It is said that desperate times call for desperate measures.  Many people out there today are facing some financial headwinds that were not reasonably foreseeable a few months ago.  Today they have businesses to operate or even daily bills to pay while afflicted with cash shortages.

The reverse mortgage or more properly the Home Equity Conversion Mortgage (HECM) has been around for a while.  In an age of low interest rates it has seemed like a device which merited attention.  Many of today’s divorces involve folks who qualify by age (you must be 62) and have significant equity trapped in a home, which is not appreciating as it did in the past.  As we have noted, the current financial crisis has caused increased interest in this product.

The problem has always been that most conventional mortgage brokers stay away from reverse mortgage products.  If you search for a reverse mortgage on the internet you will be scooped up by dozens of websites that instantly want your name, address, home value and current mortgage information.  That is concerning in its own right.  Then, over the weekend, I heard the inevitable horror story of a family that “lost the family home” to what seemed like a good way to supplement household income.  If you want to hear the entire story it ran on May 16, 2020 and can be found at a Public Radio Exchange (PRX) website.

As an attorney, I found the PRX episode titled “Homewreckers” to be a pretty poorly executed and highly prejudiced piece of journalism with the current U.S. Treasury Secretary loudly depicted as the villain.  The point of this article is to talk about practical pitfalls rather than public policy.  Suffice to say that the lending industry is not always honorable.  But, I also have some problems with people who took things like no doc mortgages claiming to be the victims. Now, allow me to try to cast off my prejudices and stick to the facts I have researched.

There are a lot of different programs out there.  And, as noted, trusty human reverse mortgage lenders don’t seem to be widely available.  So, you may have to go fishing on the internet and risk being hounded by pop-up advertising each time you check messages or the news.  Once you find something that sounds like a plan, the key is to ask to see what the loan documents look like and insist that a copy be made available for you to print. DO NOT let these people come to your house.  Yes, the lender is going to need someone to appraise your home’s value after you understand the transaction from top to bottom.  The only other reason you need to be visited is to hotbox you into signing a deal you may soon wish you had not. The PRX story, although highly prejudiced, does identify in explicit detail some things that can go wrong.

Let’s say you see a reverse mortgage you like in terms of what the loan will amount to and how it operates.  My general impression is that some of these lenders are interested in getting title to your house rather than making a simple loan against the equity you have in it.  That’s why you need to see the actual documents you will sign and take them to a real estate lawyer who will represent you and not the lender.  Never, ever, ever, sign a loan of this kind without a lawyer or relying upon a lawyer you are not paying.  This is not a friendly business.  Some people see that programs are FHA approved and believe that protects them.  It may or may no,t but it is your job to protect your home equity not a government agency.

Among the games I have read and heard about in the PRX story are the following:

  1. Appraisal games. It would appear you can be “low balled” on the appraisal for the loan so that you cannot borrow as much as you would like.  You can also be “high balled”, to encourage you to borrow more than you really need to borrow.  Do some research on your own to see what your property is worth and it may be worthwhile to get your own appraisal.
  2. You need to be at least 62. You will need to pay your real estate taxes, condo assessments and/or repair bills on time.  Your failure to do that for any reason is a default of the mortgage and can produce foreclosure.  Most people are deathly frightened of foreclosure and with good reason, but there seems to be some evidence that aggressive lenders threaten foreclosure to intimidate the homeowner into doing what they want.  Most conventional mortgage lenders view these defaults as their headache.  It seems that some of the reverse mortgage lenders are more willing to get in your face and threaten to take your property.
  3. Make certain the lawyer you confer with tells you in detail what happens if you don’t or can’t live in the house any longer. These loans appear to have covenants on your part that you will remain in the house.  That’s normal in conventional financing.  But realize that if you are 62 or older, age and infirmity may deprive you of your well thought-out plan to stay.  If you have to move out you may be forced to sell against your wishes.  If your plan was to give the house to your kids, be aware that this reverse mortgage gets in the way.  This may be a useful place to sit down with your children and have a frank conversation about the house.  In the story reported on PRX, a family member had been recruited to come live with Mom and Pop.  Pop died and Mom needed to move to assisted living.  The family member ended up homeless because she had no rights under the reverse mortgage.  Realize that in fairness to the lenders, they need to see the house sold to get back the money they lent you on this mortgage.  Understand as well that sometimes life insurance or other assets the borrower owns may be used to pay off the debt due the lender on the reverse mortgage.  You should have a clear understanding of what occurs if you die before the house is sold.  You might have a $300,000 house but owe the reverse mortgage lender $150,000.  Can the lender insist you sell to anyone offering more than the amount you owe?  Do you have the right to make the lender wait for years and mess with your now empty house while your heirs unreasonably insist the house is worth $300,000?  The person who will be your executor needs to know how the estate’s right to sell at the highest price corresponds with the lender’s right to get his loan money back.
  4. The fees associated with doing this financing appear to be higher than conventional financing. So, get that in writing.  Your $150,000 loan from home equity may be only $125,000 depending on the fees, usually charged up front.  Realize that many of these fees may be negotiated or waived if the lender wants to close the loan.  On the other hand, no one is lending to you for free.  These deals also involve your having to purchase private mortgage insurance.  You should find out the annual percentage rate (APR) on any financing because the stated interest may look low, but the “fees” paid at closing drive it much higher.
  5. Don’t outsmart yourself. This is what happened to all of those folks who took out home equity loans (HELOC) in 2005-2007 to dump money into the stock market.  It worked well until it didn’t.  Borrowing money to gamble is never a sound plan.

