A link on How Appealing alerted me to a recent decision of the Minnesota Court of Appeals, finding that a person has a right of privacy from being videotaped while alone in a residential bathroom shared with that person’s spouse. Even married persons can be found guilty of violating privacy laws in that state when they record video of their spouses undressing without their consent.

The defendant in the case admitted that he created videotapes for his own private enjoyment, recording the view from a small hole in the bathroom wall, when he and his wife stopped having sex. He was convicted under Minnesota’s version of a wiretapping law, which criminalized the recording of sounds or events through a window or aperture where a person is likely to expose his or her intimate parts.

In this case, as in so many other cases dealing with illegal wiretapping (which may include secret audio recordings of telephone conversations, secret video recordings, or secret computer monitoring devices or software), the crux of the issue is whether the victim has a reasonable expectation of privacy. Before recording any sounds, videos, or computer or telephone communications, it is extremely important to consider whether the recording may violate federal or state laws.

An issue that befuddles some business owners during the course of their divorce litigation is how to regulate the operation and management of their businesses. In cases where both spouses own interests in the business, they may struggle for control of important business and financial decisions.

Some issues may be resolved under the company’s partnership agreement, shareholders’ agreement, limited liability company (LLC) agreement, or corporate by-laws. Yet, these agreements are often too vague to deal effectively with disputes between divorcing spouses who own businesses together.

Early in the evolution of the Divorce Code, the Superior Court of Pennsylvania authorized the Courts to appoint receivers or trustees to prevent the dissipation of an ongoing business concern. Mayhue v. Mayhue, 485 A.2d 494 (Pa.Super.1984). The Superior Court in Mayhue held that 23 Pa.C.S. § 3505(a) and 23 Pa.C.S. § 3323(f) authorized the Courts to enter an injunction to prevent a spouse from continuing a course of conduct calculated to defeat his wife’s property rights in the business. The Superior Court in Mayhue approved the trustee’s powers to liquidate assets to pay business debts, pay delinquent taxes, and satisfy intercompany debts.

The appointment of a receiver is not practical in every case because the expense of paying a receiver may not be justified. Still, there are some cases in which third party supervision of the business might be the only practical way t0 ensure continued smooth operation of a business caught in the middle.

For each of the past four years, I have been privileged to teach lawyers about the latest developments in child support as one of the hosts of Family Law Update, a satellite broadcast presentation sponsored by the Pennsyvlania Bar Institute. Since I joined the panel in 2005, several important decisions have influenced the direction of Pennsylvania child support law. Here is my summary of the six most important cases (and one change in the law itself) since 2005:

#6 – Reinert v. Reinert, 926 A.2d 539 (Pa.Super.2007). The Superior Court in this case affirmed the continuing viability of the “nurturing parent doctrine,” a policy in which the courts may excuse the mother of a young child from working to contribute toward the support of the child. Prior to this decision, it was established that a mother may refrain from working even to raise the child of a subsequent relationship. Yet, in Reinert, the Superior Court took the policy to its extreme. The Court terminated the support obligation of a mother who did not have custody of her eldest child when she gave birth to twins by a subsequent relationship and elected to stay at home to raise them.

#5 – Murphy v. McDermott, 2009 WL 2365992 (2009). The question of whether a parent must pay private school tuition may be raised in child support proceedings, but it is also a legal custody issue. The problem is: the legal standards to answer that question are different in support and custody proceedings. The Murphy case demonstrates how important “status quo” can be, compelling a parent to pay tuition even if he or she objected at the time when the child was enrolled in private or parochial school. The lesson: parents must get involved in the choice of schooling before the question of paying comes up.

#4 – Berry v. Berry, 2006 Pa.Super. 98 (2006). When child support becomes an issue between divorcing parents, the courts must decide whether certain income sources – such as pensions, rental properties and businesses – should be considered as marital property or income for support purposes. Generally, they cannot be both. In Berry, the Superior Court held that severance pay would be counted as marital property if acquired before separation or income if acquired after separation.

