The Billion Dollar Divorce

Hamm Divorce CheckHarold Hamm and his ex-wife Sue Ann Arnall have just joined the unenviable ranks of the most expensive divorce settlements in U.S. history, after an Oklahoma court ordered Hamm to pay Arnall nearly a billion dollars as part of a divorce settlement following their 26-year marriage.

Hamm, a self-made Oklahoma oil magnate, is the majority shareholder and CEO of Continental Resources. Forbes credited Hamm with “fueling America’s recovery” and estimated his net worth at more than $18 billion dollars, making him the 24th richest man in the country. Hamm was also named as energy advisor for Mitt Romney’s 2012 presidential campaign.

The Marriage

In 1988, Harold Hamm married his second wife Sue Ann Arnall, a woman a decade his junior. Hamm’s first marriage to wife Judith Ann ended over allegations that he was having an affair with Sue Ann.

At the time, Arnall was a lawyer at Continental and Hamm was just beginning to snap up roughly one million acres of land leases in North Dakota, Montana and parts of Canada in what is known as the Bakken formation. The Bakken turned out to be one of the richest underground oil reserves in the United States.

The Divorce

The secretive nine-week divorce trial focused largely on what exactly led Harold Hamm to discover the Bakken, thereby creating his enormous fortune. Was it shrewd skill and speculative expertise or just dumb luck as Hamm claimed?

Under Oklahoma law, investment growth during marriage can be part of a divorce settlement if made through “active forces” such as skill, work ethic or expertise. If, on the other hand, the growth is attributable to “passive forces”, such as changing economic conditions or circumstances beyond the parties’ control, then it is considered separate property.

Harold and Sue Ann Hamm JEMAL COUNTESS/GETTY

Harold and Sue Ann Hamm
JEMAL COUNTESS/GETTY

In November 2014, the Oklahoma court found that Hamm’s skills, efforts and leadership, touted for years in Continental’s SEC filings, were responsible for the couples’ growth in marital fortune. However, the court estimated the couples’ marital estate at only $2 billion, not the $18 billion touted in Forbes. Certain assets, such as Orbit Gas Storage, were valued at zero in the ruling. See a full copy of the memorandum order here.

The court awarded Arnall half of the marital estate, including a $17.4 million ranch in Carmel Valley, CA and an equalization payment of nearly $1 billion in cash.  However, Arnell plans to appeal the ruling, claiming the court considered only a fraction of the couples’ multi-billion dollar estate.

Hamm pledged nearly 20% of his Continental stock in order to quickly write a check that would stop interest from accruing during Arnall’s appeal. Arnall deposited the check in January 2015, but still plans to proceed with an appeal.

The Appeal

Hamm’s attorney claims that Arnall’s acceptance of the check ends her case, since she has “accepted the benefits of the ruling”. Arnall, however, argues that accepting the money on the table is the only intelligent thing to do while she awaits appeal.

Interviewed by People, Arnell said “The court’s rulings on Tuesday left me in a position where I would receive no distributions of the marital estate during the appeal, which could last numerous years, and would be required to ‘show need’ in order to obtain temporary support.”

She added, “I believe it is unfair that any woman’s property be controlled by a former husband. During our 26-year marriage, and during the nearly three years this case has been pending, Hamm has had complete control and full use of the assets we built together, while I have patiently waited for access. I was simply not willing to wait several more years while the appeal is pending.”

Lisa L. Fiance, Esq.

Lisa L. Fiance, Esq. is a California family law attorney, divorce mediator, and the owner of Epiphany ADR. The information contained in this article is intended as general information and does not constitute legal or tax advice.

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The Basis of the Child Support Obligation

Mutual Duty of Child Support

A parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life.  Under California law, this means:

  1. Both parents are mutually responsible for the support of their children.  The custodial parent is presumed to contribute some level of child support by providing a home and care for the child.
  2. Each parent should pay child support according to his or her ability.
  3. Children should share in the standard of living of both parents. Child support may therefore improve the standard of living of the custodial parent in order to improve the lives of the children.
  4. The financial needs of the children should be met through private financial resources (versus public assistance) as much as possible.

No Waivers

Child support is vastly different from spousal support.  In divorce mediation, parties can agree to waive spousal support or limit the court’s ability to decide issues involving spousal support. There are no such waivers where child support is involved.