In short, proceed cautiously and lawyer up.  Yes, every lender uses standard forms.  They are written by the lender, for the lender.

It is always a good idea to keep an eye on other jurisdictions for how they deal with novel or emerging issues. One issue recently considered was the use of non-disparagement orders to prevent parties from criticizing each other in public, in front of their children, and to third parties. It is a fairly common tool for the courts to try to force a de-escalation of rhetoric and antagonism between parties without imposing fines or sanctions on them. These restrictions are not uncommon as a form of relief in Pennsylvania and have been found in the “rules of conduct” some courts append to their orders, though such “rules of conduct” have not always been easy to enforce and some courts have discarded them in favor of other language in their orders.

Recently, this issues was addressed by the Supreme Court of Massachusetts which deemed a non-disparagement order entered in a custody case as unconstitutional.  The ruling was fundamentally rooted in the concept of whether the non-disparagement order unconstitutionally restricted a party’s First Amendment rights to express their opinion. Even if those opinions are disparaging comments about their estranged spouse. In this case, the father was a voracious social media poster who made accusations against mother and provided updates and commentary on the custody case. Mother sought and secured a non-disparagement order to prevent father from litigating their case in the court of Facebook friend opinion. In overturning the order, the Court found that there was not a sufficient basis in the protection of the child from Father’s discourse on the case to justify preventing him from making public comments about it. There is also the consideration that mother has an avenue for relief available through a defamation action.

There are plenty of good, rational reasons for these orders ranging from preventing unnecessarily antagonistic behavior between the parties, to ensuring that when a child does an internet search of their parents at some point, they do not discover Facebook posts or a blog devoted their parents’ custody battle. Whether those rational reasons justifying a restriction is someone’s speech survives the scrutiny of a constitutional challenge is a different consideration altogether.

If this form of relief falls out of favor or is found to be unconstitutional in Pennsylvania, aside from increased antagonism in family law cases, there would like be an increase in defamation actions seeking financial damages. Those types of actions can have real economic consequences on parties since they may be subject to a judge or jury’s determination of what, if any, damages should be levied against the offender.

It is worth noting, however, that this case only deals with a judicially issued non-disparagement order.  Provisions in agreements and stipulations will be enforceable, particularly in Pennsylvania which applies a strong contract interpretation to family law agreements.

The ruling in Massachusetts is interesting. It will be worth seeing whether a legislative answer is created for the Massachusetts family law code that can survive a constitutional challenge.

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Aaron Weems is a partner in Fox Rothschild’s Blue Bell, Montgomery County, Pennsylvania office and practices throughout the greater Philadelphia region. Aaron can be reached at 610-397-7989; aweems@foxrothschild.com and found on Twitter @AaronWeemsAtty.

On March 27, 2020, we wrote about provisions in the 2020 CARES Act, which expanded 401(k) loan eligibility and permitted funds to be drawn from IRAs without tax consequence, so long as the withdrawal was repaid by 2023.  As we wrote this, there seemed to be some “too good to be true elements” to the package.  As one might suspect, we now have additional “guidance” from the Joint Committee on Taxation.  For those bypassed or still awaiting federally backed loans, the IRA strategy may be the only practical option, but here is what “MarketWatch” and the “Wall Street Journal” reported on May 4.

