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New Hampshire Supreme Court Ruling on Gay Divorce Property Distribution

Posted on: August 24th, 2016 by Art Leonard No Comments

The New Hampshire Supreme Court ruled on August 19 that a judge deciding a divorce case for a lesbian couple could take into account the couple’s many years of cohabitation before the state made it possible for them to become civil union partners and then spouses, in deciding how to divide up their “marital assets.” The decision in Matter of Deborah Munson and Coralee Beal, 2016 N.H. LEXIS 180, 2016 WL 4411308, adopts a creative interpretation of the divorce statute in order to get around the limiting concept of “marital property” usually applied in such cases.

The ruling follows the lead of several other states in confronting what is likely to be a recurring issue during this transitional period following the adoption of marriage equality in the United States. Divorce statutes normally include “the length of the marriage” as a factor to take into account when the court decides how to divide up assets as part of a divorce proceeding following a brief marriage.  Many long-term same-sex couples married over the past few years after lengthy periods of non-marital cohabitation, and spouses of unequal income within a relationship could be seriously disadvantaged if the court could not take account of the entire length of their relationship in deciding on a fair asset distribution.

In this case, Deborah Munson and Coralee Beal lived together as a couple for fifteen years before they were able to become civil union partners as a result of new legislation in New Hampshire in 2008. When the state subsequently passed a marriage equality bill that took effect on January 1, 2011, their civil union was automatically converted into a marriage.  On March 28, 2012, Munson filed a petition for divorce.  At trial, she took the position that this was a short-term marriage, a factor that would cut against Beal’s potential distribution of assets.

Beal countered by arguing that prior to the legalization of “gay marriage” the couple “did what the law allowed them to do as any other married couple to provide for each other, including, but not limited to executing estate plans that left respective estates to the other, [Munson] providing life and health insurance for her partner’s benefit, having joint accounts, sharing duties within the home and finally joining together in a civil union and legal marriage.” Beal argued that the court “must consider the parties’ lengthy twenty-one year relationship when ordering a distribution of the marital property in this matter.”

However, the court marked October 8, 2008 (the date of their civil union) as the start of their marriage for purposes of this case, holding that “the issues in their divorce will be determined using that as the start date.” As a result, the court departed from the usual presumption of equal distribution of assets and ordered distribution of only about 12% of the marital estate to Beal in addition to ordering Munson to pay her alimony of $500 per month for five years.  Beal appealed.

Justice Gary Hicks, writing for the court, quoted the statute’s definition of the “marital estate” as including “all tangible and intangible property and assets, real or personal, belonging to either or both parties, whether title to the property is held in the name of either or both parties,” and the statute “assumes that all property is susceptible to division.” Normally, an equitable distribution involves a relatively equal distribution of the assets.  However, the statute permits a court to find that an equal distribution “would not be appropriate or equitable after considering one or more of” fifteen factors listed in the statute, including “the length of the marriage.”

In the case of a “short-term marriage” where one spouse brings substantially greater assets than the other to the marriage, a court may decide that it is inappropriate to redistribute to the spouse who brought much less to the marriage a significant share of what the wealthier spouse brought to the marriage. This seems quite logical.  If a rich person marries a poor person and the marriage quickly breaks down, would it be proper to total up all their assets and divide them in half?  Such an approach might lend itself to undesirable fortune-hunting schemes.  Pointing to the court’s past rulings on this issue, Hicks wrote, “We have observed that in a short-term marriage, it is easier to give back property brought to the marriage and still leave the parties in no worse position than they were in prior to it.”  However, he pointed out, duration of the marriage is only one of many factors to consider, and “marital property is not to be divided by some mechanical formula but in a manner deemed ‘just’ based upon the evidence presented and the equities of the case.”