#3 – Estate of Johnson, 970 A.2d 433 (Pa.Super.2009). While this decision might be limited to its unique factual circumstances, the Superior Court certainly affected settlement practice by holding the estate of a deceased parent responsible for the payment of child support. The deceased parent had entered into a marital settlement agreement with his ex-wife, promising to pay child support until the youngest child was 18 years of age. The agreement did not specify whether the obligation would terminate upon the death of a parent, so the court held that it did not. The estate ended up owing nothing, however, because the Social Security derivative benefits received by the child as a result of the parent’s death satisfied the child support obligation. This case has prompted many lawyers to specify death as cause for terminating child support in their agreements, and has also motivated support recipients to demand life insurance as a security device.

#2 – Krebs v. Krebs, 944 A.2d 487 (Pa.Super.2008). The Superior Court fortified its prior admonitions warning support payors to report increases in their income. In cases where a payor fails to report an increase, even an increase not precipitated by a job promotion or change in employers, the court may increase child support retroactively to the date when the income increase occurred, even years later. The Superior Court in Krebs granted such a retroactive increase in child support even after the custodial parent

#1 – The 2010 Amendments to the Pennsylvania Child Support Guidelines. The 2010 amendments eliminated the Melzer formula, which was a budget-based method of calculating child support in high-income cases. The uppermost limits of the child support guidelines have been extended to $30,000 per month combined net income, and an income-based formula has been promulgated to calculate child support in high-income cases.

Pittsburgh ranks #325 and Philadelphia ranks #360 in a recent survey of the wealthiest American cities, conducted by Portfolio.com, a website operated by American Business Journals, publisher of the Pittsburgh Business Times. Allentown ranks #392, Erie ranks 412, and Reading ranks dead last at #420 in the survey.

A quick glance at the statistics cited by the survey reveals serious flaws. In its ranking of Pittsburgh, for instance, the survey lists the population as 297,187. This means that the survey completely overlooked the population of suburban communities like Fox Chapel, Upper St. Clair, Sewickley and Mt. Lebanon. Only City boroughs such as Shadyside and Squirrel Hill were considered in the wealth survey.

Presumably, the Philadelphia survey only included the City of Philadelphia and not the affluent suburban communities in Bucks County, Montgomery County, Chester County, or Southern New Jersey. Again, these flaws would cause one to question the validity of the rankings.

The Portfolio.com survey claims that the median home value was $86,000 and the median household income was $36,709 in Pittsburgh. Yet these statistics only include the City proper. In Sewickley, the 2008 median home value was $169,960 (from city-data.com) and the median household income was $50,414. In Fox Chapel, the 2008 median home value was $574,280 and the medial household income was $187,530. In Upper St. Clair, the median home value was $243,880 and the median household income was $111,502.

It is not possible to understand the economics of Pittsburgh or Philadelphia without considering their suburban communities.

The South Carolina Family Law Blog contains a great list of frequently-overlooked or hidden assets in divorce. Some of the more interesting items are:

1.Frequent flyer mileage
2.Security deposits (e.g., utilities, car lease)
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8.Unused vacation, sick leave
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10.Income tax refunds
11.Income tax capital loss carry-forwards
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24.Burial plots
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30.Cash
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34.Options to purchase property
35.Unpaid commissions on deals set to close
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39.Taxes prepaid

In our area, don’t forget about subsurface mineral rights, another overlooked asset.

What factors inflence a spouse’s eligibility for alimony after divorce under Pennsylvania law?

Under Pennsylvania law, post-divorce alimony “is a secondary remedy . . . available only where economic justice and the reasonable needs of a party cannot be achieved by way of an equitable distribution award and development of an appropriate employable skill.” These are the well-known words of the Superior Court of Pennsylvania in its Opinion in Nemoto v. Nemoto, 620 A.2d 1216 (Pa.Super.1993). Most of the important concepts in alimony jurisprudence are covered in this sentence. First, the trial courts must attempt to divide marital property in a way that avoids the need for post-divorce alimony. Why? Because the courts encourage a complete cessation of financial ties between divorcing spouses. If enough property (particuarly income-generating property) can be conveyed to a divorcing spouse, then that property can fulfill all of the spouse’s economic needs without the financial “umbilical cord” of alimony.

• The value of the assets and liabilities distributed to each of the parties must be considered before awarding alimony. 23 Pa.C.S. § 3701(b)(10), (16); Fee v. Fee, 496 A.2d 793 (Pa.Super. 1985).
• In its determination of alimony, the trial court must consider the income generated by a spouse’s marital and nonmarital assets. Ressler v. Ressler, 644 A.2d 753 (Pa.Super. 1994).