If you go the IRA route, you do actually report the withdrawal as income (the 10% penalty appears to be waived).  It is reported over three years in equal tranches.  Therefore, that does mean tax on $33,333 per year in 2020, 2021 and 2022. However, if you repay in 2023 you can get your tax payments credited or refunded by filing amended returns for the prior years in which you reported the withdrawal as income.  In practical cash flow terms, this appears to signal that if you take the full $100,000, you need to remit $6,600 to $10,000 to Uncle Sam immediately and “reserve” an equal amount to pay similar payments in 2021 and 2022.  Of course, you could “invest” the float money in your business or the stock market until the tax is due, but that wouldn’t be a prudent thing to do.  The amount you need to set aside for taxes depends, of course, on your income in those years when it will have to be reported.  This is why our estimated tax payments range from $6,600 to $10,000.  Your accountant will benefit from having to prepare three amended returns.  You can avoid that by repaying the entire distribution before your 2020 return is due, but what fun is that?  The Journal also notes that once you take the distribution you need to develop a payback plan.  That money is not going to fall from the sky in 2023.

On the 401(k) loan side, your plan is going to set a repayment amount and it will come out of your paycheck.  The author of the Wall Street Journal article suggests you borrow half of what you think you will need.  His reasoning is that we tend to overstate crises and he reminds us that money that is “out on loan,” is not invested and earning returns.  The other risk is that you lose your job.  That triggers a call of the loan and unless you can instantly repay.  The amount you don’t tender back is treated as a distribution of income.  I have not seen guidance on whether that involuntary distribution gets the same three-year look back treatment you can get from an IRA withdrawal.  The loan maximum has doubled to $100,000 or 100% of the account balance.  The loan repayment terms are the province of the retirement plan itself.  Understand that you are not borrowing from your employer.  You are borrowing your own money.

In the end, the CARES Act remedies given in March have been somewhat “taken” in May.  However, the list of alternate resources to keep a business afloat or just put food on the table is not changing soon.  If you were considering a loan or withdrawal, it would be wise to ring up your friendly accountant first, to explore which options makes the most sense for your situation.

First, a confession. I watch very few moves and when I do, I frequently feel stupid because I don’t see all the nuances others do.  So, don’t see this move on my say so.  Truth is that since it was premiered in 2017, the movie won a number of awards in Europe.  It was produced in France but was very highly reviewed here in the states was well.  Rotten Tomatoes scored it 95%.

The movie is Jusqu’à la garde or simply “Custody”.  Yes it is en francais so be prepared for subtitles.  Actually, you won’t need to read subtitles to absorb the import of the film.  It is told through the face of Thomas Gioria, an actor who plays the role of 11-year-old Julien.  The movie opens in the office of the French equivalent of the custody conciliator; a person who decides how physical custody will be allocated.  You hear the lawyers for both sides pitch their case as to how Mother and Father should be involved with Julien.  You see a skeptical hearing officer who is not afraid to challenge, and, at times, deprecate both clients and counsel.  As one who has done this for almost four decades, the scene rings as very real for those who want to see what a custody conciliation is like.

In that first scene, Mother portrays Father as explosively violent.  Father seems stoic and yet not.  The conciliator takes it all in and announces a decision will be made.  The bulk of the film is a montage of scenes where the custody order as issued, and as negotiated by the parties afterwards, is played out in real time.  As a lawyer, what makes this film so important is how adult decisions, whether judicial or parental, play out in the facial expressions of Julien. At 11, he is that age where he is growing more and more cagey about managing his parents with each day. Nevertheless, he is still a child and his efforts to change the subject, dissemble or cover for a parent are unmistakable.  Meanwhile, his parents, in their unbridled quest to “win,” pay no heed to his suffering.  I have never been a parent although I have represented hundreds.  You cannot watch this film without observing and recoiling at what Julien’s loving parents are putting him through.

For more than an hour in this 93-minute film, Julien is the pinball. Father’s composure is disintegrating. He has secured time with Julien but has never connected with him. He knows Mother is lying to him about her whereabouts and he does not hesitate to demonstrate to his son that he knows that Julien and his Mother are liars. On this subject, he is right. So he uses Julien to inflict pain on his Mother, and he feels justified in doing so because Julien is conspiring with his Mother. As lawyers, this is a common thing to see. With few exceptions children in the primary custody of one parent will inevitably tilt the scales toward the parent who has them 80% of the time. Kids may be uneducated and naïve. They are not stupid.