No Waiver of Child Support

The right to child support lies exclusively with the child, independent of the parental relationship or any agreement between the parents. Therefore, unlike property and spousal support provisions, parents cannot contract away child support provisions without taking the proper legal actions.  Also, a custodial parent cannot deny the other parent’s visitation solely for the reason of unpaid child support.

No Waiver of Court Jurisdiction

In contrast to spousal support, parties may not limit the court’s jurisdiction over child support.  In California, the court must retain jurisdiction to set child support. Even if the custodial parent does not request child support from the other parent, the local child support agency (DCSS in California) may pursue a case for child support on the child’s behalf anytime public assistance is requested.


Lisa L. Fiance, Esq.Lisa L. Fiance, Esq. is a family law attorney, divorce mediator, and the owner of Epiphany ADR in beautiful Oceanside, CA.  The information contained in this article is intended as general information and does not constitute legal advice.  If you have legal questions about child support, you should consult with legal counsel in the state in which you reside.


 

9 Ways to Reduce the Cost of Your Divorce

Divorce is never an easy or pleasant process.  However, these tips can help you minimize the time, conflict and cost associated with the divorce process.

1.    Decide Which of You Will Be the Petitioner

The divorce process officially begins when one of you files a Petition for Dissolution with the Court.  This does not have to be an adversarial process.  California is a no-fault state, which means that there are no legal penalties based on which spouse “caused” the divorce.  Therefore, almost all California divorces are filed based simply on “irreconcilable differences”.

If you have not already served your spouse, or been served with papers yourself, the two of you have an opportunity to decide which of you will initiate the process.  Often, the spouse who feels more strongly that divorce is appropriate prefers to be the petitioner.  Some lawyers feel there is an advantage to being either the petitioner or the respondent, so it wise to seek legal advice before taking any actions.

2.    Be Open to Divorce Mediation

Prior to filing, you should decide if you will try divorce mediation.  If you have been able to discuss issues openly and reasonably in the past then, even if neither of you agree on any of the issues at hand, divorce mediation may be a good option for you.  If there are significant imbalances of power, or if domestic violence or child abuse are involved, then you probably need the representation of a family law attorney.

3.    Agree On Your Date of Separation

Your date of separation is determined by the day that you physically separated and one of you decided that the marriage was “irretrievably broken”.  You did not have to both agree at the time one of you made this final decision.  While couples may separate and then work things out several times, there can only be one legal date of separation.  Your date of separation affects many features of your divorce, including the characterization of your property and earnings and spousal support.

4.    Seek Independent Legal Advice

Even if you agree on most issues and want to avoid legal proceedings as much as possible, it is important that you discuss your options with a family lawyer or divorce attorney.  Some lawyers offer free consultations, while others charge an hourly rate.  Even if it costs each of you a few hundred dollars, it is worth the money to understand the presumptions of California community property law, your options regarding custody and visitation, and your rights and obligations concerning child and spousal support.

Certain lawyers use a process called collaborative divorce, in which they will advise you of your rights while also trying to work cooperatively with the other side to reach agreement outside of court.  Collaborative divorce can also involve other professionals, such as child specialists and divorce coaches, and additional written agreements to encourage fair and civil negotiation of the issues.

5.    The More You Can Participate and Agree, the More You Will Save

Ironically, at the same time you are divorcing based on irreconcilable differences, the more you can agree on issues and participate cooperatively in your own divorce, the more money each spouse can save.  It is possible to complete an uncontested divorce by representing yourselves “in pro per” (without a lawyer).  However, the process and forms required (see below) can be complicated.  You must be willing to research self-help resources, complete required forms, and file the forms by certain deadlines.

6.    Discuss Ideas for Property Division

Divorce attorneys typically approach issues of custody, support and attorney fees in that order.  Divorce mediation uses a different approach. Typically, property division is addressed first so that spouses will know what they each have to work with.

In divorce mediation and collaborative divorce, spouses can make their own decisions as to what constitutes “fair division” of the marital property.  Spouses who work cooperatively may be able to avoid the sale of their home and the division of other valuable assets such as 401(k) and pension plans.

7.    Work Together to Create a Parenting Plan

Next, try to change your mind frame from being “spouses” to being “parents”.  Children benefit when parents can communicate and work cooperatively in their best interests.  A successful parenting plan will have a regular schedule, an exception schedule, a holiday schedule, a communication plan, and other agreements that will reduce the chance of future conflict.

