Articles Posted in Family Law

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Henricks owned a towing business, an auto body shop, and a vehicle dealership, which he used to defraud insurance companies by filing fraudulent claims. Henricks’s wife, Catherine, worked at the companies sporadically and was an officer of two of them and a member of the other. She opened bank accounts and signed loan documents on behalf of the companies. Henricks pleaded guilty to mail fraud and immediately began to hide assets. He was sentenced to imprisonment and ordered to pay restitution of $1,306,608.72. Catherine filed for divorce and for bankruptcy. Catherine entered an appearance as an interested person in Henricks’s criminal case. The district court found that Henricks had defaulted on his restitution payments and that the divorce was a sham, then determined the parties’ interests in properties so that Henricks’s property could be directed toward restitution. The Seventh Circuit vacated. The court had jurisdiction under the Fair Debt Collection Procedures Act to decide the parties’ property interests in Henricks’s criminal case and did not violate Catherine’s due process rights. The court, however, improperly relied upon post‐judgment conduct instead of determining the parties’ property interests as of the date of the judgment lien. Whether the divorce was a sham was relevant to whether Henricks’s defaulted on restitution, but is irrelevant to the parties’ ownership interests on the judgment date. View "Henricks v. United States" on Justia Law

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Henricks owned a towing business, an auto body shop, and a vehicle dealership, which he used to defraud insurance companies by filing fraudulent claims. Henricks’s wife, Catherine, worked at the companies sporadically and was an officer of two of them and a member of the other. She opened bank accounts and signed loan documents on behalf of the companies. Henricks pleaded guilty to mail fraud and immediately began to hide assets. He was sentenced to imprisonment and ordered to pay restitution of $1,306,608.72. Catherine filed for divorce and for bankruptcy. Catherine entered an appearance as an interested person in Henricks’s criminal case. The district court found that Henricks had defaulted on his restitution payments and that the divorce was a sham, then determined the parties’ interests in properties so that Henricks’s property could be directed toward restitution. The Seventh Circuit vacated. The court had jurisdiction under the Fair Debt Collection Procedures Act to decide the parties’ property interests in Henricks’s criminal case and did not violate Catherine’s due process rights. The court, however, improperly relied upon post‐judgment conduct instead of determining the parties’ property interests as of the date of the judgment lien. Whether the divorce was a sham was relevant to whether Henricks’s defaulted on restitution, but is irrelevant to the parties’ ownership interests on the judgment date. View "Henricks v. United States" on Justia Law

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Timothy and Belva Thorpe bought an Illinois house as joint tenants in 1987. They lived in that home until after Belva filed for divorce in October 2012. Timothy filed for bankruptcy protection in June 2013. A month later, an Illinois divorce court awarded Belva the marital home. At the moment Belva filed for divorce, section 503(e) of the Illinois Marriage and Dissolution of Marriage Act granted Timothy and Belva contingent rights in the entire house. The bankruptcy estate acquired Timothy’s half-interest in the marital home at the moment he declared bankruptcy. The district court held that Timothy’s estate took his half-interest subject to Belva’s contingency so that the divorce court’s award divested the estate of any right to the house. The Seventh Circuit affirmed, rejecting the trustee’s argument based on the second sentence of section 503(e), which provides that contingent interests in marital property “shall not encumber that property so as to restrict its transfer, assignment or conveyance.” The plain statutory text demonstrates that the bankruptcy estate took Timothy’s half-interest in the marital home subject to Belva’s contingent interest. View "Reinbold v. Thorpe" on Justia Law

