Courts Bulletin: Recent developments in Missouri Family Law

Administrative child support orders are available for the support of all eligible children, including children of citizens of other countries. Lajeunesse v. State of Missouri Department of Social Services, No. 73477 (Mo. App. W.D., October 4, 2011), Martin, J.

A child was born to a Russian citizen in West Virginia. Father was a Missouri resident and a support order was sought for the child through the Department of Social Services (DSS), which established paternity and Father’s financial responsibility for support. Mother and child now live in Russia. The Father filed a petition for judicial review and the trial court found that Department of Social Services was without jurisdiction to enter an administrative order requiring Father to pay child support. Upon Father’s motion the trial court overturned the administrative order. DSS appealed.

Held: Reversed. “. . . Father argues that unless a recipient is a resident of the State of Missouri or another state, the recipient is not eligible for child support services.”

The applicable sections of the statutes, § 454.425 and 454.400, do not provide for child support relief for only United States residents. “By its plain terms, § 454.400.2(14) is broad, requiring child support services to be provided to any other child for whom services are applied. This is in keeping with § 454.425, which also broadly permits services to be provided to all children, custodial parents, and persons entitled to receive support. A harmonious reading of § 454.425 and 454.400.2(14) indicates that the legislature intended to authorize and require DSS to provide services to any child for whom services are applied. This broad and unrestricted directive is not, by its terms or by implication, limited to residents (or citizens) of the United States.”

An agreement that maintenance will terminate “only” upon death excludes application of § 452.370 for termination of maintenance upon remarriage. Simpson v. Simpson, No. 91498 (Mo. banc, October 4, 2011), Fischer, J.

The parties were divorced in 2005. They entered into an agreement by which the Husband would pay the Wife $12,000 per month in non-modifiable maintenance for 15 years. Said maintenance was to “terminate prior to the expiration of said 15 year period only in the event of the death of either party.” In 2009, the Wife remarried. The Husband filed a motion to terminate maintenance on the basis of her remarriage. The Wife responded by filing a motion to dismiss his claim, which was granted. The Husband appealed, and the matter ended up in the Missouri Supreme Court to address the applicability of § 452.370.3, RSMo, that provides that maintenance terminates immediately upon Wife’s remarriage unless otherwise agreed in writing or expressly provided in the judgment.

Held: Affirmed. “The problem with the Husband’s argument is that he and Wife agreed in writing in the separation agreement that maintenance would terminate ‘only in the event of the death of either party.”

“[T]he use of the word ‘only’ in the separation agreement is sufficient to overcome the statutory presumption of § 452.370…”

Generally, retained earnings of closely-held corporation are corporate assets and not marital property and distributions to liquidate corporation in exchange for non-marital stock are not marital property. Short v. Short, No. 95663 (Mo. App. E.D., October 25, 2011), Sullivan, J.

This was an action for dissolution of marriage in which the parties had a prenuptial agreement. The meaning of the agreements terms were in dispute, especially regarding whether it provided that earnings derived from separate property had been excluded from marital property. Both parties appealed. As a side note, it is interesting that the parties met four days before the wedding to discuss the terms of the prenuptial agreement in detail. A draft of the agreement was first presented to the unrepresented Husband the day before the wedding. The trial court’s determination that the agreement should be upheld as valid was affirmed despite the short amount of time noted herein.

The trial court found that the agreement did not expressly exclude as non-marital property the income earned from that non-marital property during the marriage. During the marriage the Wife received several million dollars in liquidating distributions in exchange for cancellation of her non-marital stock interest in a closely-held corporation. The trial court found those distributions to be marital property.

Held: Reversed in part as to the character of the corporate liquidation payments in exchange for non-marital stock. “Evidence presented at trial showed that approximately 97% of (corporation’s) assets at the time of (corporation’s) liquidation were comprised of …̔ retained earnings.’ Generally, retained earnings of a corporation do not constitute marital property. Hoffmann v. Hoffmann, 676 S.W.2d 817, 827(Mo. banc 1984); Craig-Garner v. Garner, 77 S.W.3d 34, 38 (Mo. App. E.D. 2002). Retained earnings and profits of a corporation are a corporate asset and remain the corporation’s property until severed from other corporate assets and distributed as dividend. Hoffmann v. Hoffmann, at 827; Craig-Garner v. Garner, at 38.”

Moreover, “[t]he money Wife received as liquidating distributions from the dissolution of (corporation) was not income earned by her separate stock; rather, it was liquidated capital distributions received in exchange for, and in cancellation, of her stock in (corporation), which was her separate property.”

Source for Post: November issue of Courts Bulletin. A publication of the Missouri Bar