In this case, the trial court applied the “short-term marriage” approach and specifically stated in its ruling that it “declined Beal’s invitation to declare the parties married upon their cohabitation in the 1990s.” On appeal, Beal argued that the court’s approach erred in failing to consider the “commingling of assets before 2008,” and that by focusing on the shortness of their legal marriage, “the trial court ignored the substantial and uncontroverted evidence developed at trial that the parties had a committed romantic and financial partnership long before 2008.”

After referring to decisions taking into account pre-marital cohabitation from courts in Oregon, Michigan, Hawaii, Indiana, Montana, and Connecticut, the New Hampshire court decided that it could not totally ignore the statutory factor of “length of the marriage” and explicitly treat this marriage as having been 21 years long. However, the list of factors in the statute includes a final catch-all category: “any other factor” that the court “deems relevant.”  As courts in those other states had recognized, “premarital cohabitation may be relevant to the distribution of marital property” in cases where a couple had commingled their assets.

“The couple may have become depend upon the assets that they shared prior to marriage,” wrote Hicks, “such that it may not be just for a court in divorce proceedings to ignore their cohabitation period when determining what constitutes an equitable property distribution.” He specifically noted arguments submitted in support of Beal’s appeal by the ACLU of New Hampshire and Gay & Lesbian Advocates & Defenders, contending that “when a divorcing couple’s relationship has included ‘years of economically interdependent cohabitation followed by a “short” marriage, the notion of returning the parties to their original premarital position is unrealistic’ because ‘the relationship was not, in any relevant way, short-term.’”

Thus, the New Hampshire Supreme Court could see “no reason” why the statute, “which broadly permits the trial court to consider ‘any other factor that it deems relevant,’ would not permit the court to consider premarital cohabitation. We therefore hold that premarital cohabitation is a factor that the court may consider in divorce proceedings when determining whether to depart from the presumption that ‘an equal division is an equitable division of property.’”

In this case, the trial court made detailed factual findings relevant to this issue, and then apparently ignored them in declaring that it would treat this as a “short-term marriage” as to which it would depart from the equal division presumption. “We conclude,” Hicks wrote, “that, by not taking these findings into account, the court did not exercise the full breadth of its discretion under the statute.”  Thus, the case would have to be remanded for a reconsideration of the property division.

Furthermore, in making the alimony award, a trial court is supposed to take into account whatever property division it has made. Since the property division will have to be reconsidered, so will the alimony award.

The court rejected Munson’s argument that because the couple could have married early than 2008 as same-sex marriage was available in a few other states and Canada prior to that date, Beal’s argument that civil unions were not available prior to 2008 should be rejected. “Whether Munson and Beal could have entered into a civil union or married earlier does not affect our analysis,” wrote Hicks.  “Had they done so, their period of premarital cohabitation would have been shorter, but, for the reasons previously discussed, it would have still remained a relevant factor in the determination of an equitable property division.”

The court also noted that the logic of its ruling would apply as well to different-sex couples who divorce shortly after marrying but after cohabiting for a long time, pointing out that long-term cohabitation has become much more common, and quoting one study showing that in 2008, “6.2 million households were headed by people in cohabiting relationships. . . They included 565,000 same-sex couples.” Thus, this holding applies in all divorce proceedings.

The court rejected Munson’s argument that its ruling would violate a New Hampshire constitutional provision barring “retroactive enforcement of laws that affect substantive rights or impose new duties or obligations,” finding this argument “unavailing” because it was not in any way changing the definition of “marital assets” or deeming the cohabitation to consist of a “marital status,” but merely giving a reasonable interpretation to the “other factors” provision in the statute.

Beal is represented by Kysa M. Crusco of Bedford. Paul R. Kfoury, Sr., Andrea Q. Labonte and Courtney M. Hart of Manchester and Saco, Maine, represented Munson.  The amicus brief was filed by Gilles R. Bissonette of the ACLU of New Hampshire and Mary Bonauto of GLAD, based in Boston.  Bonauto argued on behalf of the plaintiffs in the Supreme Court’s 2015 marriage equality case, Obergefell v. Hodges.