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The Milchteins have 15 children. The two eldest refused to return home in 2011-2012 and were placed in foster care by Wisconsin state court orders. In federal court, the Milchteins argued that state officials violated the federal Constitution by either discriminating against or failing to accommodate their views of family management in the Chabad understanding of Orthodox Judaism. Those children now are adults. State proceedings with respect to them are closed. The Seventh Circuit affirmed the dismissal of the Milchteins’ suit as moot, rejecting arguments the district court could have entered a declaratory judgment because the Milchteins still have 12 minor children, who might precipitate the same sort of controversy. The Milchteins did not seek alteration of the state court judgment, so the Rooker-Feldman doctrine did not block this suit but it is blocked by the requirement of justiciability. The Milchteins want a federal judge to say where a state judge erred but not act on that error: “a naked request for an advisory opinion.” If Wisconsin again starts judicial proceedings concerning the Milchteins’ children, the "Younger" doctrine would require the federal tribunal to abstain. Younger abstention may be inappropriate if the very existence of state proceedings violated the First Amendment but the Milchteins do not contend that it is never permissible for a state to inquire into the welfare of a religious leader’s children. View "Milchtein v. Chisholm" on Justia Law

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The Milchteins have 15 children. The two eldest refused to return home in 2011-2012 and were placed in foster care by Wisconsin state court orders. In federal court, the Milchteins argued that state officials violated the federal Constitution by either discriminating against or failing to accommodate their views of family management in the Chabad understanding of Orthodox Judaism. Those children now are adults. State proceedings with respect to them are closed. The Seventh Circuit affirmed the dismissal of the Milchteins’ suit as moot, rejecting arguments the district court could have entered a declaratory judgment because the Milchteins still have 12 minor children, who might precipitate the same sort of controversy. The Milchteins did not seek alteration of the state court judgment, so the Rooker-Feldman doctrine did not block this suit but it is blocked by the requirement of justiciability. The Milchteins want a federal judge to say where a state judge erred but not act on that error: “a naked request for an advisory opinion.” If Wisconsin again starts judicial proceedings concerning the Milchteins’ children, the "Younger" doctrine would require the federal tribunal to abstain. Younger abstention may be inappropriate if the very existence of state proceedings violated the First Amendment but the Milchteins do not contend that it is never permissible for a state to inquire into the welfare of a religious leader’s children. View "Milchtein v. Chisholm" on Justia Law

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In 2004, Arnold and Villarreal exchanged marriage vows in California in a ceremony solemnized by a priest and a rabbi. They failed to file their marriage license with the county recorder within 10 days as required by California law. The county notified them that the license had not been filed, as necessary to complete the legal process. The couple did nothing; the license expired. Although they were not legally married, they had a child and purchased a condo in California. By 2007, their relationship had deteriorated. They filed for divorce—she in California, he in Illinois. Divorce proceedings were terminated when they stipulated that they were never married. Arnold then sued Villarreal in federal court in Chicago, claiming that she tricked him into believing they were legally married to induce him to give her gifts, including the condo. The district court entered summary judgment for Villarreal, characterizing the suit as “frivolous.” The Seventh Circuit affirmed. The undisputed facts show that Villarreal told Arnold early on that she suspected they weren’t legally married. She wanted to get a new marriage license and repeat the ceremony. Arnold knew, from the county recorder, that the marriage license had not been filed. The court awarded Villarreal sanctions against Arnold for filing a frivolous appeal. View "Arnold v. Villarreal" on Justia Law

Posted in: Family Law

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Hernandez and Cardoso, citizens of Mexico, have two children: A.E., born in 2008, and M.S., born in 2002. Cardoso left Mexico with the children in 2014, allegedly to escape Hernandez's abuse and protect the children. Hernandez learned of Cardoso’s location in Chicago and sought the return of A.E. under the Hague Convention on the Civil Aspects of International Child Abduction. Cardoso agreed to return M.S. to Hernandez, but refused to return A.E. The district court heard witnesses and took testimony from the child, in chambers, outside the presence of counsel or the parties. The court found that Cardoso testified credibly that Hernandez hit her in the presence of A.E., intending that A.E. witness the abuse of his mother. The judge “observed a significant change in the demeanor of A.E. when the child discussed Hernandez, the domestic violence and the possible return to Hernandez’s custody.” The court found clear and convincing evidence of a grave risk of physical or psychological harm to A.E. if returned to Hernandez’s custody. The Seventh Circuit affirmed, finding the credibility determination sound. Repeated physical and psychological abuse of a child’s mother by the child’s father, in the presence of the child, is likely to create a risk of psychological harm to the child. View "Hernandez v. Cardoso" on Justia Law

