A couple weeks ago this writer was asked to sit on a panel discussing the future of family law almost forty years after the no-fault and equitable distribution schemes were adopted and the federal government began promoting guideline based child support. One of the concerns I expressed to the Family Law Section of the state bar association was that support cases were taking too long to decide and costing too much to manage by conventional trial. At that time, the immediate poster child for my argument was Hanrahan v. Bakker, a high-income case that took years to resolve. During the interim, husband’s income boomeranged from $1 million to $15 million per annum.
Well, a new poster child emerged last week with some very ugly facts. Morgan v. Morgan is a decade long odyssey that launched in neighboring Maryland and then ambled into southwestern Pennsylvania. After almost 20 years of marriage, the parties formed an agreement in 2003 by which husband committed to pay $60,000 a year in alimony until 2007 at which point the alimony would be subject to modification. His separation income was reported as $144,000. As the modification date approached husband filed the decree and a petition to modify in Franklin County and asked that the alimony be cut to $1,000. Former wife responded with a petition to increase. The Pennsylvania Court heard the case and granted the reduction to $1,000. In late 2007. Wife appealed and secured a remand that insisted on a record showing a change in circumstances and an analysis of the alimony factors (curiously) under the Pennsylvania alimony statute. Recall, this is a Maryland divorce.
The Trial Court re-opened the record and held a hearing based on the remand, again deciding in December 2011 that $1,000 a month was the number warranted on the facts. That decision was also appealed, but while the appeal was pending former wife filed requests for relief in the appellate court based on assertions that her former husband had submitted false tax returns and other income data at the 2011 remand hearing. The Superior Court denied that request and affirmed the second trial court ruling.
Wife then filed a new modification petition in 2012 alleging the fraud that she had brought to the appellate court’s attention on appeal. At that hearing husband stipulated that in 2007, when he sought modification his income was $415,000 and in the ensuring years, it had varied from a low of $340,000 to a high in 2015 of $663,000. The trial court found his misrepresentation of income “despicable” but appears to have decided that the matter was res judicata and not subject to adjustment on the 2012 petition. That ruling came in 2016. Wife appealed a third time, which appears to have been the charm based on what we saw published on July 20 in a published panel decision written by Judge Dubow.
Two issues loom large here. The first and obvious is the modification. The second was the request of wife for attorney’s fees. The husband stipulated to the hourly rate of wife’s counsel and appears to have not contested the amounts. But the trial court awarded only 75% of the amount sought and excluded any services rendered before the fraudulent evidence was brought to the appeals court’s attention.
On the first issue the Dubow opinion states unequivocally that a request to modify alimony is an appeal to the equitable powers of the court and that a party who presents false testimony and corresponding false documentation is not entitled to any form of relief. Accordingly, it dismissed husband’s petition to modify (circa 2007) ab initio. On the counsel fee subject, the court noted that while courts have jurisdiction to decide the reasonableness of fees where they are contested, here they were not. Moreover, as in Krebs v. Krebs, this litigation was initiated based upon false information and merited an award under 42 Pa.C.S. 2503. The Superior Court remanded the case to re-institute the $5,000 monthly award and to modify the counsel fee award to 100% of the amounts stipulated.
Wow. One cannot challenge the justice that appears to be done here. It is every lawyer’s bad dream. False testimony that is believed in the first instance and affirmed by the trial court even after it has been revealed on remand. Worse yet, the appellant appears to catch the lie and try to get the appellate court to stop the train only to see the application to correct or re-open the record denied and the 2007 ruling affirmed. So justice was done and in a concurring statement, two judges observe that the case merits consideration for criminal and disciplinary proceedings. Did we mention that Mr. Morgan is a lawyer?
However, the opinion opens doors just as it seems to be closing them. First this is a modification of a “foreign” (i.e., Maryland) alimony decree. As a matter of law, should not that have been decided employing Maryland alimony law? We can all agree that Maryland is not a state where false evidence is admitted and endorsed but the Superior Court’s first remand demands change in circumstances and review of the Pennsylvania alimony factors. Second, and related, what became of wife’s petition to increase? Husband’s income doubled and tripled from 2007 to 2015. Certainly, that creates an argument for an increase under Maryland law regarding modifications. The remand order says re-instate the $5,000 award but does not address the 2012 petition to increase.
Finally, there is the issue of finality. This may have been where the trial judge was looking when he acknowledge in 2011 that husband’s contact was despicable and the income grossly underrepresented, but he stuck to his $1,000 ruling. Horrible. Wrong. But suppose wife discovered the fraud five years after the alimony terminated. Is there a statute or equitable limitation period or can these claims be brought whenever fraud is discovered and/or asserted. No one likes the idea that the wrongdoer escapes unscathed. Suppose the defendant’s lawyer in a personal injury case sees the plaintiff, playing tennis 3 months after plaintiff secured a million dollar verdict premised upon his testimony of irreversible paraplegia. Can the defendant ask for a re-trial? Would it make a difference if the plaintiff were a regular on the court in the months preceding the trial? Do victims of family law fraud have more enduring claims than victims of civil fraud? Or, more succinctly, is final ever final where fraud is involved?
This essay started on a different topic. So I should circle back and close out that point. This is an eleven year alimony modification proceeding. In Hanrahan v. Bakker, the modification petition for child support was filed in December 2013. The Supreme Court ruled in June 2018 with a remand to the trial court to create a record of expenses related to incomes in 2012. That record will need to encompass at least six years of income and expenses. Folks, unlike asset distribution, these support and alimony cases involves the funds people live on every day. We need to explore more efficient means of getting to a result in an age when income is less regular and more spasmodic.