8.    Mediate Reasonable Support

Court awards of child support or spousal support are often the biggest point of contention in a litigated divorce. These issues can result in thousands of dollars in legal fees, and sometimes both spouses are still unhappy with the court’s decision.

In California, child support is based on a statewide “guideline”.  A family lawyer or divorce mediator can run the complicated equation that determines an estimate of what the court will award.  In divorce mediation and collaborative divorce, you can use the guideline as a starting point, but you can also agree to add other exceptional factors into your child support agreement.

Determining “reasonable” spousal support can get a bit trickier.  Temporary spousal support is based primarily on each party’s last twelve months of income.  However, when determining permanent spousal support, the court considers additional factors, including:

  • The earning capacity of each spouse;
  • Contributions to education, training or licensing of the high earner spouse;
  • The length of marriage;
  • The marital standard of living;
  • The age, health and work history of each spouse;
  • The need and ability to pay support;
  • The need to finish raising minor children;
  • The goal that the supported spouse be self-supporting within a reasonable time;
  • The obligations and assets, including separate property, of each spouse;
  • The immediate and specific tax consequences to either spouse;
  • Any history of domestic violence; and
  • “Other factors” the court deems appropriate.

Spouses using divorce mediation or collaborative divorce can agree to waive spousal support in consideration for other terms, determine regular payments for a set duration, or agree to a single lump sum payment consisting of cash or property.

9.    Assist in Forms Preparation

Much of the California divorce process uses Judicial Council forms.  However, knowing which forms are required and filing them at the right times can be confusing.  You can reduce the cost of your divorce if both spouses are forthcoming with information and timely with forms preparation.  You should also both be familiar with the dissolution process.  A self-help overview of the divorce process is typically provided at each county superior court’s website.


Lisa L. Fiance, Esq.

Lisa L. Fiance, Esq. is a California family lawyer and divorce mediator and the owner of Epiphany ADR. The information contained in this article is intended as general information and does not constitute legal advice.  If you are considering divorce, you and your prospective spouse should consult with independent legal counsel in the state whose laws you want to govern your agreement.


 

California Guideline Child Support

California courts determine child support according to a complicated but standardized “guideline” formula found in Family Code § 4055.

Principles of Guideline Child Support

California guideline seeks to encourage fair and efficient settlements of conflicts between parents and seeks to minimize the need for litigation. In implementing the statewide uniform guideline, the Court must adhere to the following principles:

  • Guideline seeks to place the interests of children as the top priority.
  • Guideline child support is presumptively correct. Only under special circumstances should child support fall below the guideline However, the presumption is rebuttable in some rare cases.
  • Child support orders must ensure that children actually receive fair, timely, and sufficient support reflecting the high standard of living and child raising costs in California.

California Guideline Factors

California guideline child support considers several factors, including:

  • Custodial Timeshare: Custodial timeshare is the amount of time the child spends with each parent. Whether parents share joint custody or one parent has “sole” physical custody, there is typically some custodial timeshare percentage that applies based on visitation.
  • Annual gross income: Gross income includes income from ALL sources, including but not limited to: wages, salaries, bonuses, commissions, royalties, rents, dividends, pensions, interest, trust income, annuities, workers’ compensation, unemployment, disability, social security and spousal support from another marriage.
  • Earning capacity: If one parent is unemployed, the court MAY consider that parent’s earning capacity in lieu of actual income. The court does this in the best interest of the children, so that neither parent can voluntarily avoid employment. If earning capacity is imputed to the custodial parent, however, the supporting parent generally must contribute to childcare costs.
  • Tax Factors: Gross income is reduced by actual tax liability, as determined by the guideline calculation software. Tax liability is based on each parent’s tax filing status, number of exemptions and qualifying deductions, and may differ from the amount withheld from paycheck withholding.
  • Allowable child support deductions: Each parent is allowed deductions for state and federal income tax liability, FICA, mandatory union dues, mandatory retirement contributions, pre-tax health insurance premiums for the parent and child, any child support or spousal support already being paid, necessary job-related expenses, and certain California adjustments to income. Further deductions, known as “hardships”, may be available for extraordinary medical expenses or catastrophic losses.

Child Support Add-Ons

Certain other expenses are considered child support “add-ons”. Some expenses are mandatory child support add-ons, meaning that the court must include them in guideline child support if the expenses exist. These expenses include childcare costs related to employment or reasonably necessary job training and reasonable uninsured health care costs for the children. Other child support add-ons are at the court’s discretion. These include costs related to “special” needs or education of the children and travel expenses for visitation.


