The Lawletter Vol 37 No 2

Sandra Thomas, Senior Attorney, National Legal Research Group

One of the frequently overlooked sections of the Uniform Interstate Family Support Act ("UIFSA") provides that an award of spousal support can be modified only in the court in which the original order was entered.

The purpose of UIFSA is to provide a means for interstate enforcement of support orders and to address the problem of conflicting support orders by placing continuing exclusive jurisdiction to modify a child support order in the court that has issued the original order so long as the payor, the payee, or the child is still a resident of the original state, or if all parties have consented to the exercise of continuing jurisdiction.  The detailed provisions of the Act govern the enforcement and modification of child support provisions in cases in which all parties have left the original jurisdiction.  The provisions of the Act can be found at Uniform Interstate Family Support Act 2008 §§ 101-905.

Under 42 U.S.C. § 666, which took effect in 1996, States were required to adopt UIFSA by January 1, 1998 or face loss of federal funding for child support enforcement. Every U.S. State has adopted either the 1996 or a later version of UIFSA, though with some variations.

One of the provisions that is contained in the Act, but has not been universally adopted by the States, is § 211, titled "Continuing, Exclusive Jurisdiction to Modify Spousal-Support Order."  That section provides:

(a)        A tribunal of this state issuing a spousal-support order consistent with the law of this state has continuing, exclusive jurisdiction to modify the spousal-support order throughout the existence of the support obligation.

(b)        A tribunal of this state may not modify a spousal-support order issued by a tribunal of another state or a foreign country having continuing, exclusive jurisdiction over that order under the law of that state or foreign country.

(c)        A tribunal of this state that has continuing, exclusive jurisdiction over a spousal-support order may serve as:

(1)        an initiating tribunal to request a tribunal of another state to enforce the spousal-support order issued in this state; or

(2)        a responding tribunal to enforce or modify its own spousal-support order.

Unif. Interstate Family Support Act 2008 § 211 (emphasis added).

Unlike the child support provisions, which provide a means for transferring jurisdiction if all parties have left the State that issued the original order, § 211 states that continuing exclusive jurisdiction to modify spousal support exists only in the court that issued the original order.

A recent case that demonstrates the impact of this provision is Sootin v. Sootin, 41 So. 3d 993 (Fla. Dist. Ct. App. 2010).  In Sootin, the parties were divorced in Florida in 1998, and the Florida court ordered the husband to pay permanent alimony.  The wife subsequently moved to Tennessee.  The husband later also moved to Tennessee.  He then filed a petition in a Tennessee court to register and modify the Florida judgment.

July 3, 2012

Charlene Hicks, Senior Attorney, National Legal Research Group

Environmentally friendly, "green" products have become embedded in our culture, and the "green" concept now extends to the building construction industry.  Indeed, many localities now mandate that building construction projects conform with specified standards of green construction.  Although virtually no reported court cases on green issues in the building construction context have arisen to date, it seems only a matter of time before a new body of law develops around such issues.

Because the engineering and technology behind green construction is so new, the lack of any documented product history poses thorny problems of risk allocation.  If the green building product does not perform at the desired or expected level, should the ensuing cost be borne by the architect/engineer, the contractor, or the owner?  This dilemma has been explained by one commentator as follows:

With the hyper-growth of [Leadership in Energy and Environmental Design ("LEED")] certifications and laws encouraging green building, the construction industry is flush with new products aimed at cashing in on the sustainable movement.  Manufacturers are putting new products on the market, with limited time for research and virtually no product history of performance.  Go to the Energy Star website, and you will find a link to new products, with this note, "products in more than 50 categories are eligible for the ENERGY STAR.  They use less energy, save money, and help protect the environment."  Architects and engineers who specify such products rely on the manufacturer's data but have no actual experience with the product performance.  So who bears the risk of specifying experimental products?  The client or the design professional?  While permeable paving allows more water to return to the earth, how does it hold up under freeze/thaw cycles?  Who pays to tear up a two-foot thick "green" roof to get access to a leaking roof membrane?  What happens when a "grey water" system does not produce enough water to fixtures, or, worse yet, spreads some virus to those who come in contact with "dirty" water?

G. William Quatman & Paula Vaughan, Legally Green: What Lawyers Need to Know About Sustainable Design (47th Annual Meeting of Invited Attorneys) 163, 170 (2008).

