Get Divorced. Get Rich. The Continental Airlines Sham Divorce Case.

In a recent federal court case, a federal judge dismissed Continental Airlines’ lawsuit against 9 of its employees alleging in essence that the employees faked their divorces so that they could loot the pension plan by obtaining early lump sum retirement benefits.

According to the Houston Chronicle, Continental argued in pleadings before the Court that the defendant employees got divorced, collected their pensions and then remarried their spouses in order to collect the money in lump sums while they were still working.

The Continental pension plan, governed by federal law, allows pre-retirement payments to former spouses. Once divorced, the pilots' ex-spouses used this provision to collect lump-sum distributions of the pilots' pension plans, worth up to $900,000 per pilot. In its lawsuit, Continental called the divorces “subterfuges or sham transactions.”

In dismissing the Continental lawsuit against the employees, U.S. District Judge Gary Miller seems to acknowledge the sham. The Associated Press story quotes Judge Miller as saying: "the facts show, and the pilots do not seem to contest, that the pilots and their former spouses did not behave in a manner consistent with the breakup of a marriage." He said many of the pilots continued to cohabitate, remarried soon after obtaining the lump-sum payout and all essentially conducted themselves as if the divorce had never happened.”

Yet, Judge Miller found that Continental’s pension administrator has no right to consider the legitimacy of a divorce in deciding whether to distribute benefits. He said "the administrator may not refuse to qualify a domestic relations order based on criteria not present in the statute." The judge added that "the court finds that the motivation or good faith of the divorce and resulting domestic relations order is not an enumerated requirement."

Apparently Continental is considering an appeal. The case is of interest on a number of levels. Many familiar with this case have no sympathy for Continental. After all, Continent along with other airlines dumped their pension plans onto the Federal Pension Benefit Guaranty Corporation 4-5 years ago; thus, paying out far less than they should. Yet, the case is about more than those who may have been wronged by Continental for dumping its pension plan on the guaranty fund.

Our country has far too few pension plans these days. If employees can loot their pension plans because of a technicality, i.e., that pension plan administrators have no authority to review the legitimacy of someone’s divorce, those few people lucky enough to have a pension, are put in further jeopardy –beyond the jeopardy of bankrupt businesses that pass pension obligations to the guaranty fund.

Surely our legal system has the ability to stop shams.

Written by Carol L. Gasper, Attorney at Law, clg@clgasperlaw.com

Are You Really Married? What If You Were Not?

Oh no! Recently a Western Pennsylvania couple found out that 49 years of marital bliss was a fairy tale. The clergy member who performed the wedding ceremony simply did not file the marriage certificate with the Court. When, 49 years later, the happy couple went to apply for pension benefits they could not produce the marriage certificate.

While the couple sorts this out in Pennsylvania, I began to wonder what would happen in Ohio if a marriage certificate went missing or the validity of it questioned.

For years and years, Ohio recognized common law marriage, where no marriage certificate was required to deem a couple officially and legally married. If you held yourself out as a married couple, lived together and acted like a married couple, you were deemed married. That all changed in 1991 when Ohio's legislature determined that it would no longer recognize common law. Not to worry... If you were married before 1991 and don't have a marriage certificate, an Ohio probate court will be able to determine the validity of your common law marriage, looking to establish that you did, in fact, hold yourself out as a married couple.

After 1991, Ohio requires that your marriage be "solemnized" or officially performed by someone recognized by Ohio law as being authorized to marry people. In Ohio, judges of the county courts, municipal courts and probate courts may perform the marriage ceremony without any special license; however, ministers do need to be licensed. If you get married before a judge or a licensed minister, your marriage is presumed to be valid.

Within 30 days of the marriage ceremony, the minister or judge who solemnized the marriage is required to file the marriage certificate with the probate court of the county in which the ceremony occurred. If the marriage certificate is not timely filed, the minister or judge performing the ceremony is subject to a fine. If the marriage certificate is missing or lost, Ohio courts would seem to allow those who witnessed the ceremony to give an eyewitness account (Yes! I saw Sally and Tom get married and exchange the I dos!).