 

Lisa L. Fiance, Esq.Lisa L. Fiance, Esq. is a family law attorney, divorce mediator, and the owner of Epiphany ADR in beautiful Oceanside, CA. The information contained in this article is intended as general information and does not constitute legal advice. If you have legal questions about child support, you should consult with legal counsel in the state in which you reside.


 

The Affordable Care Act and Joint Custody

The Affordable Care Act brings important changes to parents with respect to obtaining health care coverage for themselves and their children.  These changes are especially important to parents who share joint custody.

Individual Mandate

Beginning in 2014, all individuals are required to carry minimum essential health coverage for themselves and their “dependents”.  The parent who claims the exemption for the child on the tax return has the “dependent”, not necessarily the custodial parent.  Failure to provide such coverage may subject the parent claiming the exemption to a penalty when filing their taxes.

Tax Penalty

The penalty for not maintaining sufficient coverage is:

  • 2014:   $95 per adult or 1% of yearly household income, whichever is greater
  • 2015:  $325 per adult or 2% of yearly household income, whichever is greater
  • 2016:  $695 per adult or 2.5% of yearly household income, whichever is greater

The additional penalty for an uninsured child under age 18 is half of the penalty for an uninsured adult.

Exemptions

Exemption from the penalty may be available to individuals:

  • With religious exemptions;
  • Who are incarcerated;
  • Who are not situated in the United States;
  • For whom coverage exceeds 8% (in 2014) of their household income;
  • With income below the tax filing threshold:
  • Who are members of Indian tribes;
  • With short coverage gaps (less than 3 months); or
  • Experiencing qualifying hardships with respect to the capability to obtain coverage under a qualified health plan.

Impact

What do these Affordable Care Act changes mean for parents who share joint custody?   It means communication and cooperation are even more important to co-parenting than they were before.

Many parents who share joint custody also share the tax exemption.  Parents sometimes alternate who will claim the exemption each year.  Sometimes they split exemptions for multiple children.  However, it’s very uncommon for parents to alternate who will provide health care coverage for the children from year to year.

Therefore, it now becomes critical that parents share proof of insurance information with each other.  Failure to provide coverage or proof of insurance may subject the parent claiming the exemption to a penalty when filing their taxes.

If you have legal questions about how the Affordable Care Act affects your joint custody or child support, you should consult with legal counsel in the state in which you reside.

Lisa Fiance, Esq. is a licensed California attorney, formally trained mediator, and the owner of Epiphany ADR. The information contained in this article is intended as general information and does not constitute legal or tax advice.

California Prenup Basics

Although it may not seem romantic, investing in an enforceable premarital agreement can be one of your smartest wedding preparations.  Statistics show that the national divorce rate is about 50%.  In California, it’s about 60%.

Public Policy on Premarital Agreements

Premarital agreements, commonly known as “prenups”, are governed by the Uniform Premarital Agreement Act (UPAA), codified in California by Family Code §1600 et seq.  In fact, forty-eight states have codified the UPAA into their statutes, showing that general legislative policy supports premarital agreements.  While some critics still contend that premarital agreements encourage divorce, California courts tend to view them as mutual, voluntary agreements between spouses (in advance of actual marriage) “intended to foster or perpetuate conditions that will help preserve a forthcoming marriage.”

Enforceable Terms of a Premarital Agreement

Under California law, prospective spouses may contract as to the following issues:

  • Property rights upon separation, divorce, death or the occurrence/non-occurrence of any event;
  • The right to buy, sell, use, transfer, exchange, abandon, lease, consume, expend, assign, create a security interest in, mortgage, encumber, dispose of, or otherwise manage and control property;
  • The execution of other arrangements to carry out the provisions of the premarital agreement;
  • The ownership rights and benefits from a life insurance policy;
  • The choice of law governing the construction of the agreement; and
  • Any other matter that does not violate public policy or constitute a crime.

Prospective California spouses may NOT contract terms that:

  • Waive the obligation of mutual respect, fidelity and support between spouses during marriage;
  • Waive full disclosure obligations;
  • Agree to pay for domestic services or companionship;
  • Dictate the religious upbringing of children;
  • Waive or limit the statutory right of child to receive support from each parent;
  • Provide large conditional payments or other terms that might tend to promote divorce; or
  • Provide penalties for “fault” during marriage.