In instances where a green component or building fails to fulfill preconstruction expectations, property owners are likely to pursue negligence or breach-of-contract claims against the architect, engineer, or general contractor.  In anticipation of such claims, all parties involved in the green construction project should carefully negotiate the allocation of future liability during the contract negotiation process.

June 19, 2012

Brett Turner, Senior Attorney, National Legal Research Group

In Sfreddo v. Sfreddo, 59 Va. App. 471, 720 S.E.2d 145 (2012), the husband and his brother worked for Triple S, a corporation owned by their mother.  In 2004, the mother decided to give the business to her two sons.  To accomplish this goal, she let each of them purchase 200 shares for par value, which was $1 per share.  The husband's shares therefore cost $200.  The corporation then entered into an agreement to redeem the mother's shares, leaving the sons as sole owners of the company.  "[H]usband, his mother, and his brother all testified they understood the transferring of the company to the brothers to constitute a gift."  Id. at 478, 720 S.E.2d at 149.

The corporation was not valued at the time when the husband bought his shares, but a one-half interest owned by another relative of the husband's had been redeemed one year earlier for $1.5 million.  At divorce in 2011, the husband's one-half interest in the corporation was worth $1.636 million.  The $200 paid by the husband was therefore only a small fraction of the total net worth of his 50% interest.

Upon divorce, the wife argued that the husband's entire interest in Triple S was acquired by purchase during the marriage and that it was therefore marital property.  The husband argued that his interest was a gift, as the consideration paid was nominal compared to the value of the stock transferred.  The trial court held that the husband's mother had intended to make a gift, but it found insufficient evidence that the corporation had intended to make a gift.  It therefore treated the husband's stock as marital property.

On appeal, the Virginia Court of Appeals reversed.  The trial court had held that the husband's mother had intended to make a gift.  The corporation had three directors, the mother, the husband, and his brother, and all three had signed the corporate minutes approving the purchase of stock by the husband and his brother.  There was no evidence that the intent of the husband and his brother was any different from the intent of the mother.  Also, "[t]he vast disparity between sale price and value clearly manifests the board's intent to gift."  Id. at 483, 720 S.E.2d at 151.

If all three directors had donative intent, then the corporation necessarily had donative intent.  Indeed, under the trial court's approach, it is not clear how one could ever prove that a corporation intended to make a gift.  "[T]he trial court's conclusion that there was not a corporate intent to gift the shares to husband and his brother was plainly wrong and unsupported by the evidence."  Id. at 482, 720 S.E.2d at 151.

The question remained whether a gift was disproven by the uncontested fact that the husband had paid $200 for his shares.  The court of appeals held that the $200 was not consideration at all:

"To constitute consideration, a performance or a return promise must be bargained for." Restatement (Second) of Contracts § 71(1) (1981). In a comment, the Restatement elucidates this by stating: "[A] mere pretense of bargain does not suffice, as where there is a false recital of consideration or where the purported consideration is merely nominal. In such cases there is no consideration. . . ." Id. cmt. b. In a comment to another section, the Restatement again explains: "Disparity in value, with or without other circumstances, sometimes indicates that the purported consideration was not in fact bargained for but was a mere formality or pretense. Such a sham or 'nominal' consideration does not satisfy the requirement of § 71." Id. § 79 cmt. d. Moreover, the Restatement provides an illustration highly relevant for this case: "In consideration of one cent received, A promises to pay $600 in three yearly installments of $200 each. The one cent is merely nominal and is not consideration for A's promise." Id. illus. 5.

The Lawletter Vol 37 No 1

Suzanne Bailey, Senior Attorney, National Legal Research Group

"It ain't over 'til it's over."—Yogi Berra 

The U.S. Supreme Court recently considered whether a federal appellate court has the authority to address sua sponte the timeliness of a state prisoner's federal habeas petition.  Relying on prior precedent holding that a federal district court may consider a statute of limitations, Day v. McDonough, 547 U.S. 198, 202 (2006), or exhaustion, Granberry v. Greer, 481 U.S. 129, 134 (1987), defenses not raised by the State in answering the habeas petition at issue in Wood v. Milyard, 132 S. Ct. 1826 (2012), the Court held in an opinion written by Justice Ginsburg that an appellate court has the authority to consider, on its own motion, a forfeited timeliness defense.  However, the Court concluded that the U.S. Court of Appeals for the Tenth Circuit had abused its discretion in denying the petition on the ground of timeliness because the State did not merely forfeit the defense by inadvertent omission, but it knowingly waived the defense by affirmatively declining to assert the statute of limitations defense.  

