Domestic Relations - Barry B. Mcgough and Gregory R. Miller

• Jurisdiction: Georgia,United States
• Publication year: 1998
• Citation: Vol. 50 No. 1

Domestic Relationsby Barry B. McGough^* and

Gregory R. Miller^**

Of the appellate cases decided during the survey period,¹ eighteen are digested here. While the legislature continued to focus on the collection of child support, the appellate courts tackled a wide range of issues.

I. Divorce Procedure

The appellate courts issued several decisions affecting parties' procedural rights when seeking a divorce. In Holtsclaw v. Holtsclaw,² the supreme court held it was error for a trial court to decline jurisdiction over a resident's claim for divorce.³ The parties moved to Georgia from Mississippi with their child. Approximately two months later, the wife returned to Mississippi. After residing in Georgia for six months, the husband filed for divorce and sought custody of their minor child.⁴ The trial court dismissed the husband's action, finding that Georgia was an inconvenient forum⁵ for the custody dispute, and the parties would be "better served" by having the divorce and custody matters handled at the same time.⁶ The supreme court reversed, holding the doctrine of

"forum non conveniens" applies to custody actions but not to actions for divorce.⁷

In Matthews v. Matthews,⁸ the supreme court reversed a divorce judgment entered after a bench trial in which the wife had timely filed a jury demand.⁹ At the first calendar call, the court granted the wife a continuance and reset the case for a bench trial on November 25th.¹⁰ Five days before the case was to be tried, the wife demanded a jury trial.¹¹ When the wife did not appear for the calendar call on November 25th, the trial court conducted a bench trial in her absence.¹² A party may demand a jury any time before the call of the case and before it is determined that the case is ready for trial.¹³ Because the trial court initially granted the wife a continuance, the trial court did not determine the case was ready for trial until November 25th.¹⁴ Because the wife had already filed a jury demand by then, her demand was timely, and the case should have been submitted to a jury.¹⁵ The court overruled Easterling v. Easterling¹⁶ to the extent it stated a party waives a jury demand by failing to appear for a nonjury trial calendar.¹⁷

In DeGarmo v. DeGarmo,¹⁸ the wife claimed she contributed separate assets to start a business with her husband and a third party. She claimed her husband and the other individual incorporated the company and caused all of the stock to be put into their names, thus excluding her.¹⁹ The court denied her motion to add the business and other stockholder.²⁰ The supreme court reversed, holding that when factual determinations must be made to resolve the proper ownership of a marital asset, joinder of the necessary third parties is mandatory.²¹

In Grim v. Grim,²² the trial court allowed the husband to testify on the support he provided the wife during the separation so long as that support was characterized as "voluntary" and he did not mention the interlocutory order.²³ He also introduced an earlier Domestic Relations Financial Affidavit showing the amount of the payments as one of his monthly expenses.²⁴ The supreme court held this evidence was improperly admitted.²⁵ Post-separation support is generally inadmissible²⁶ because it is a ruling based on less than a full hearing and has the potential for being confusing and misleading to a jury.²⁷ The creation of an exception to allow the introduction of evidence of voluntary payments could dissuade parties from settling the temporary issues themselves.²⁸ Post-separation payments are only admissible to prevent a fraud upon the court.²⁹

II. Divorce Settlement

The court of appeals decided two cases dealing with written agreements not incorporated into the divorce decree. In Arnold v. Arnold,³⁰ the parties entered into two contracts on the same day. The first was called "Contract of Settlement" and was incorporated into the divorce decree. The second contract had more specific terms than the first, but it was not incorporated into the divorce decree. The husband sued the wife for breach of contract concerning terms in the second contract. The wife claimed she was not bound by the contract because it was not incorporated into the divorce decree.³¹ The court denied her motion for directed verdict, and she appealed from an adverse jury verdict.³² The court of appeals affirmed the trial court's ruling, finding the parties' second written agreement was enforceable when the terms were not inconsistent with the divorce decree.³³ The court of appeals reached a similar holding in Sheppard v. Sheppard.³⁴ The parties entered into a settlement agreement that was not incorporated into the divorce decree.³⁵ The court held the evidence supported a finding the husband was in breach of a valid contract.³⁶