The closing scene is as dramatic as it is troubling. I actually don’t commend watching it because, in a sense, it is what you hope won’t happen.  To me, the scene in this movie that I found most compelling is one where Father brings Julien home to Mother.  It has been another bad weekend and it would appear that Father is gaining insight into the entire situation. He asks to speak with Mother in person. Julien is there watching this with eyes wide open. Father more or less confesses his frailties. He says he has changed. He never wanted to see things devolve to this point. He reaches out to embrace Mother and, for several moments, with Julien looking on, his parents hold each other. As you study Mother’s face, you cannot be clear whether this is an act to placate the man she has grown to revile or real melancholy over loss of what was once romance, and later family life.  As they part, the viewer hopes that Julien has a life ahead of him with parents who will at least begin to respect each other. Alas, it is not to be.

In custody world, the recurring theme is one of parents who profess to want to spare their children pain. Their sincerity is, in most cases, quite real. However, they cannot avoid their own urges to be the “equal” parent or the “better” parent. The movie notes how “friends and family” can often contribute to these innocent and yet, corrupt, urges. It is very difficult to see, when it is your child, who is in the middle. The merit of this film is that you can watch the conflict on screen as it appears on the face, in the words and the sad expressions of an eleven year old who wants only to be spared.

This is not a light film. It is not something I commend to watch at a time when there are so many other unpleasant things transpiring in our world. But, if you are parent and you find yourself in intense conflict with the Mother or Father of your child, the greatest gift you may give them is to spend an hour watching and feeling life through the eyes of a child whose greatest aspiration is not to be a Nobel laureate or even starting shortstop. A young child’s goal is to have two parents who love him or her enough, to leave their anger or quest for power at the door, when a custody transition or decision is underway.

As I write this, it is sunny and 55 degrees.  Realtors ordinarily would be calling back customers from the weekend open houses.  The market should be not just brisk but frothy.  In many markets, the inventory of housing has been relatively thin.  Thirty-year rates stand at 3.75%.

Unless you are going to bang on the door yourself and the seller wants to ignore the prevailing social distancing regulations, you cannot see a house except online.  That’s a problem.  Like many other things, the market is frozen.  People with jobs aren’t certain if they can keep them.  Lenders are busy disbursing money to businesses.  So good weather, thin inventory and low interest rates are not going to do sellers much good.  Established builders like Toll Brothers and NVR saw their stock decline by 70% between February 20 and March 23.  Most have recovered somewhat and are trading at about 50% of their February highs.  That tells us the investment community thinks there is life in the market.  However, as with so many issues related to the pandemic, the question is when will it release us from its grip and with what consequent damage to the economy.

Unfortunately, I don’t have an answer for that.  Nevertheless, what the real estate community is suggesting is that when the market resumes, there will be demand that is more cautious and there will be a lot of real estate on the market.  There will be the normal sales that are being held back because there really isn’t a functioning market out there today.  Then there will be the distressed sales caused by illness, job losses and other consequences of the pandemic.  It is also not clear what will come of interest rates.  So far, rates have declined, but borrowing pressure from federal, state and local governments as well as businesses would seem to create competition for lent dollars that was not there a few months ago.  Construction lenders are trapped if they have projects underway.  No one closes on half built property.  Meanwhile, the Wall Street Journal is reporting that virtually all commercial projects where there isn’t already a hole in the ground are being deferred while all of us evaluate how the economy will bounce.

To close with an optimistic reminder. The residential market was in the same place in 2008-09 and at that time, the banking industry was on the ventilator.  Leisure markets like Las Vegas and Florida were reeling as owners of a second home raced to dump their property.  Both of those markets recovered.  Then as now, the question becomes when.

March 6 was the Emergency Declaration from the Governor.  March 19 was the stay at home order.  In the meantime, since March 15, a record 1.5 million Pennsylvanians have applied for unemployment.  That’s an average of 300,000 per week in contrast to roughly 10,000 a week before the crisis hit.  With the statewide shut down, the local Domestic Relations offices, which manage child and spousal support have also gone to basic staff only, which means the system is working in slow motion.  Early on we checked to see what payors who had lost their jobs could do to file for modification of support based on unemployment or pay reductions. This is important because under prevailing law, you can’t get a modification for a time period when you did not file for one.  Needless to say, the collection system is still functioning, but if you aren’t getting paid or your compensation has been reduced, you need to file for a reduction.  Until you are granted relief, the account will continue to charge monthly as if no change occurred.