 Under the Antiterrorism and Effective Death Penalty Act of 1996 ("AEDPA"), Pub. L. No. 104-132, 110 Stat. 1214 (Apr. 24, 1996), which applied to the petition in Milyard, a state prisoner has one year to file a federal petition for habeas corpus relief, starting from "the date on which the judgment became final by the conclusion of direct review or the expiration of the time for seeking such review."  28 U.S.C. § 2244(d)(1)(A).  For a prisoner whose judgment became final before the AEDPA was enacted, the one‑year limitations period runs from the AEDPA's effective date, that is, April 24, 1996.  The one‑year clock is stopped during the time a properly filed application for state postconviction relief is pending.  Id. § 2244(d)(2). 

In Milyard, the state judgment became final on direct review in early 1990.  Thus, the time for filing a federal petition began to run on April 24, 1996 and would expire on April 24, 1997 unless a properly filed application for state postconviction relief was pending in Colorado state court during that period.  The prisoner maintained that he had had such an application pending on April 24, 1996, that is, a motion for postconviction relief that he had filed in 1995 and that remained pending until he filed a second petition in August 2004.  The prisoner argued that the second petition had further tolled the limitations period until February 5, 2007, exactly one year before he filed the federal petition at issue in Milyard. 

In its preanswer response to the federal petition for writ of habeas corpus, the State acknowledged that it was arguable that the 1995 petition had been abandoned before 1997 and therefore did not toll the AEDPA statute of limitations.  However, the State informed the federal district court that it would not challenge the petition on the ground of timeliness.  The State reasserted its position in its full answer and defended on the merits, and the district court issued an opinion denying the petition, in part on the merits and in part for failure to exhaust.  On appeal, the Tenth Circuit directed the parties to brief the timeliness issue and then ruled that the petition was time-barred without addressing the merits.

June 5, 2012

Jeremy Taylor, Senior Attorney, National Legal Research Group

The U.S. Court of Appeals for the First Circuit recently affirmed a $21.06 million judgment, including $16.5 million for pain and suffering, in favor of a plaintiff who suffered severe injuries resulting from her use of "sulindac," the defendant's generic anti-inflammatory drug.  See Bartlett v. Mut. Pharm. Co., No. 10-2277, 2012 WL 1522004 (1st Cir. 2012).  Sulindac is known to cause a hypersensitivity reaction called Stevens-Johnson Syndrome and a related disease called toxic epidermal necrolysis ("SJS/TEN").  In December 2004, the plaintiff's physician prescribed sulindac under the brand name Clinoril for pain in the plaintiff's shoulder, and the plaintiff's pharmacist dispensed generic sulindac.

According to the court, the consequences for the plaintiff were "disastrous."  The plaintiff developed SJS/TEN early in 2005.  The court noted that TEN is diagnosed when 30% or more of the outer layer of skin on a patient's total body surface area has deteriorated, been burned off, or turned into an open wound.  The plaintiff suffered TEN over 60% to 65% of her body.  She was hospitalized for 70 days, including over 50 days in the burn unit.  She suffered permanent injuries, including permanent near-blindness, esophageal burns, vaginal and lung injuries, and disfigurement.  The plaintiff was unable to have sexual relations or to read, drive, or work.  The plaintiff asserted multiple causes of action against the manufacturer in New Hampshire state court.  The defendant removed the case to the federal district court.  After removal, all claims but the plaintiff's defective-design cause of action were dismissed on summary judgment or voluntarily by the plaintiff.

Initially, the court of appeals noted that under the governing New Hampshire law, the plaintiff, who alleged that sulindac was defectively designed, was required to show that the drug was unreasonably dangerous due to its propensity to cause SJS/TEN.  However, she was not required to establish that there existed an alternative, safer design for the drug.  In reaching this conclusion, the court rejected the manufacturer's argument that a safer alternative is an essential element of a design-defect claim, over and above the existence of an unreasonably dangerous product.  Hence, the district court had correctly permitted the plaintiff to establish that the sulindac was in a defective condition because it was unreasonably dangerous due to its propensity to cause SJS/TEN.  Interestingly, on the eve of trial, the defendant abandoned a potential defense that the drug was unavoidably unsafe but was sold with an adequate warning.