomes. Id. at 3. Thus, the evidence supported that full financial disclosures were made prior to signing and the agreement was not unconscionable. In addition,the increase in Husband’s net worth was anticipated and, therefore, it was not a “change of circumstance that would make the enforcement of the agreement unfair and unreasonable.” Id. at4. The trial court, thus, did not abuse its discretion in upholding the prenuptial agreement.

Primary custody awarded to one parent in Georgia even where both are deemed fit parents

Friday, December 23rd, 2011

In Georgia, even in divorce cases with two fit parents, one parent will be awarded primary physical custody. In a recent divorce case with two fit parents, the trial court awarded primary physical custody of the parties’ two minor children to the Wife, and the Husband appealed. Rowden v. Rowden, S11F0812 (2011).

In affirming the trial court’s ruling, the Supreme Court of Georgia stated that: “In a contest between parents over the custody of a child [or children], the trial court has very broad discretion, looking always to the best interest of the child[ren], and may award the child[ren] to one even though the other may not be an unfit person to exercise custody or had not otherwise lost the right to custody.” Id. at 2, quoting LaFont v. Rouviere, 283 Ga. 60, 62 (2) (2008). Here, the trial court found that both parents were fit and spent quality time with the children. Id. at 3. However, “Husband did not have a concrete childcare plan for the children, nor did he engage his children in age-appropriate activities with other children that could have assisted in their social development. Wife, on the other hand, got the children involved in summer camps, lived near her own parents (who could help her with the children), and, unlike Husband, planned social events for the children such as birthday parties.” Id. The Supreme Court of Georgia therefore held that the evidence supported the trial court’s decision to award primary physical custody to the mother.

It is important to note that the trial court was not saying that the father was not a fit or good parent. Rather, it relied on the evidence above to tip the scales in favor of the mother for primary physical custody.

Legitimation and abandonment in Georgia

Monday, November 28th, 2011

The Georgia Court of Appeals recently heard an appeal of the grant of a legitimation petition, where the father was absent during the majority of the pregnancy, but in the child’s life from the moment he was born. Caldwell v. Meadows, A11A1031 (2011). In that case, the parties had a short relationship and then had virtually no contact during the pregnancy. Id. at 3.Toward the end of the pregnancy, the parties reconnected and even went shopping together for the baby. Id. The father visited the child in the hospital after he was born, and the mother and child moved in with the father for several days after coming home from the hospital. Id. at 4. After the mother moved to Georgia with the child, the father voluntarily paid child support, provided health insurance, and visited the child 22 times over two years. Id. at 4. After being asked by the mother’s attorney not to contact the child anymore, the father filed a petition for legitimation, which was granted by the trial court, along with joint legal custody and visitation for the father. Id. at 1 and 4.

The mother appealed, asserting that the trial court erred in excluding the issue of the father’s abandonment during the pregnancy. Id. at 1. The Georgia Court of Appeals disagreed,holding that “[w]hile a father’s lack of involvement prior to a child’s birth ‘is as significant as such a disregard after the child is born,’ we are aware of no authority limiting a trial court’s inquiry into whether a father has abandoned his opportunity interest to the period before the child’s birth especially where, as here, the father evinced such a clear intent to be involved in his child’s life following his birth.” Id. at 6-7; quoting Turner v. Wright, 217 Ga. App. 368, 369 (1995). The question in considering whether the father had legally abandoned his child is not whether “the father could have done more,” but rather whether the father “has done so little as to constitute abandonment.” Id. at 7; quoting Binns v.Fairnot, 292 Ga .App. 336 (2008). In this case, this father was more involved than many out of town parents in his child’s life. Thus, there was clearly no abandonment.

Divorce decree cannot be modified in contempt case in Georgia

Monday, November 21st, 2011

The Georgia Court of Appeals recently heard a case addressing an alleged modification of a divorce decree in a contempt case. In that case, the parties had joint legal and physical custody of their children. Earle v. Earle, A11A1450 (2011). The father had final decision-making authority over extracurricular activities. Id. at 2. The father later filed a motion for contempt, alleging that the mother refused “to allow the daughter to participate in certain golf tournaments during her custodial time, and for continuing to use a golf instructor for the child that [the father] had previously fired.” Id. at 2-3. After a hearing, the court denied the father’s motion, holding that “the mother could use her custodial time with the children ‘in any way she deems appropriate.’” Id. at 3.

The father appealed, contending that “the trial court improperly modified the original divorce decree” by adding the new language above “which results in a material modification of the decree’s provision regarding his final decision making authority concerning the children’s extracurricular activities.” Id. at 4. The Georgia Court of Appeals disagreed with the father, stating that though a court cannot modify a divorce decree in a contempt order, it can interpret and clarify its own orders. Id. at 5. The Court held that, in this case, “the trial court did not impermissibly modify the earlier decree but instead clarified the extent as to which the father’s decision making as to children’s extracurricular activities could encroach upon the mother’s custodial time.” Id.

This case addresses an interesting issue that can come up post-divorce. If you have final decision making regarding extracurricular activities, it now seems that you must take your former spouse’s custodial time into consideration in scheduling these activities. After this case, one probably should not over schedule the children during the times in which they are in the custody of the other parent.