Requirements for a Valid Premarital Agreement

In order for a premarital agreement to be enforceable, both prospective spouses must enter the agreement voluntarily.  “Voluntarily” means several things.  First, it means that each party is an adult (or emancipated minor) and has mental capacity to contract. Second, prospective spouses may not subject the other to fraud, menace, duress or undue influence.

Each prospective spouse must provide fair and full disclosure of the existence and valuation of their assets, debts, income and expenses to the other prospective spouse.  Each spouse must have at least seven calendar days to review the premarital agreement before signing it.

Premarital agreements must be in writing, signed by both parties, and cannot be unconscionable.  “Unconscionability” refers to elements of oppression, unfair surprise or unreasonable one-sidedness. Unconscionability is assessed at the time of execution, except for issues of spousal support, which are also assessed at the time of challenge to enforcement.

Under California law, each spouse must either obtain independent counsel to advise them of their legal rights, or waive the right of independent counsel in a separate written waiver after being fully advised in writing of the rights and obligations that they may be giving up by entering into a premarital agreement.

Effectiveness of a Premarital Agreement

A premarital agreement becomes effective and is conditional upon the eventual marriage of the parties.  Therefore, if parties decide NOT to marry, the premarital agreement is enforceable only to the extent necessary to avoid an inequitable result.  After marriage, a premarital agreement may be amended or revoked only by a written agreement signed by both spouses.

The information contained in this article is intended as general information and does not constitute legal advice.  If you are considering entering into a premarital agreement, you and your prospective spouse should consult with independent legal counsel in the state whose laws you want to govern your agreement.

Lisa Fiance, Esq. is a licensed California attorney, formally trained mediator, and the owner of Epiphany ADR.  Submit the form below to learn more about CA premarital agreements.Epiphany Head Shot (700 kb)

A Lesson on Settlement Negotiations

As originally reported by California’s leading legal journal The Recorder, the case of Hernandez v. Schaefer Ambulance Services Inc., BC451751 (L.A. Super. Ct., filed Dec. 22, 2010) has become a classic example of how NOT to settle a case.

Summary of the Case

While transporting patient Pablo Valdez Hernandez from an El Centro hospital to a psychiatric facility in San Diego, EMTs left the patient’s left arm unrestrained because he was non-combative.  While travelling west on Interstate 8, one EMT heard a buckle hit the floor and, as he reached back toward the patient, Hernandez leapt out of the moving vehicle onto the freeway.  According to Hernandez’ attorney, C. Michael Alder of AlderLaw PC, the ambulance company’s negligence in failing to adequately secure Hernandez resulted in severe and permanent brain injury to his client.

The Botched Hallway Negotiations

Alder took the case to trial in January 2012, asking for $21 million in damages.  Before closing arguments, defense attorney James E. Siepler of Pollard, Mavredakis, Cranert, Crawford & Stevens offered to settle for $1.25 million, but Alder turned it down.  After only four hours, the jury announced that they were prepared to deliver a verdict.  The short deliberation indicated that it was likely the verdict would be for the defense.

Alder, worried that his client would get nothing, made a last-minute hallway settlement attempt.  The defense, however, was now only willing to settle for $200,000.  After several rounds of offers and counter-offers, Alder finally secured an oral agreement to settle the case for $350,000.  After a sidebar conference, Los Angeles Superior Court Judge Michael Johnson announced to the court that a settlement had been reached and released the jury for comments.  In the moments after, Siepler asked to put the settlement on the record, but it didn’t happen because plaintiff’s attorneys were already following the jury out into the hallway… where they were shocked to learn that the jury had been prepared to offer the plaintiff a $9 million dollar verdict.  At that point, Judge Johnson later stated for the record, “all hell broke loose”.

The Post-Trial Battle

Now the parties are locked in a bitter post-trial battle.  At a hearing on April 25th, the defense requested a dismissal with prejudice, accusing Alder of “egregious misconduct” in that he either falsely told the court that the parties had reached settlement or later falsely told the court that he did not have his client’s authority to settle.

Alder admitted that he made a mistake accepting a settlement offer without his client’s consent, but claims it was an honest one that resulted from the time pressure to obtain some kind of settlement for his client before the jury returned.  “It was a chaotic event and it didn’t go well,” Alder said, “but there was no fraud”.