The author does not have his own child support account.  But I am told that if a payor goes to the PA Child Support Program website, the first page of the menu will look like this:

I Would Like To…

If you click on Begin/Resume a Request for Support Services, we are told the menu will allow you to file for modification remotely.  Yes, you could file a hard copy petition.  That might even be preferable.  But, when that petition gets accepted and acted upon is a guess at best.  A successful remote filing should create a record of the fact that you acted promptly. In the end, it would not surprise us that courts will “stretch” the law to provide that if you can show the date you were laid off, furloughed or cut back, that will become the retroactive date for a modification.  Nevertheless, that’s taking a chance because the law on the books today says filing is the only relevant date.

Realize a couple of other things as well. Courts in Southeastern Pennsylvania appear to be extending the shutdown to May 31. This means that everything filed since March 18 is going to be backlogged.  In a phone call with the court today, I was advised that a custody conference that would typically take 5-6 weeks to occur from date of filing may now see a delay of 20 weeks.  If 500,000 Pennsylvanians have had their jobs affected (I include wage modifications) and half of those adults have a support obligation that could signal 100,000 or more support modification petitions.  The system is not ready for this kind of volume and bear in mind that criminal court calendars and true emergencies are already stacking up and they will get priority over more routine claims.

The website says that nothing is official until a pleading is accepted by Domestic Relations. Again, that may be technically accurate but suffice to say the more diligent you are in showing your attentiveness to complying with the prevailing law, the more likely your retro-activity will apply.  It is chancy to simply assume that your layoff notice or reduced paycheck will be sufficient by itself.

Another tidbit you may have read about.  The checks from the government now floating into bank accounts are subject to attachment for overdue child support. So you may be getting more OR less than the amount you think.  There has been controversy about this.  In many states any judgment creditor can try to intercept money put into your bank account. In Pennsylvania the law is much more restrictive.  However, if you owe a pile of back child support, don’t be surprised if some or all of your government grant is taken.  In a world where the goal is to get money into the system, many people are outraged by this.  Yet, those people seem to forget that they were effectively borrowing from support payees when the full support was not remitted.  The money is flowing back into the economy.  It just happens to be flowing through to your former spouse’s account instead of to yours.

Pennsylvania has a host of ways to recover delinquent child support ranging from seizure of bank accounts, gambling winnings, personal injury awards, and the sale proceeds of a home, to intercepting tax refunds, suspending professional, occupational, or recreational licenses. The worst or most consistent offenders will also be thrown in jail.

As reported by Jessica Menton of the USA Today, you can now add interception of the CARES Act stimulus check that list.

People who carry child support arrears can expect to have their CARES Act check garnished completely or in part depending on the amount of arrears. Additionally, a spouse of a party owing child support will also have their check garnished if they file their taxes jointly. This is not surprising considering the appropriately high emphasis on collecting child support and consistent with the Commonwealth’s other efforts.

The CARES act check falls under “income” as it is defined under Pennsylvania’s support guidelines in Rule 1910.16-2(a)(8) so not only will it be garnished to pay child support, but it will also be added to an individual’s income available for support (albeit, it may not have material impact on most support orders, particularly since both parties may receive it). More importantly, it may not sufficiently cover the income loss by a payor who finds themselves furloughed, terminated, or receiving a pay cut, so it is important that they try to address their reduced income with the recipient as early as possible.

Under normal circumstances, a party experiencing decreased income could petition to modify support and get relief on a timely basis. However, due to the statewide lock-down, Domestic Relations Offices are not operating as normal and modifications are not readily available.  An alternative is to negotiate a modified support order and have your attorney prepare and a support order retroactive to the income loss. If that can be accomplished, the CARES Act check can be treated similar to a bonus and the parties work out what, if any, support should be exchanged out of it. If that cannot be accomplished, the modification will have to occur once the courts reopen.

However it is handled, understanding one’s expectations can help reduce stress during this time. If someone is relying on the CARES check to help buoy them during this time, they should be aware that they may not get it if they owe support; conversely, if someone is owed support, they know that some extra help is on the way.

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Aaron Weems is a partner in Fox Rothschild’s Blue Bell, Pennsylvania office and practices throughout the greater Philadelphia region. Aaron can be reached at 610-397-7989; aweems@foxrothschild.com and on Twitter @AaronWeemsAtty.