III. Alimony and Child Support

In Hawkins v. Hawkins,³⁷ the trial court ordered the husband to pay the wife periodic alimony for five years and to maintain an insurance policy on his life to secure the obligation.³⁸ The supreme court affirmed, holding the insurance requirement was a valid form of periodic alimony.³⁹ The husband claimed the divorce judgment impermissibly required payments beyond his death.⁴⁰ The court rejected the husband's argument because the decree did not impose any obligations on his estate.⁴¹ Any premiums would be paid during the husband's life.⁴² If the husband were to die, the insurance company, not the husband's estate, would pay the benefits to the wife.⁴³

The decision in Hawkins returns clarity to Georgia law regarding alimony. As the decision states, "[n]early two decades ago, this Court concluded that a trial court may order a spouse to carry life insurance for the benefit of the other spouse."⁴⁴ In 1994, however, the court held an insurance policy to secure a child support obligation was not permissible.⁴⁵ The court's stance opened the question of whether it was legal to secure an alimony obligation with a life insurance policy. Although the legislature responded to allow insurance to be required for child support,⁴⁶ no legislative enactment covered alimony for a spouse.

In Zobrist v. Bennison,⁴⁷ the supreme court held that if the obligor fails to maintain a life insurance policy as required by a decree, an action lies against the obligor's estate and the actual beneficiaries, if any.⁴⁸ Here, the father was required to maintain two insurance policies for his children. After he remarried, he named his new wife the beneficiary of one of the policies and his estate the beneficiary of the other. His will left the children the insurance proceeds from the one policy after payment of the estate's debts, including a substantial mortgage.⁴⁹ The court held the children had a cause of action not only against their father's estate, but also against their stepmother.⁵⁰

IV. Modification of Support

One of the most talked about decisions of the year was Williams v. Williams.⁵¹ When the parties divorced, they reached a settlement that allowed the husband to retain ownership of his minority interests in certain limited partnerships obtained through the husband's employment. Both parties had experts evaluate the partnerships. After the divorce, the husband sued his employer for $9.5 million for interfering with his partnership rights. The husband and his employer reached a confidential agreement that apparently involved the liquidation of the husband's partnership interests. The wife petitioned for an increase in alimony and child support, arguing the litigation settlement increased the former husband's financial status.⁵² The trial court denied the wife's petition, and the supreme court affirmed.⁵³

The supreme court held the "[c]onversion of an asset awarded in the dissolution decree will not be considered income for the purpose of assessing whether there has been a change in the financial status of the obligor spouse."⁵⁴ The majority saw the action as an attempt to relitigate the equitable division settled by the parties' own agreement after each party had financial experts review the parties' holdings.⁵⁵ The majority held the husband had been "awarded the partnership interests (along with any future gain or loss in their value) as property in the dissolution decree."⁵⁶

If the majority had held the value of the partnership interests were unknown at the time of divorce and the settlement merely determined the market value that existed all along, family law practitioners would not have been too surprised if the court had found that the husband's financial status had not changed. The majority, however, held the partnership interests had increased in value, but the increase could not be considered a change in the former husband's financial status.⁵⁷

The dissent⁵⁸ and many family law practitioners have interpreted the majority opinion as creating an exception to the modification statute.⁵⁹

The plain and unambiguous language of O.C.G.A. section 19-6-19(a) focuses upon a change in income or financial status, not upon the source of that change. Nothing in the statute expressly or implicitly exempts from a modification action those changes in income or financial status resulting from post-divorce appreciation in marital assets awarded one spouse in the equitable division of property .... It thus appears that the majority's opinion imposes an unwarranted marital-asset exemption upon a modification proceeding under O.C.G.A. section 19-6-19(a).⁶⁰

The minority found the appreciation of the partnership interests after the divorce met the threshold question of whether there had been a substantial change in the husband's financial status.⁶¹ When the obligor's ability to provide support has increased, the receiving spouse should be able to seek a modification of support.⁶² The source of the increased ability to pay should not matter.⁶³ Because O.C.G.A. section 19-6-19 does not make any distinctions based on the source of the increase,⁶⁴ the dissenting opinion seems more appropriate.

In Early v. Early,⁶⁵...