At the conclusion of the hearing, Judge Johnson found no “egregious misconduct” that required dismissal of the case and ordered a retrial in January 2013.  He also granted the defense the opportunity to amend its answer and file a counterclaim regarding the settlement negotiations.  Johnson is now taking fire for allowing a retrial that appears to prejudice the defendant, since the plaintiff could use the first jury’s results to either amend their complaint to a higher demand or as the gauge for a new round of negotiations.  As the defense puts it, “If plaintiff is allowed to get away with such gamesmanship in this case, there is nothing to prevent any plaintiff’s counsel from testing the waters with one jury, settling the case without authority from the client, interviewing the jurors to see which way they actually were leaning, and then repudiating the settlement and seeking a retrial”.

Lessons Learned

While we wait to see what will happen with the retrial of Hernandez v. Schaefer Ambulance Services, here are some valuable tips that can help you and your client now.

Perform Accurate Case Valuation

Approach negotiations with the expectation that the case will proceed to trial.

    • Know the strengths of your case.  What elements need to be proved for each claim made?  What evidence is required to support each element?  Where will each piece of evidence come from?
    • Acknowledge the weaknesses of your case.  While you will present a strong case, the other side will also present their most vigorous defense. What affirmative defenses were made?  What viable claims might the other side have to support those defenses?  How can you best refute those claims?
    • Gather all the information you can.  Participate in mediation or conduct discovery that helps you understand all of the facets and aspects of your case, even those that might not be readily apparent.
    • Be confident but practical.  Each side should theoretically be willing to settle for their estimation of the likely judgment plus/minus the cost tolitigate.  Let’s look at an example:
      • Plaintiff thinks there is a 60% chance that he can get a $1 million settlement, but it will cost him $300,000 to litigate the matter.  Therefore, plaintiff should be willing to settle for anything over (60% * $1 million) – $300,000 = $300,000.
      • Defendant thinks there is a 40% chance that plaintiff can get a $750,000 verdict, but it will cost the defendant $200,000 to defend against the lawsuit.  Defendant should be willing to settle for anything less than (40% * $750,000) + $200,000 = $500,000.
      • Based on the analysis above, this case should probably settle anywhere between $300,000 – $500,000.

Make Sure You Have Authority to Settle

An attorney must be specifically authorized to settle and compromise a lawsuit; the relationship with the client does not provide an implied authority to bind the client to a settlement. Levy v Superior Court (1995) 10 C4th 578, 586, 41 CR2d 878. See Gauss v GAF Corp. (2002) 103 CA4th 1110, 127 CR2d 370; 6 Witkin, California Procedure, Proceedings Without Trial §120 (5th ed 2008); California Trial Practice: Civil Procedure During Trial §16.33 (3d ed Cal CEB 1995).

Get Your Settlement in Writing

California Code of Civil Procedure (CCP) §664.6 requires that settlement agreements either be “in a writing outside the presence of the court or orally before the court” in order to have a judgment granted pursuant to the settlement terms.  To ensure its enforceability, make sure that your settlement is in writing or is entered into the court record.

Be Honest

California Rule of Professional Conduct (RPC) 5-200 prohibits attorneys from “deceiving the court, opposing counsel, or an opposing party by making false statements or misleading statements or failing to disclose a material fact when disclosure is necessary to prevent a fraudulent or criminal act”.  Lawyers may be subject to discipline for engaging in conduct involving dishonesty, fraud, deceit or misrepresentation.

Keep It Confidential

Keep offers and counter-offers confidential by presenting them within the context of mediation.  Last-minute panic, caused by presumptions about what the jury will or will not award, can lead to rushed negotiations that are not in the client’s best interest.  All conduct, statements and materials prepared for the purpose of mediation remain confidential after the mediation concludes, offering the most private forum available for negotiation discussions.

Lisa Fiance, Esq. is a licensed California attorney, formally trained mediator, and the owner of Epiphany ADR.

[The Recorder], [The National Law Journal], [Judicial Hell Holes], [Red Law LLP]

The “Butt Drag” Mediation – Sexual Assault or Approved Wrestling Move?

It sounds like a scene out of Fairly Legal, the new USA network series, whose lead character is an ex-attorney who finds her true calling when she changes professions and become a mediator. This is real life, though.

The Incident: No one disputes that Preston Hill, 17, grabbed his teammate’s butt cheek to execute a wrestling move called the “butt drag” during a July, 2010 practice at Buchanan High in Clovis, California. From there, however, the parties’ stories diverge dramatically.