It’s not really an important case.  And it’s not a precedential case.  Yet, I couldn’t resist offering a summary because of the names involved.  The legal community has been struggling with the issue of keeping names of parents and children out of case reports.  As we have written, there is policy reason in favor of it.  However, at minimum, it is profoundly awkward.  The April 13, 2020 decision of the Superior Court presents itself as Exhibit “A.”  It’s the ruling in a relocation case; K.W. v. K.W. 1292 WDA 2019.  You’ll never guess which party prevailed, right?

The good news is that this is a heterosexual parenting dispute so we can resort to terms like father and mother.  But, we live in an age where we could easily have same sex parents and a child who might also share the same initials at the parents.

The case involves a relocation dispute over a child approaching age eight (8).  Mother decided that she wanted to relocate from Fayette County, Pennsylvania to North Dakota.  Father responded with a complaint seeking primary physical custody, which incorporated a request to prevent removal of the child (D.W.).  The trial court held three days of hearing over the course of six months.  Before presenting her case for relocation in response to the primary custody complaint, mother upped the ante by marrying the man she was dating in North Dakota.

During the cross examination of mother, she was confronted with an “ultimate issue” question.  “If relocation should be denied, do you intend to move to North Dakota without the child?”  This question itself produces debate among those of us who try custody cases.  Is it a fair question?  Is it technically a relevant question in a world where the declarant is not bound by that testimony? In this case, mother’s reply was the best a witness can provide.  She did not know what she would do and hoped that she did not confront that dilemma.  Not satisfied with that answer, mother amended to say that she would remain in Pennsylvania.

Father also equivocated.  As often happens, his surprise prompted him to file for primary custody but on cross-examination he acknowledged that if relocation was denied a shared physical custody arrangement would be acceptable.

The testimony concluded on July 30, 2019, and the trial court ruled a few days later, denying relocation and awarding shared legal and physical custody.  Mother appealed noting that while the trial court’s order did provide an analysis of the custody factors, it did not present an analysis of the relocation factors under 23 Pa. C.S. 5328(a).

The trial court opinion, took advantage of mother’s revised testimony.  If relocation was denied, mother said she would stay in Pennsylvania.  Thus, the trial court reasoned, until she moved to North Dakota, her testimony had rendered her claim moot.  In an analysis that might be too clever, the trial court noted that mother’s choice to move to North Dakota would not impair father’s ability to exercise his custodial rights, only mother’s.  That would seem to be a twist of the factors under 23 Pa.C.S. 5337.

Mother properly noted that she had expressly filed to relocate and that the “ultimate issue” question of “What would you do if?” should not be treated as abandonment of that otherwise valid request.  Father followed the trial court’s lead indicating that her testimony of willingness to remain in Pennsylvania was a “waiver” of her right to a relocation analysis.

The Superior Court panel reversed, indicating that the equivocation over the response to an adverse ruling was not a basis to avoid the relocation analysis under Section 5337.  Mother’s presentation about a more lucrative North Dakota job offer and an “intact” family with her new husband and his children merited consideration and analysis.  There was also testimony concerning the abilities of North Dakota schools to address the child’s developmental issues.

As noted at the outset, this decision to reverse and remand comes as no surprise.  Nevertheless, the record in this case demonstrates what a difficult set of decisions every trial court faces.  The parents in this case had a child after one year of marriage and separated after six years of marriage when the child was just over five.  Mother met someone new and sought to relocate to be with that person in North Dakota 11 months after separating from the father.  The record is unclear how much time mother and her boyfriend spent together before they married, but it probably did not include much more than summer vacation.  To add to the confusion for a young child, it appears that mother and father may have been living in the same household for more than a year after separation and while this litigation was progressing.  (Opinion p. 2).  There is the prospect (we are told) of a better job in North Dakota and better school resources.  But, how is a trial judge to evaluate that?  We have a child who has ADHD and Asperger’s whose parents are still living together even though mom has just remarried three weeks before the trial ended.

I don’t question either party’s motivations.  We have a mother who testified that her future and her heart are in North Dakota.  But in my own history of these cases, I have often wondered whether a parent is in a rebound rather than a sustainable relationship.  I have wondered whether the job and the schools 1,300 miles away are as represented.  If I am the judge and hearing the relocation, if I grant the request, I have to engage in a leap of faith that all will turn out substantially as represented.  Certainly, there are those cases where the rancor between parents is such that a need for geographical separation is clear.  But the reason why relocations are less and less favored is because the devil you know seems more manageable than the devil you don’t.

