Legislature(2001 - 2002)
04/19/2001 01:10 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 196 - RIGHT OF ACTION FOR LEGAL SEPARATION [Discussion of HB 196 also pertains to SB 126, the companion bill.] Number 2456 CHAIR ROKEBERG announced that the next order of business would be HOUSE BILL NO. 196, "An Act establishing a right of action for a legal separation; and amending Rule 42(a), Alaska Rules of Civil Procedure." Number 2433 REPRESENTATIVE FRED DYSON, Alaska State Legislature, sponsor, remarked that the proposed committee substitute for HB 196 is a companion bill to SB 126. Number 2389 REPRESENTATIVE JAMES made a motion to adopt the proposed committee substitute (CS) for HB 196, version 22-LS0718\C, Lauterbach, 4/4/01, as a work draft. There being no objection, Version C was before the committee. REPRESENTATIVE DYSON noted that about 17 other states have statutory provisions for legal separation, which is an intermediate step for couples that are having difficulties in their marriage but either don't want to get a divorce or "don't believe in divorce." Legal separation allows couples to separate their financial affairs and take care of child custody issues and property settlements, while working on reconciliation issues or other personal issues individually. He opined that everyone knows someone who "has been in a messy situation, and ... one partner or the other is acting in quite an irresponsible way and getting the relatively innocent party in lots of financial problems - running up debts, squandering the family estate and resources, and/or incurring some significant liabilities." Version C allows people to separate their affairs before a judge, and gives at least a degree of protection to both parties while "they do whatever else they're going to do with the relationship." Number 2309 KARA MORIARTY, Staff to Senator Gary Wilken, Alaska State Legislature, explained that the concept of a legal separation came about because Senator Wilken [the sponsor of SB 126] had a constituent who was faced with an uncomfortable marriage situation and who wanted to secure the family's assets and child custody provisions without going through a divorce. She added that Senator Wilken envisions that this legislation will provide a "time-out period or a cooling-off period" during which couples can take care of their finances, their child custody issues, and all of the other issues that are dealt with in a divorce. She noted that Senator Wilken has been working to get the legal separation process to statutorily mirror the divorce process, while still allowing the couple to retain the legal status of "married," which may be desired by the parties for financial, social, or religious reasons. REPRESENTATIVE DYSON recounted that he'd watched his parents go through a "huge mess" that this legislation would have helped. He also mentioned that his wife is a marriage-and-family counselor who has mentioned to him that because many religious traditions discourage divorce, it would be good if there were a legal way for couples to separate their affairs. REPRESENTATIVE JAMES noted that according to her experience, joined finances are sometimes what keeps people together if a legal separation is not available. Many times, when people liquidate, they have nothing left, but if the assets can be kept whole, there is a real financial advantage, even if the couple no longer lives together. REPRESENTATIVE DYSON remarked that some Alaskan courts have been "doing this;" the judges have kind of worked "through it." He added that Version C simply puts the procedure in statute and clarifies some associated issues. MS. MORIARTY explained that on December 1, 2000, the Alaska Supreme Court issued an opinion on legal separation in the case of Glasen v. Glasen. She said that this case involved a couple who had gotten a legal separation in 1991, had reconciled, and then had gotten a divorce in 1997. The husband took issue with the fact that the provisions of the legal separation were different from the provisions of the divorce; he appealed the decision all the way to the supreme court, which determined that although legal separations are not defined in statute, there is reference to legal separation in current divorce statutes. Thus the Alaska Supreme Court ruled that courts may grant legal separations, but it also ruled that future courts did not have to abide by the provisions of legal separations or recognize the existence of legal separations. She opined that this ruling justifies the creation of legislation defining legal separation in statute. REPRESENTATIVE BERKOWITZ asked whether Version C was modeled on another state's statute. MS. MORIARTY replied that the bill drafter, as much as possible, simply mirrored Alaska's divorce statute, and had incorporated some language similar to statutes from a couple of other states. Number 2050 REPRESENTATIVE BERKOWITZ noted that family law issues usually [are distilled] down to property rights. He said he was trying to imagine a circumstance in which someone gets, for example, a legal separation and is accruing ongoing benefits. Normally, those ongoing benefits would be