The alleged victim, Hill’s freshman teammate, told Clovis police that Hill rammed two fingers into his anus in retaliation for an earlier bullying incident in which the freshman stood up to Hill, a senior, for taking his water bottle.  Hill denied the allegations, telling police he used a legitimate wrestling move in order to motivate his younger teammate to wrestle. In fact, Hill said, his middle school coaches taught him the move (also known as “checking the oil”).

Prosecution: Although police could find no physical evidence of the assault, the alleged victim’s family pushed for Hill to be prosecuted.  In response, Fresno County Deputy District Attorney Elana Smith filed a sexual assault charge against Hill.  The charges, however, resulted in public accusations of overzealous prosecution against the DA’s office. Following these accusations, Smith was allegedly under pressure from her boss, District Attorney Elizabeth Egan, to dismiss the case.

The Mediation: Fresno County Superior Court Judge David Gottlieb apparently helped broker both an opportunity at dispute resolution for the two young men and their families and a way out for the DA’s office. If Hill would take part in a mediation organized by the Los Angeles Sheriff’s Department’s SHARE (“Stop Hate And Respect Others”) program with his teammate, and write an essay afterwards discussing what he had learned, then the charges against Hill would be dismissed.

Hill had initially rejected an offer by the prosecution to drop the charges in exchange for his agreement to issue an apology to his teammate, attend counseling and stay out of trouble for six months.  No one seems to know why Hill rejected that offer.

In January 2011, the Clovis Unified school board expelled Hill after a school panel concluded that Hill had bullied and sexually assaulted his teammate. The following day, Hill agreed to Judge Gottlieb’s proposed mediation.

Two days later, both boys’ parents dropped them off at the Juvenile Justice Campus south of Fresno.  Together, Hill and his teammate watched a presentation on hatred and intolerance held in SHARE’s custom 70-foot mobile theater, and then participated in a mediation session.  After the session, each boy wrote an essay on what he had learned.

Satisfaction:  According to the parties, participating in mediation was worthwhile.

“This case was not about the butt-drag, it’s about bullying and holding people accountable”, the alleged victim’s father said. When the Clovis Unified School District suspended Hill at the start of the school year and then later expelled him, it sent a message to Hill’s friends and others that bullying will not be tolerated, “My son is at peace with the whole process. We want to move on”, the boy’s father said.

Hill’s attorney, Steven Quade, said afterwards, “The case was dismissed. It doesn’t get any better than that.”

Invitation to Discuss: So, readers, what do you think about this settlement?  Was this a crime that should have been prosecuted, or was Judge Gottlieb wise to arrange this mediation as an opportunity to teach two young men how to resolve their differences without resorting to the legal system, where quite possibly neither young man would have come out a “winner”?

Let me hear what you think…

Collaborative Divorce FAQ’s

1. What is collaborative divorce?

Collaborative divorce is a family law process in which a couple who has decided to end their marriage is guided by their respective attorneys, and sometimes other specialists, to reach a mutually agreeable divorce settlement involving spousal maintenance, child custody and/or property settlement issues.

The collaborative process is also appropriate for parents who share custody, couples who want prenuptial contracts, as well as probate, employment, intellectual property and personal injury disputes.

2. How does it work?

First, both attorneys should be trained in the collaborative process. The couple signs a “Participation Agreement” that shows mutual commitment and disqualifies their attorneys from representing them should the matter later go to court.

Through a series of meetings, the couple determines and prioritizes their respective needs and interests. The couple may choose to have child therapists, divorce coaches, accountants or spiritual advisors present to offer guidance. Or, the couple may choose to have no one other than their attorneys present. They then work together to make financial arrangements, share responsibilities and/or coordinate schedules as necessary.

3. What if we change our minds?

If a couple decides to resolve their divorce issues, they may postpone the divorce without any papers having been filed in court. The cost of the process, the impact on the family, and the risk of publicity are all significantly minimized.

4. What if we try it and it fails?

Collaborative divorce is successful because it uses cooperative negotiation. However, collaborative divorces can still fall apart. A couple may reach impasse and decide to take their divorce to court. When this happens, both parties’ attorneys must withdraw from representation. The emotional and financial impact of starting over with new attorneys to litigate the matter is one incentive to seeing things through to the end of a collaborative divorce.

5. Are certain kinds of situations NOT good for collaborative divorce?

Situations that involve domestic violence, addiction, untreated mental illness or intention to cause emotional or financial pain are not good candidates for collaborative divorce and may be better suited to arbitration or litigation.

