Dennis A. Lish, CPA CFE
Issues for Collaborative Family Law 14.1
Existing Law & Precendent and Bringing that to the Collaborative Team
I would love to see Collaborative Family Law (CFL) become the norm but people either don’t know about it yet or they aren’t sure if it can do the big jobs. Even some members of our practice groups haven’t played out how various cases that could find itself in a Collaborative engagement. One thing CFL does not do is make new law or even new interpretations of law. It gives the Collaborative Group a chance to get there through logic but the foundation is current litigated decisions and legislative law.
An example, a former case, H was given a building, through his father’s estate,on the Bowery in Manhattan. He didn’t work at another job but he collected the rents, which could have been mailed. He had nothing else to do. In many cases, real estate is non-participating, passive appreciation or passive depreciation non-marital property and its value increases and decreases are usually considered beyond the control of the propertied spouse. Therefore it is not marital. However, in this case, the percentage increases in values of this and other properties on the Bowery, actually exceeded the percentage increases in values seen in the rest of Manhattan. Why?
If you drove down the Bowery you could things changing. I believed that the property on the Bowery did better in value increases than the increases in values in the rest of the city because those who owned those buildings made those properties and the area more inviting and more profitable & more desirable to own. They cleaned it up, inside, outside and, working with the police, they cleaned up the streets. My contention was the cumulative effort or all the property owners in that area made those properties increase in value faster than the values seen in the rest of the City. That would make the increase in value “Marital” rather than “Separate Property”.
My question is how should that be brought up, by the NFP, Neutral Forensic Professional, to the principals and the rest of the Collaborative Group. It’s logical but I could get charged with advocating for the non-propertied spouse? Is that something I bring to the Collaborative Group without the principals? Absolutely! Is this kind of issue that is difficult for Collaborative Family Law? No, not at all because the Collaborative Professionals, the lawyers have to tell their clients what the current law is and where the law and precedent would lead in a Court, if that option were chosen.
Here in Florida there are two cases that give insight to this issue. The Appellate Ct. in Robbie v. Robbie, 654 So.2d 616 (Fla.App. 4 Dist., 1995) reversed the Trial Court that declared that the pre-marital gift to Michael Robbie of 9.5% of the Miami Sports Corporation (MSC) from his father Joe Robbie, Sr., which included ownership of the Miami Dolphins, was separate property, passive appreciated property because Michael wasn’t the driving force behind the valuation increase, his father was. The Appellate Court said, as General Manager, Michael, through his marital efforts, helped increase the value, even if not as much as his father's participation.
In 2000, the Appellate Court declared that the division of that property should be assumed to be equal in distribution unless other factors change that. That was the Court's interpretation of the legislation passed 1993. Robbie v. Robbie, 788 So.2d 290 (Fla. App., 2000). So now that we have that, do we re-litigate that issue each time it comes up and what would that cost? Or can we come to conclusions collaboratively based upon the law and the interpreted decisions. This is why Collaborative Professionals have to be top notch with a great understanding of the law.
Could the Robbies have come to these same conclusions themselves in a Collaborative Divorce? If they did, I’m sure they would have saved a few hundred thousand in fees. This case because of the new interpretations made and with new precedent was burned into the Equitable Distribution Knowledge Base was probably better off litigated. However, all the cases going forward with the same issues, could be better handled collaboratively. Dennis A. Lish, CPA CFE www.LishForensics.com