shared as part of a property settlement. The individual also could take up with somebody else at the same time. How, he asked, does the legal separation factor all that in? REPRESENTATIVE DYSON, in response, said he assumes provision can be made for that in the case put before the judge by saying, "If there's alienation of affection because of X, Y, and Z, then this hammer falls." He agreed that most of this has to do with property, and said it particularly has to do with incurring debts. He added that everyone is familiar with the notices in the paper that say, for example, "I'm not going to be responsible for any debts except my own." Without the option of legal separation, in a common-property-law state such as Alaska, "you're on the hook," and most people know, he added, of somebody that's married to a "jerk". REPRESENTATIVE BERKOWITZ said he is thinking in terms of pensions, for example; during the course of a separation - and forgetting about a third party - would the [recipient] continue to accrue pension benefits, he asked, or would that be something "hammered out" at the separation hearing? REPRESENTATIVE DYSON opined that such details would be addressed in the separation agreement, for example, if they held common stock. REPRESENTATIVE BERKOWITZ surmised, then, "It's like a divorce in everything but name only." REPRESENTATIVE DYSON agreed. CHAIR ROKEBERG pointed out that many benefit packages are dependent on marital status, such as health insurance. He then asked how property divisions would be handled in situations of legal separation with a subsequent divorce. Number 1855 MS. MORIARTY referred to page 2, lines 14-19, and explained that because the divisions of property and debt are usually the most volatile issues, this language stipulates that the court has to decide if the division of property and debt is an interim or final order. For example, if the court decides that the division is an interim order, the court can also stipulate that five years later it will reexamine the situation again. She remarked that this language provides flexibility to the courts. REPRESENTATIVE DYSON, in response to questions, noted that an interim order is interim until it's changed; somebody (the court) has to referee the situation. [A legal separation] is supposed to be fair; both sides have access to counsel, and the judge gets to hear both sides of the case. With regard to the issues of cost to the state and ongoing legal arguments surrounding the division, he said that unless the case goes on to divorce, "it's only going to happen once," and that it will probable take less time than a divorce because it's generally a mutual agreement. CHAIR ROKEBERG noted that Representative Dyson's testimony that it's only going to happen once contradicts Ms. Moriarty's testimony that the court has the flexibility to reexamine the situation a few years later. He said that while he appreciated the need for a distinction between an interim order and a final order, if the division of property and debts in a legal separation is an interim order, how many times would parties get to keep coming back to court? REPRESENTATIVE JAMES, on the issue of whether there is a benefit to getting a legal separation, said that she thinks there is one, particularly if, for example, people have bought some property and don't have much equity in it, but have the use of it as long as the payments are made; if it were to be liquidated, there would be nothing, but if they can keep it for a while, in time there would be something to divide. She acknowledged that in this example, it is possible that the couple could keep the property even after a divorce, but not very easily. Generally the property has to go to one party or the other, and then there is nothing left for the other party. She noted that the same resolution could occur when a couple owns a business together; in a legal separation, if one party can't buy the other one out due to a lack of funds, the business can remain jointly owned. Then, even if only one person stays to operate it, both parties retain an interest in the business. By contrast, in a divorce only one party can keep an interest. Number 1670 REPRESENTATIVE DYSON recounted that he has seen situations in which one spouse has problems with drugs and/or alcohol, and the other spouse does not want a divorce but does want to secure the family's assets while still maintaining the hope that the spouse with the behavior problem will straighten out. CHAIR ROKEBERG brought up the issue of "forum shopping" - whereby if a party is unhappy with a final decree of separation, he/she attempts to re-litigate property issues in another state. He asked whether Representative Dyson thinks this needs to be addressed. REPRESENTATIVE DYSON replied that [Legislative Legal Services] informed him that this issue is "covered." MS. MORIARTY, in response to the question of whether someone who is legally separated can remarry, explained that the Division of Vital Statistics has confirmed that a person who is legally separated is not allowed to remarry until he/she goes back to the court and finalizes divorce proceedings. She