It’s not unusual for athletes and other professionals who earn huge sums of money for a short period of time to then “burn out.” What becomes interesting is how these people, when involved in divorce or parentage cases, require judges and attorneys to accommodate their enormous salaries (or abilities to earn) and high standards of living, as against reasonable expenses for the children they have brought into the world. Certain patterns have evolved under case law in various states, which suggest strategies that may be employed by the practitioner.
Scope of Discovery: The scope of discovery was central to the case of Johnson v. Superior Court, 77 Cal. Rptr. 2d 624 (Cal. App. 2d 1998), wherein Larry Johnson of the New York Knicks stipulated that he had the ability to pay any amount of support that the court determined to be reasonable. The trial court had prohibited the discovery of his income and assets but permitted discovery on what it called “lifestyle information,” which basically included documents evidencing the amount of monthly living expenses. The California Court of Appeal further limited discovery by issuing a protective order that disallowed the detailed lifestyle information, absent a showing of need for such information. In California, the law is that “where the supporting parent enjoys a lifestyle that far exceeds that of the custodial parent, child support must to some degree reflect the more opulent lifestyle even though this may, as a practical matter, produce a benefit for the custodial parent.” The court held that it could imagine that the child’s needs might be assessed differently depending on whether Mr. Johnson earns $12 million a year, as the mother contended, instead of $1 million a year, as he had contended. In states where child support is based at least in part on percentage guidelines as to income, there will always need to be a disclosure of the income so that a guideline amount can be determined. Certainly, something in between no discovery and total discovery can be agreed on with a proper confidentiality order.
- Support Obligation Dependent On Employment Status. In the case involving former Pittsburgh Steeler Brian Hinkle, Hinkle v. Hinkle, 685 A.2d 175 (Pa. Super. Ct. 1996), the settlement agreement provided that Mr. Hinkle would pay $4,000 per month for any month in which he was employed and being paid as a full-time player in the NFL; for any month he was not so employed, Pennsylvania guidelines would apply. After three years, he retired, and, at the modification hearing, his obligation was set for $2,000 per month for a period of time and thereafter at $835 per month. Both parties appealed, and the order was affirmed. The court assessed him a $1,000-per-month earning capacity, which was supported by the record.
- Piercing the Corporate Veil to Assign Shares Therein to Obligee. An interesting remedy for nonpayment of support was applied in the Illinois case of Geittmann v. Geittmann, 467 N.E.2d 297 (1984). In that case, the trial court directed the husband, an attorney not paying maintenance, to assign to a trustee all of his shares in his professional corporation, with a trustee to make installment payments to the wife from the corporate proceeds, in order to satisfy the order. Affirming, the court held that even though it was a separate corporation, the court could essentially pierce the corporate veil, based on the general rule that a corporation is presumed to be separate and distinct from its shareholders, but subject to the broad exception that separate identities may be disregarded in situations in which it would otherwise pose an obstacle to protection or enforcement of public or private rights. The court noted that a simple wage deduction order would have proved inadequate in this case, because the husband would be in a position to manipulate or avoid the effect of such an order by lowering his own salary.
- Income Averaging. Where the obligor’s income has dropped radically, but the reasons for it are questionable, i.e., the obligor purposely avoided his responsibilities by voluntarily walking away from his employment, courts in Illinois have used income averaging to try and arrive at a reasonable income amount. In In re Marriage of Elies, 618 N.E.2d 934 (1993), three years of income averaging was approved. Due to the availability of income averaging, you should try to obtain tax returns from prior years, even though many judges are only interested in current income. If your state allows for percentage orders, you might consider asking for such an order.
- A “Good Fortune” Award. In an interesting case involving basketball player, Dennis Scott, Finley v. Scott, 707 So. 2d 1112 (Fla. 1998), the trial court had originally ordered $2,000 per month, consistent with the mother’s initial support affidavit, but then awarded an additional $3,000 a month as a “good fortune” award for a very young child. The District Court of Appeal had held that the award should be limited to the amount needed to currently support the child in the appropriate standard of living, and should not provide a fund for future unspecified uses, noting that as the child’s needs increased, a modification would be appropriate. The Supreme Court quashed the decision of the District Court of Appeal and reinstated the additional $3,000 per month “good fortune” award. It was noted that the father earned more than $3 million a year and that a guideline amount would have been $10,000 a month. The additional $3,000-per-month was ordered to be paid to a guardian of the child’s property.
Clearly, different situations require different remedies. Such factors as the stage of the athlete’s or professional’s career and whether he/she is acting responsibly are to be considered. It is an area that will become more muddled as salaries continue to skyrocket.
Paul L. Feinstein, a Chicago practitioner with over four decades of experience, practices family law with an emphasis on divorce litigation, consulting, and appeals. Paul is often hired by trial lawyers to handle appeals and to assist them with determining legal strategies and preserving a sufficient record at trial. He has belonged to the American Academy of Matrimonial Lawyers since 1991 and the Appellate Lawyers Association since 2010. He can be reached at (312) 346-6392. View his Divorce Magazine profile.