What if your minister did not obtain the license necessary to perform the ceremony? Looks like Ohio will uphold the marriage unless public policy is violated. In the case of Dodrill v. Dodrill, N.E.2d, 2004 WL 938476 (Ohio App. 4 Dist.), 2004 -Ohio- 2225, the Fourth District Court of Appeals upheld as valid a marriage performed by an unlicensed minister, stating that Ohio public policy favors sustaining marriages that are not "incestuous, polygamous, shocking to good morals, unalterably opposed to a well defined public policy, or prohibited.” (citing Mazzolini v. Mazzolini (1958), 168 Ohio St. 357, 358).

In sum, Ohio favors sustaining marriages. A good thing! For additional information, Carol Gasper can be reached at clg@clgasperlaw.com.

Parenting Time and Visitation: Should Ohio Employers be Required to Facilitate?

     Nothing is more precious than the time we spend with our children. Apparently some of Ohio's legislators have taken note.

    Ohio HB 40, introduced in late February of 2009 by State Representative Tom Letson and co-sponsored by 16 other State Representives, would require certain employers with 50 plus employees to allow a parent to exercise court-ordered parenting time without terminating employment, reducing pay, or taking other similar action against the parent.

     If passed, HB 40 would give irresponsible parents just one more way to escape obligation and pass it on to someone else: the employer. Parents have a high degree of control over what the court may order for a visitation schedule. First, the parents can agree on a visitation schedule taking into account each other's employment. Second, even where the mother and father are fighting about visitation, courts work to ensure parents time doesn't conflict with employment. If there is no way around a conflict, divorced parents, like married parents, need to make daycare arrangements.

     Not all family oriented legislation is bad. I contrast this proposed legislation with Family and Medical Leave Act (FMLA) requiring certain employers to provide requiring unpaid leave for the birth or adoption of a child; acquiring a foster child; the serious illness of a child, spouse, or parent; and, the serious illness of the employee. FMLA, in effect since the early nineties, works because it covers serious often unavoidable circumstances where time away from work is required.

     According to the Ohio Chamber of Commerce, which opposes the legislation, the Ohio Judiciary Committee "heard proponent testimony from two unions. Throughout the testimony several committee members on both sides of the isle raised concerns about the bill. The following concerns were raised about the effect of such legislation: 1) the prohibition of reducing pay for a parent who takes time off and does not complete a full work week, 2) situations under the bill where the only employees working on Saturdays would be those who were not divorced, 3) providing such a benefit to those divorced employees with children at the expense of other employees, 4) the lack of labor organizations negotiating such parenting-time provisions into labor contracts, and 5) the fact that no other state has enacted a similar proposal."

     The concerns raised by committee members are well-founded.  Why does Ohio want to be the first state with legislation that, in effect, benefits divorced employees at the expense of others? Hard to understand what is truly motivating this legislation.  Note to the sponsors of HB 40: parents, not employers, need to be responsbile for parenting time schedules.

Grandparents Caring for Grandchildren without the Custody Battle: Ohio’s Caretaker Power of Attorney

        U.S. census figures indicate that some 6.7 million children in the United States are being raised by grandparents and other relatives. That's roughly one in 12 children, about 10 times the number of children in the U.S. foster care system. Often, grandparents are raising their grandchildren without having any legal custody, making it difficult for them to access services of any kind. Grand families, a term referring to situations where children are being raised by grandparents or other relatives, exist for many reasons, often because the parent(s) face a temporary crisis, such as a serious illness, financial problem, or lack of housing.

    
       In 2004, the Ohio Legislature addressed this problem by creating the caretaker power of attorney through which parents consent to the grandparent having parental rights and responsibilities for the children on a temporary basis. This parental consent to the grandparent(s) care allows the children to have access to educational and medical services which, in the past, might have been denied absent an order granting the grandparent legal custody, an expensive and emotional proposition. By providing legal documentation to the grandparent caregiver who has consent of parents, the power of attorney eliminates expensive legal custody battles and/or children services intervention.

