Flying High On Pension Benefits

Continental Airlines Inc. found out that several of its pilots obtained divorces to receive  benefits, concealed the divorces from their friends and families and later re-married after receiving the benefits.  Although the airline pursued action, the Court of Appeals for the 5th Circuit held on July 18, that Continental Airlines Inc. cannot recover lump sum pension plan benefits paid to pilots who allegedly got “sham divorces” in order to obtain payment of their benefits under the Employee Retirement Income Security Act. If a pilot is at least 50 years old, the pilot can assign his or her benefits to an ex-spouse, who in turn can then elect to receive those benefits regardless of whether or not the pilot is retired. 

The airline alleged that pilots created this scheme because of fears that financial difficulties would result in their pension plans being taken over by the Pension Benefit Guaranty Corporation, that their benefits would be reduced upon retirement, and that the lump-sum option would become unavailable . The Court’s reasoning for denying relief to the airline is that it doesn’t want pension administrators to second guess state family court determinations.

This decision is somewhat surprising. Putting aside for a moment that the reasoning seeks to respect a court’s divorce decision and give it full discretion, it also seems fraudulent. What’s really going on here? Is it a loophole to be taken advantage of or a deceitful plot to early payment of benefits? Isn’t it an unnecessary strain on court resources to have fake divorces and subsequent remarriages?… <Read More>

Diamonds Are Forever?

A Judge in the Delaware Court of Common Pleas ruled that a man is entitled the return of an engagement ring he gave his former fiancé where it was found that the ring was given on the condition of their intended marriage and that the engagement was mutually broken by the parties. Many other jurisdictions follow the rationale that the donor is entitled to return of the conditional gift in the event that the marriage does not take place, regardless of who calls off the engagement (New York for example). Some jurisdictions take the view that the gift is unconditional and the man is not entitled to get “the rock” back. It is interesting that Delaware incorporates an element of mutual dissolution of the engagement into the equation. When did “Will you marry me?” lose its romantic symbolism and become an offer to enter into a contract? So many aspects of the institution of marriage are contractual, i.e. pre-nups, post-nups, custody and support agreements etc. New York now takes a no-fault approach to divorce, and so it seems only fair that a no-fault ring return policy is in place. After all, a man spends thousands of dollars on a pricey bauble in contemplation of marriage; would it be just to leave him with thinner pockets and her with a windfall? Just as with any broken contract, restitution is appropriate. The issue of fault may be relevant but it would probably put a heavy strain on already overburdened court resources. Unfortunately in this day and age, diamonds are not forever.… <Read More>

Drugstore DNA Test Kit Results Not Admissible

In December of 2009, a man’s new wife brought to his attention that his son of fourteen years didn’t have much of a resemblance to him. He decided to buy a DNA test kit from a drugstore in Indiana and sent the mouth swabs to a testing center. The results came back and indicated that there was no biological relationship between the man and his son.

The man had executed an affidavit of paternity the day after the child was born in 1995. He was informed of his right to take a DNA test but declined. Upon receiving the results from the store-bought DNA test kit, he moved to set aside the paternity affidavit and for DNA testing. The trial court denied his motion and the Indiana Court of Appeals affirmed last month, finding that the mother’s testimony that they were involved in an exclusive sexual relationship at the time of the child’s conception was credible and that the drugstore DNA test kit results were inadmissible.

In Indiana, a paternity affidavit cannot be rescinded more than sixty days after its execution unless there is fraud, duress or mistake of fact and only where the court has ordered a genetic test that excludes the man as the father of the child. The court stated in its reasoning that there was no reason to find the drug store kit results credible since the instructions on them specifically say they are not to be used for legal purposes and that there was no information from the purported laboratory to support its findings.… <Read More>

Dad Must Pay Even Though He Believed Baby Was Dead?

A trial court in Tennessee ordered a father to pay retroactive child support for the time period that he believed the child was dead after being misled by the mother. The father lived in Louisiana and came to visit a few weeks after the child was born. First the mother lied and told him the baby was not his. She later called him and told him that the infant died of Sudden Infant Death Syndrome. When the child was three years old a Georgia court found the child to be deprived and put her into the custody of her maternal grandmother who lived in Tennessee. In 2004, the eleven year old child expressed a desire to meet her father and her grandmother was able to locate him. A Louisiana court entered a paternity judgment and he was ordered to pay child support. He began visiting the child and petitioned to be named primary residential parent. He was awarded custody but ordered to pay retroactive child support to the grandmother for the time that the child was in her care and the father believed the child was dead.

State guidelines provide a presumption that support will be awarded retroactively to the date of the child’s birth except in cases where it would be inequitable. The statute includes as a factor for consideration the extent to which the father could have known of or the mother concealed the child’s existence. The trial court concluded the exception applied only in cases where the father did not know of the child’s existence and in this case the father knew of the child’s existence since he visited the baby a few weeks after her birth.… <Read More>