Use of experts in divorce litigation

Divorces, like general civil litigation, involve the use of experts in a variety of areas. The two principle issues in any divorce involve parental rights and responsibilities with respect to minor children and the identification and valuation of marital property. Expert testimony can be utilized to establish a variety of facts with respect to the mental health of the children and the parents, as well as the parental capacity of each parent to be responsible for the care and custody of minor children. Familiar experts in the area of parental rights include clinical psychologists, psychiatrists, and counselors, as well as medical doctors. In order to identify and value marital property, divorce trials commonly involve real estate appraisers, certified public accountants, business valuation experts, and a variety of other professionals. Although experts in these areas are common in divorce cases, the use of experts can be applied to a variety of different areas and is only limited by the creativity of counsel and the specific needs of the case.

One of the primary obligations of the court is to “set apart to each spouse the spouse’s property and . . . divide the marital property in proportions the court considers just after considering all relevant factors.” 19-A M.R.S. § 953(1). In order to make a just division, the valuation of marital property is critical. Judges are required to assign values to all marital property in order to make the distribution more comprehensible to the litigants and to facilitate appellate review. Jon Levy, Maine Family Law § 7.7 (LexisNexis 2013 ed.) [hereinafter Levy].

The court must also concern itself with the identity and value of nonmarital property. Under Maine law, all property acquired subsequent to the marriage is presumed marital property. 19-A M.R.S. § 953(3). Often, however, difficult value judgments must be made with respect to nonmarital property, in large part, due to the complexity of the definition adopted by the legislature. Maine Revised Statutes Title 19-A, Section 953(2) describes nonmarital property as follows:

Definition. For purposes of this section “marital property” means all property acquired by either spouse subsequent to the marriage, except:

  1. Property acquired by gift, bequest, devise or descent;
  2. Property acquired in exchange for property acquired prior to the marriage or an exchange for property acquire by gift, bequest, devise or descent;
  3. Property acquired by a spouse after a decree of legal separation;
  4. Property excluded by valid agreement of the parties; and
  5. The increase in value of property acquired prior to the marriage and the increase in value of the spouse’s nonmarital property as defined in paragraphs A to D.

(1) “Increase in value” includes:

(a) Appreciation resulting from market forces; and

(b) Appreciation resulting from reinvested income and capital gain unless either or both spouses had a substantial active role during the marriage in managing, preserving or improving the property.

(2) “Increase in value” does not include:

(a) Appreciation resulting from the investment of marital funds or property in the nonmarital property;

(b) Appreciation resulting from marital labor; and

(c) Appreciation resulting from reinvested income and capital gain if either or both spouses had a substantial active role during the marriage in managing, preserving or improving the property.

Under the statutory definition, increases in value through appreciation due to market forces or reinvested income and capital gain remain nonmarital property unless “either or both spouses had a substantial active role during the marriage in managing, preserving or improving the property.” 19-A M.R.S. § 953(2)(E)(2)(c). A good example of the complexity of valuating the appreciation in nonmarital property is the case of Warner v. Warner, 2002 ME 156, ¶¶ 27–28, 807 A.2d 607. Likewise, increase in the value of nonmarital property through appreciation resulting from marital labor or marital investment is marital property subject to division by the court.

It is absolutely critical to recognize potential nonmarital property in a divorce. Spouses acquire property before the marriage or are gifted or inherit property during the marriage. The Law Court has interpreted Maine’s marital property statute to be nondiscretionary with respect to a party’s nonmarital property. According to 19-A M.R.S. § 9531 “the court shall set apart to each spouse the spouse’s property . . .” This means the court has no discretion in the allocation of nonmarital property, and it must be transferred to the owner of the property. Levy at § 7.5[1]. See Long v. Long, 1997 ME 171, ¶ 9, 697 A.2d 1317 (“The other spouse has no right to an equitable share of the marriage partner’s ‘separate property’ and that property is not subject to the court’s equitable powers of distribution.”). Understanding this fundamental principle can have a dramatic effect on the owner spouse if nonmarital property is not properly identified or valued. Since nonmarital property is not subject to equitable distribution it is removed from the distribution equation and, therefore, allows the owner spouse to retain valuable separate property. Many times the property will take the form of closely held family businesses which are appreciated by marital labor or marital investment during the marriage, gifts, inheritances, and many other property forms which challenge a practitioner’s ability to both identify nonmarital property and tease out the factors resulting in appreciation of nonmarital property.

Initial case assessment must involve a preliminary determination of marital and nonmarital property and whether expert testimony is needed to identify or value the property. In almost every case, there is real estate that needs to be valued by a real estate appraisal. In more complex cases, sophisticated professional analysis is necessary to value pensions, stocks, and appreciation of nonmarital property. These evidentiary challenges are usually met by expert testimony. The introduction of expert testimony is governed by the Maine Rules of Evidence, Rules 701–05, the Maine Rules of Civil Procedure, Rules 26–37, and to a lesser extent, Rule 114 of the Family Division Rules.

This article is the first installment in a series providing general information about the use of experts in divorce litigation.  The entire chapter regarding the Use of Experts in Divorce Litigation is due to be published by MCLE New England in an upcoming book:  A Practical Guide to Divorce in Maine.  The next installment appearing here will be: Requirements of the Maine Rules of Evidence.

The author of this article, Gene R. Libby, is a founding partner of Libby O’Brien Kingsley & Champion, LLC.  Gene is a highly experienced trial lawyer who practices primarily in the areas of family law, civil litigation and criminal defense.

Gene R. Libby

Gene R. Libby

Gene has a rich history of litigation experience over the last 30 years. He has tried over 100 civil and criminal jury cases to verdict. His practice focuses on a wide variety of civil and criminal litigation representing individuals and small businesses, including divorce, real estate disputes, small business litigation, elder law, personal injury, professional… Read more »