       The Ohio caretaker power of attorney currently may be used only to allow grandparents to have parental rights and responsibilities; it does not cover any other relative or other third party who may be providing for children. However, the Ohio Legislature is considering expanding the power of attorney to allow other third parties, beyond grandparents, to act as caretakers. See 2009  Ohio HB 197, introduced in the Ohio House of Representatives in May, 2009.

       Intended to cover only temporary situations where parents are unable to care for their children, the power of attorney cannot be effective for longer than a one year period. The power of attorney may grant the grandparent the custodial parent’s rights and responsibilities regarding the care, physical custody, and control of the child, including the ability to enroll the child in school, receive information from the school, consent to school related matters and medical treatment. Notably, the power of attorney does not act as a grant of legal custody to the grandparent nor does it affect the rights of the parent in any future legal proceedings.

       The Ohio statute governing caretaker powers of attorney prescribes the form and content that must be used as well as specific notices that must be given. In most situations, the power of attorney must be signed by both parents. It must be filed with the juvenile court where the grandparent resides within 5 days of its creation.

       No court hearing is required to make the caretaker power of attorney effective, provided that it is the first power of attorney. Should subsequent powers of attorney be filed, the court is required to schedule a hearing no later than 10 days after filing.

      The Ohio Legislature’s creation of the grandparent caretaker power of attorney provides a cost effective way for grandparents to care for grandchildren in situations where parents are temporarily unable to do so and consent to the arrangement. I urge the Ohio Legislature to adopt 2009 Ohio HB 197 to expand the power of attorney beyond grandparents so that others caring for children may have an easier time getting access to education and medical services.

       For more information contact Carol L. Gasper at clgasper@msn.com

Terminating the Ohio Marriage: Divorce and Dissolution Overview

A Hudson, Ohio client met with me recently to discuss the possible termination of her marriage. While we would like to believe that the marriage contract lasts forever, more than fifty percent (50%) of all marriages will terminate before forever. In Ohio, Divorce and Dissolution are two separate legal actions by which the marital contract is terminated. The key difference between the two processes is that with divorce, there is heavy court involvement because the court system is used to resolve all issues relating to the termination of the marriage perhaps because you and your spouse cannot reach agreement on any number of issues, from how marital property will be divided to how parenting of the children will be arranged. With dissolution, the net result is the same, i.e., termination of the marriage, but there is much less court involvement than divorce because the husband and wife agree upfront on how issues will be resolved and simply petition the court to approve their agreement. Big difference.

As War of the Roses illustrates, divorces can be nasty, costly affairs, with couples fighting in high drama fashion about how the assets will be divided or, worse, fights about who will have custody of the children. These fights are usually presented to the court by way of legal filings and hearings ….think expensive lawyer fees. In addition, think long protracted court case. The typical divorce action takes one year to complete.

Dissolution is neither nasty nor costly. Step one in dissolution process is for you and your spouse to reach agreement on property division, parenting issues, and whether and to what extent spousal support will be provided. This agreement, the separation agreement, is then presented to the court with the Petition for Dissolution. Step two in the dissolution process is a hearing before the court scheduled no earlier than 30 days and no later than 90 days after the filing. The dissolution hearing is a very quick affair in which the court reviews the dissolution petition and separation agreement with the parties, assuring that it is, in fact, the agreement that was intended.

When you have decided to move on and terminate your marriage, it is a sad affair. You can make it less painful in terms of costs and time, by choosing the dissolution route. There are, however, many situations in which dissolution is not an option, perhaps because one party is simply unreasonable and wants the other party to enter into a lopsided agreement. Consult an attorney to explore these and other options.

Carol L. Gasper can be reached at (330) 425-1599.