These are challenging questions for the most gifted jurist.  The consequence falls upon a child who today is eight and who has lived in uncertain times for at least a third of his or her life.

We’re written about the impact that the coronavirus has had on custody cases and the limited availability of the court’s during this time. A recent story from Florida highlights the impact the virus has on “routine” custody cases where a party is employed as an essential employee and in a high risk environment. In this case, it is an ER doctor in Florida – a “front line” fighter of the virus – whose ex-husband obtained an emergency custody order granting him sole physical custody during the pandemic.

This case exemplifies the tension I described in a previous post between a conservative approach by one parent (Father wishing to limit potential contact to the virus through Mother’s potential exposure in a high risk environment) and the other parent’s approach to recognizing the risk, but taking appropriate precautions (Mother stating he wears personal protection equipment above the standard and being hyper vigilant about her risks).

In the end, there is not a “correct” answer to this issue and Father’s attorney rightfully points out that this case sets no precedence and is limited to the particular circumstances of this case. He also states that Mother will get make-up time for any time she misses and that this action was not designed to be punitive. For her part, Mother understandably feels penalized for simply doing her job and the decision being based on a risk assessment rather than actual exposure. I am sure make-up time means little to her in the short-term when it means not being able to be with her children.

It is possible in these cases for both parties to be “right” and the Court’s decision ultimately being based on how the child’s best interests are served under these facts in this moment in time. This article is an important reminder that cases like this are happening across the country and will continue to do so for the foreseeable future.

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Update:

Since this post was published, the Third Circuit Court of Appeals for Florida stayed the trial court’s order suspending the ER doctor’s custodial time. The doctor can now resume her normal custodial arrangement, though it sounds the parties custody dispute may last longer than the virus.

Experienced family lawyers know that they often become a kind of general counsel to their clients. Family law is in no small measure closely related to contract law. In a state that has seen a shut down order issued for all but essential services, there are many contracts, which have been rendered impractical or frustrated by events.  The legal term for this is taken from the French; “force majeure.”  Clients who paid handsome tuitions and shipped their kids to college in January are watching them trickle back.  Clients with seashore homes on the coast are being told or asked to stay away. Season ticket holders for hockey and basketball are notified that it is “Game off” for the moment.  Many are parties to property settlement agreements that require properties to be sold, refinanced or payments to be made based upon normal conditions. These are scarcely normal conditions.

When is an agreement unenforceable?  There is no easy answer and lawyers are combing through sections of law books that still have bookmarks in them from early 2009 when they were last examined.  Among those cases is Krell v. Henry, decided in 1903 in England.  Henry rented a house on the parade route to be followed by Edward, VII for his coronation.  Unfortunately, the parade was cancelled because Edward developed appendicitis. When Krell sued Henry for the rental fee Henry responded his purpose was frustrated and no rent was due.  The King’s Bench Court ruled that no rent was due as the rental was for a coronation parade that never occurred.

Of course, parties can allocate foreseeable risk in the agreements they form.  Nonetheless, we have not had this kind of pandemic in 100 years.  Today there are Pennsylvania cases which discuss these issues including Greenfield v. Korlea, 380 A.2d 758 (Pa. 1977) and Davis v. Borough of Montrose.  These involve much more foreseeable events, specifically fire and mold.  A similar case involving a frustrated permit to build a dam is found in Hart v. Arnold, 884 A. 2d. 316 (Pa. Super. 2005).  The law in this area is based in large part on the 1981 Restatement (2d) on Contracts.

At Section 261:

 Discharge by Supervening Impracticability Section 261

Where, after a contract is made, a party’s performance is made impracticable without his fault by the occurrence of an event the non-occurrence of which was a basic assumption, on which the contract was made, his duty to render that performance is discharged, unless the language or the circumstances indicate the contrary.

And at Section 265:

Discharge by Supervening Frustration Section 265

Where, after a contract is made, a party’s principal purpose is substantially frustrated without his fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made, his remaining duties to render performance are discharged, unless the language or the circumstances indicate the contrary.

The general rule is that courts are chary to set aside agreements where there are less drastic remedies. Nevertheless, remedies are in the eyes of the beholders until a judge decides otherwise and with courts largely closed except for emergent cases, there will be plenty to fight about.

Every business lawyer in America is reviewing his or her local cases interpreting these contract rules.  Family law is contract law and our approach should be the same.