Avoiding a Sensational Divorce

The news is full of celebrity couples on the brink of divorce, including the latest victims Tiger and Elin Woods and Sandra Bullock and Jesse James.  While you may not be a celebrity, the same concepts that can help make these high profile divorces less public and painful can apply to anyone considering divorce.

The latest solution for divorcing couples is called collaborative divorce.  Collaborative divorce allows the divorcing parties to control the process and terms through a non-confrontational process, rather than proceeding through the notoriously bitter and expensive process of divorce litigation.

The Litigation Process

In litigation, each side’s attorney performs countless hours of financial research, and waits for the other side to produce their results of countless hours of research.  Parties file aggressive motions and petitions against the other, essentially “going to war” with the goal of causing as much emotional and financial injury to the other person as possible. In the end, there are relatively few forms to fill out, yet a divorce can drag on for years, all at the expense of the parties who are each trying to move on and start over.

And all too often, divorce attorneys are unaware or simply don’t care that the typical “adversary” style that works so well in the courtroom is actually fueling the fire of the already existing dispute.  Or are they unaware?  Arguably, it may be in a divorce attorney’s self interest to allow a divorcing couple to fight on indefinitely, since the attorney is being paid an hourly rate and the couple “needs to work out their issues” in order to find closure.  Of course, attorneys have ethical obligations to perform competently and diligently, and an ethical lawyer will not intentionally drag out a case for the sake of a higher fee.

The Collaborative Divorce Process

In collaborative divorce, parties agree at the outset not to take the divorce to court. The collaborative process emphasizes cooperation instead of confrontation, and problem solving instead of fault finding.  Parties agree to avoid confrontation for the sake of reaching a mutual agreement that leave their fates in their own hands, instead of in the hands of a judge.

Assisted by a trained collaborative attorney, the parties then mediate their financial, property and custody issues, and negotiate the settlement they want presented to the judge. Parties can agree to have any number of financial, emotional or spiritual advisors present to help, or parties may choose to use a single financial advisor to help maintain confidentiality of financial assets.

Benefits of Collaborative Divorce

  • Private and confidential – keeps private issues out of the public eye
  • Fast and flexible – couples decide how fast the divorce proceeds and who else is involved
  • Affordable – there is no need for a divorce to drag on for years
  • Reduces stress – benefits the adults involved AND their children
  • Parties control it – any settlement must be agreeable to both people
  • Forward-focused – focuses on solutions that allow both parties to move on
  • Positive – allows a peaceful ongoing relationship if parties so choose

Consequences of Taking a Divorce Public

  • Charlie Sheen & Denise Richards – This couple’s initially amicable divorce suddenly derailed when the media picked up on Sheen’s hateful emails and voicemails to Richards.  In response, Richards filed court papers publicly claiming that Sheen was physically abusive and addicted to gambling and porn. The couples’ two children were caught in the middle. Two years after starting the divorce, the couple settled for an undisclosed amount.
  • Christy Brinkley & Peter Cook – After ten years of marriage, news broke of Cook’s affair with a teenager he met in a toy store and this couple was headed for divorce court to resolve issues of child custody.  Cook hired a psychiatrist to say that Brinkley was “consumed by rage”. The report, however, showed that Brinkley should still get full custody of the couple’s two children. Brinkley, in turn, claimed that Cook was addicted to porn. The end result was a settlement for $2.1 million for Cook, with custody going to Brinkley, but the lasting effect on the two kids may not be known for years.
  • Paul McCartney & Heather Mills – After only four years of marriage, this couple announced plans to split in 2006.  Tabloids seized the opportunity to research Mills’ past, alleging that she was a prostitute and a gold-digger. In response, Mills accused McCartney of emotional and physical abuse.  A bad move, given the outpouring of public support for him that resulted.  Mills, however, still walked away with a settlement worth over $48 million.
  • Tricia Walsh (the YouTube Divorce) – When her husband Philip Smith, President of Broadway theater owners The Shubert Organization, “unfairly evicted” her from their Park Avenue apartment, Walsh decided to air her grievances in a 6 ½ minute YouTube video. The video publicly discussed the couples’ prenuptial agreement and described embarrassing private details about the couples’ sex life.  Three months later, a judge granted the husband a divorce based on cruel and inhuman treatment and blasted Walsh for her “calculated and callous campaign to embarrass and humiliate her husband”. Walsh received $750,000 but the eviction was upheld.