Second, our Courts encourage spouses to maximize their earning capacity and income potential through appropriate employment. In the first decade of the Divorce Code, enacted in 1980, the law provided that alimony could be awarded only for rehabilitative purposes, such as paying for college or vocational training. Alimony was not permitted in Pennsylvania prior to 1980, and the legislators who enacted the  Divorce Code worried that spouses would lose their incentive to become self-supporting if they could easily receive post-divorce alimony. The alimony law has been revised since 1980, allowing alimony for other reasons, such as meeting the budgetary shortfall of a spouse who is incapable of self-support. Still, the old law remains a strong influence among judges and lawyers in Pennsylvania. Several attempts to modernize the alimony law have failed, primarily because they might reduce a spouse’s incentive to go back to work. 23 Pa.C.S. § 3701(b)(1), (9), (17).

• The Court imputed an earning capacity to a dependent spouse who devoted her time to an unproductive start-up business instead of seeking gainful employment. Thomson v. Thomson, 519 A.2d 483 (Pa.Super.1986).
• An award of alimony for ten years was deemed excessive when a college education leading to a self-supporting job would require just four years. Barrett v. Barrett, 614 A.2d 299 (Pa.Super.1992).
• In cases where there is no evidence of an impediment that would prevent a spouse from becoming self-supporting, the court is authorized to limit an alimony award. Adelstein v. Adelstein, 553 A.2d 436 (Pa.Super.1989).
• In cases where a spouse’s earning capacity was limited by a medical disability or the disability of a custodial chid, Soncini v. Soncini, 612 A.2d 998 (Pa.Super.1992), the court may decline to impose a full time earning capacity upon a dependent spouse, justifying an award of alimony.

Finally, the law looks to the reasonable needs of a spouse. After a divorce, each spouse must have sufficient cash flow to meet his/her monthly household expenses. Yet, judges realize that two households cannot exist as cheaply as one combined household. The marital standard of living is just one of the seventeen statutory criteria for alimony awards, and in practice, it is one of the least influential. The expenses associated with custody of a child is more influential in an ex-spouse’s request for alimony. Just as important is the ability of a dependent spouse to become self-supporting through appropriate employment and the financial hardship that alimony may cause to the payor. When determining the amount and duration of an alimony award, the courts scrutinize the budget of a spouse seeking alimony carefully. 23 Pa.C.S. § 3701(b)(7), (8), (13).

• The Court will not allow an award of alimony that would divert twice as much income to the alimony recipient as the payor, which would allow her to enjoy a better standard of living than she had enjoyed during the marriage Ressler v. Ressler, 644 A.2d 753 (Pa.Super.1994).

Marital misconduct is just one of the seventeen factors in awarding alimony, and it has remained one of the least influential since the enactment of the Divorce Code. 23 Pa.C.S. § 3701(b)(14); Nuttal v. Nuttal, 562 A.2d 841 (Pa.Super.1989).

Parents who are paying or receiving child support under the Melzer formula for high-income cases (where the parents’ combined net incomes is over $20,000 per month) should contact their lawyers immediately. The new Pennsylvania child support guidelines (which eliminated the Melzer formula, effective May 1, 2010) will almost certainly result in a child support decrease for most of those high-income cases. Rather than considering the custodial parent’s household budget to determine the proper amount of child support, the new guidelines are income-based at all income levels. The child support guidelines chart has been extended upward to $30,000 per month combined net income. For cases where the parents’ combined income is greater than $30,000 per month, the new guidelines start with a base amount and adds a percentage of the parents’ combined income over $30,000 per month.

So, if nothing but the guidelines have changed, can a parent file a petition for modification? Yes, probably. A new Guideline amount resulting from new or revised support guidelines may constitute a material and substantial change in circumstances.  Pa.R.C.P. 1910.19(a).

Parents whose combined net income is less than $20,000 per month might have grounds for modification if the amount of child support under the new guidelines is materially different from the current support order. At some income levels, the amount of child support has increased. At other income levels, it has decreased. Parents are urged to contact their lawyers to find out whether they are entitled to modification.