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Smith’s husband obtained a Capital One credit card that he used for family consumer debts. Smith subsequently filed for bankruptcy. Smith’s husband did not join Smith’s petition and was not listed as a co‐debtor. The bankruptcy court confirmed Smith’s Chapter 13 plan. During Smith’s repayment period, Capital One, through attorney Kohn, sued Smith’s husband and obtained a Wisconsin state court judgment for amounts owed on his credit card; it has not attempted to enforce the judgment. Smith initiated a successful bankruptcy court adversary proceeding, arguing that Smith’s husband’s credit card debt was covered by the co‐debtor stay due under Wisconsin marital law and alleging violations of the co‐debtor stay, 11 U.S.C. 1301(a); the Wisconsin Consumer Act; and the Fair Debt Collection Practices Act, 15 U.S.C. 1692(d)(e). The district court reversed, holding that “consumer debt of the debtor” does not include a debt for which the debtor is not personally liable but that may be satisfied from the debtor’s interest in marital property. The Seventh Circuit affirmed. Smith’s suggested expansion of the co‐debtor stay is contrary to its plain meaning and purpose, which is to prevent undue pressure that creditors could otherwise exert by threatening action against third-parties who have co‐signed the debtor’s debts. View "Smith v. Capital One Bank (USA), N.A." on Justia Law

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Mrs. Edelson filed a Chapter 13 bankruptcy petition. She and her husband, who did not join her petition or file his own, held their Chicago home as “tenants by the entirety,” until seven months before the petition, when they conveyed it to the husband’s living trust. The conveyance states that “the beneficial interest” in the trust is held by the Edelsons, “husband and wife, as tenant[s] by the entirety.” The bankruptcy petition named Loventhal, Mrs. Edelson’s former husband, as an unsecured creditor for $92,000. Mrs. Edelson proposed a payment plan that would give Loventhal $16,000 over five years and designated the residence as exempt. Loventhal argued that the transfer to the husband’s trust eliminated the tenancy by the entirety. The bankruptcy judge, district court, and Seventh Circuit rejected his argument, citing 11 U.S.C. 522(b)(3)(B): “any interest in property in which the debtor had, immediately before the commencement of the case, an interest as a tenant by the entirety” is exempted “to the extent that such interest … is exempt from process under applicable nonbankruptcy law,” and Illinois law, which exempts tenancies by the entirety from process to satisfy judgment “against only one of the tenants.” While the trust instrument includes provisions inconsistent with tenancy by the entirety, the Joint Tenancy Act forbids any construction that would sever the tenancy by the entirety. View "Loventhal v. Edelson" on Justia Law

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During their acrimonious divorce, Paula accused Barry of serial infidelity. In discovery Barry asked her for all documents related to that accusation. Paula complied and produced copies of incriminating emails between Barry and several other women. In a separate lawsuit, Barry alleged that Paula violated the federal Wiretapping and Electronic Surveillance Act, 18 U.S.C. 2520, by surreptitiously placing an auto-forwarding “rule” on his email accounts that automatically forwarded the messages on his email client to her and that Paula’s lawyer violated the Act by “disclosing” the intercepted emails in response to his discovery request. The district judge dismissed. The Seventh Circuit affirmed that Paula’s lawyer cannot be liable for disclosing Barry’s own emails to him in response to his own discovery request. The allegations against Paula, however, technically fall within the language of the Act, “though Congress probably didn’t anticipate its use as a tactical weapon in a divorce proceeding.” The emails attached to the complaint did not conclusively defeat Barry’s allegation that Paula intercepted his emails contemporaneously with their transmission, as required by the Act. View "Epstein v. Epstein" on Justia Law