Alaska Divorce Lawyer & Attorney : Peg Roston Law Firm : Property Division, Net Worth, Division of Assets : Anchorage, Alaska

Since 1996, the law in Alaska has been that the Exxon Valdez claims for punitive damages are marital property to the extent that the claims for compensatory damages are marital property. Lundquist v. Lundquist, 923 P.2d 42, 51 (Alaska 1996). However, as the Alaska Supreme Court commented in 2000: “[I]t is not known how much will be collected or even if the plaintiffs will ever actually collect this award.” Edelman v. Edelman, 3 P.3d 348, 355 (Alaska 2000).

At the time of Edelman, the punitive damages award was $4.786 billion dollars. Id. But Exxon had appealed the award to the Ninth Circuit Court of Appeals. Id.

Yesterday, the United States Supreme Court slashed the punitive damages award from $2.5 billion dollars to $500 million dollars. The Alabama Appellate Watch has a well-written succinct summary of the Exxon Shipping Co. v. Baker decision:

Justice Souter authored the 5-3 majority opinion. In his opinion, Justice Souter found that this was a maritime case, and thus decided under the federal common law and not due process principles. Justice Souter discussed at length the different punitive damage standards used by various states, and discussed the general purposes of punitive damages. Interestingly, Justice Souter notes that "by most accounts the median ratio of punitive to compensatory awards has remained less than 1:1." Slip Op. p. 24-25.

Justice Souter also examined three various methods used to review punitive damages: (1) verbal tests (using criteria such as "shock the conscience" or "passion and prejudice"); (2) dollar caps; and (3) ratios.

In the end, Justice Souter found the ratio test most appropriate. Under the facts of this case, where no malicious intent was found or behavior driven primarily for gain, and with a substantial compensatory award, a 1:1 ratio was appropriate. Thus, the award was reduced to the amount of the compensatory award, which is approximately $500 million.

I recommend that any visitor to this post who has been involved with the Exxon case and has a final judgment, is in the middle of a divorce, or is contemplating a divorce contact their divorce attorney to discuss the impact of this decision on them. 

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In my last post I offered some steps parents could take to prevent their children from feeling caught in the middle of a divorce. In response to this post, I received a comment from Steven, who raised several insightful issues:

 In response to my suggestion that parents should not “grill” their children, Steven commented:

Doesn't this vary depending on the circumstances?  If there is a good chance of abuse at the other parent's home, having the kid discuss it directly with the other parent may not work well.

Steven is absolutely correct on this point.  If your child tells you the other parent has been physically abusive, you should contact your attorney immediately if you have an attorney.  Otherwise, you should contact The Alaska Network On Domestic Violence And Sexual Assault, which has resources for victims of domestic violence.  Your number one priority should be the safety of your child.

In response to my suggestion that parents should not show children copies of the divorce paperwork, Steven commented:

It seems that the age of the child is also important.  What is the reasoning behind not showing the children the divorce paperwork?  This is probably the most important document affecting the kids' lives and they can't see it? Even if they are 15? 

If parents are fighting over the custody of their children, there may be psychological evaluations, affidavits, or a custody investigator’s report to the court about the placement of the children.  Affidavits, which are drafted by attorneys, frequently contain stinging barbs and accusations.  Psychological evaluations and custody reports may include sensitive information about parents, which if revealed could damage the parent-child relationship.  Finally, in a contested custody case, one of the factors the court must consider is the preference of the child.  To have a parent go through court documents with a child who has expressed a preference to a psychologist or custody investigator to live with the other parent creates a stressful and potentially emotionally damaging situation for the child.

Even if the parents are only fighting about property, the court documents may still reflect ongoing hostility between the parents.  Showing children these court documents does nothing to further the emotional well being of the children.

Finally, parents may have reached an agreement on the division of their property, the custody of the children and child support.  It is certainly reasonable to create a calendar, which shows the custody schedule so that parents and children can plan their activities.  But the actual court documents usually address not only the custody schedule but also the parties’ financial agreements, including how the parents are going to share uncovered medical expenses and how child support is going to be calculated.  The decision to share information about the parents’ financial obligations to each other should be made jointly by the parties.  If one parent unilaterally decides to share this information with the children, that parent may have an agenda, which has nothing to do with the children’s best interests.

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A divorce will have a direct impact on your children’s emotional health and well-being even after the decree has been signed and you and your ex-spouse have moved on with your lives. Here are a few steps you can take to prevent your children from feeling caught in the middle of the divorce.

• Do not use the children to deliver messages to the other parent.
  
• If you pay child support, do not give your child support check to one of your children to deliver to the other parent.
  
• Do not discuss how much support you are paying or receiving with your children.
  
• Do not grill the children for information about what is going on in the other parent’s home. Your children may want to talk about their life at the other parent’s home. If they initiate a conversation about the other parent, it is best to listen thoughtfully. If they bring up an issue they are having at the other home, suggest they discuss the issue directly with the other parent.
  
• Do not show the children copies of divorce paperwork or discuss the case with them even if the case is over.
  
• Do not do make comments to the children, which suggest they are not safe at the other parent’s home. If there has been domestic violence in the family, you should disclose this to your attorney at the beginning of the case.
  
• Do not attempt to influence the children’s preference by offering them incentives such as cell phones if they come to live at your house. In short, do not offer bribes to your children.
  
• Do not disparage the other parent to your children. Disparagement can be overt. It can also be quite subtle. For example, disparagement can take the form of negative body language or facial expressions while you are talking on the phone to the other parent even if the content of your conversation is neutral.
   

If you follow these suggestions, you will be making an important contribution to your children’s long-term emotional health and self-esteem:

Remember that children who have strong loving relationships with both their mother and father grow up the healthiest. Absent some very unusual facts, every parent has the responsibility to help their children to have positive feelings about both their mother and father. Your child’s emotional development needs to be priority number one.

Robert L. Mues, Father’s Day Reflections, Including Freud and Tongue Biting, The Ohio Family Law Blog June 15, 2008.

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Back child support is a frequent problem in a divorce case particularly if there is a gap between the date a couple separates and the date one of the spouse's files for divorce.

According to a concise, well-written June 2, 2008 post on Attorney Robert Mue's Ohio Family Law Blog, the IRS is treating the federal economic stimulus payment as a tax refund.  If you owe back child support, the IRS will apply the payment to the amount you owe.  So you may receive a smaller payment or no payment at all.  Quoting Attorney Mue's commentary, the New Hampshire Family Law Blog writes:

So what do you do if you and your spouse have filed a joint return and your spouse owes back child support if you want to avoid having the IRS seize your share? Well, you may fall in the category of what the IRS calls an “injured spouse”. To get your share of the stimulus payment, you can file Form 8379, Injured Spouse Allocation. You will then get your share of these payments, and your spouse’s share will be applied to his or her past-due federal or state income taxes or non-tax federal debt such as student loans and child support.

This is something you should take up with your tax-preparer or divorce attorney if you are concerned that your economic stimulus payment may be seized to pay back child support.

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