noted that this restriction has prompted the inclusion of Section 5, which mandates that the court shall keep track of how many legal separations are done; after three years, the state registrar may make recommendations regarding the organization of these statistics. She then went on to explain that the Division of Vital Statistics has looked at other states for comparison purposes and relayed that New Hampshire has approximately 6,000 divorces a year (Alaska has 3,500-4,000 divorces) and had 12 legal separations last year - less than 1 percent of what may have been a divorce was instead a legal separation. Hence, she opined, statutory legal separation will probably only benefit a small percentage of Alaskans. Therefore, the costs to the courts should be minimal; she added that the Alaska Court System did not raise cost as a concern. Number 1461 REPRESENTATIVE JAMES said that according to her understanding of legal separation, it would be an option for two people who are fairly compatible but do not want to live together or get remarried. She offered that if the situation later came to a divorce, it would not be as expensive, since by that time the controversial issues of property rights would have already been addressed. CHAIR ROKEBERG called an at-ease from 2:18 p.m. to 2:19 p.m. CHAIR ROKEBERG, after reviewing the Alaska Supreme Court opinion regarding the Glasen v. Glasen case, remarked, "The courts are now making law again, here - another example of it." REPRESENTATIVE DYSON said that he agreed, and that he actively supports members of the committee who take exception to the court's doing that. CHAIR ROKEBERG, returning to the issue of legal separation, asked whether, at one time, it was more commonly available. REPRESENTATIVE DYSON said he does not believe it has ever been enforced in Alaska; he added that it is his understanding that "more states are moving this direction." MS. MORIARTY noted that she did not have any nationwide historical data regarding the availability of legal separation to offer the committee. She added that according to [Legislative Legal Services] people have tried to institute legal separation in the past, but there just wasn't enough momentum to "put it on the books." Number 1197 REPRESENTATIVE JAMES made a motion to adopt Amendment 1, which read: Page 2, line 9: Delete "shall" Insert "may" Number 1190 CHAIR ROKEBERG objected for the purpose of discussion. MS. MORIARTY explained that there was concern that the current language in Version C would prohibit the courts from issuing a divorce instead of a legal separation; by changing "shall" to "may" the courts retain flexibility. CHAIR ROKEBERG surmised that parties have to be in agreement if they are going to enter into a legal separation agreement. REPRESENTATIVE DYSON remarked that it may not always be the case that the parties agree to a legal separation; one spouse may go into court seeking a legal separation, and the other spouse would then have to make the case [against going] forward with the separation. He opined that the court could order a legal separation. CHAIR ROKEBERG sought confirmation that a legal separation could only be entered into on a voluntary basis. MS. MORIARTY, concurring with Representative Dyson, pointed out that Section 1 of Version C says that a husband or a wife may separately or jointly file a complaint for a legal separation. She agreed it could be, just as Representative Dyson suggested, a court-ordered legal separation. CHAIR ROKEBERG surmised, then, that he could file for legal separation instead of divorce simply so that he could maintain access to health benefits from his wife's health insurance plan, regardless of whether his wife agreed. MS MORIARTY noted that it would then be up to his wife to argue before the courts against the legal separation [or file for divorce]. CHAIR ROKEBERG surmised that legal separation could be a powerful tool if a spouse wished to use it to manage joint assets to his/her own benefit. He mentioned that he did have some concerns on this point but did not wish to delay passage of the legislation. Number 1018 CHAIR ROKEBERG withdrew his objection to Amendment 1, and asked whether there were any further objections. There being none, Amendment 1 was adopted. REPRESENTATIVE COGHILL opined that anybody who is going to file for a legal separation still has the intention of protecting the relationship, and is merely seeking protection of the assets, particularly when there are children involved; legal separation could "buy time" to remedy family issues. CHAIR ROKEBERG asked whether there is "a quick way to pull the plug on this thing if there's a reconciliation." REPRESENTATIVE DYSON posited that the petitioner could get a court date to ask the judge to vacate the agreement. MS. MORIARTY concurred that the petitioner would have to go back to court to do that; there are not, however, any specific provisions for vacating the legal-separation agreement in the legislation. She added that the drafter had assured her that this issue did not need to be specified in legislation; the petitioners simply go back to court for a new decision. On the issue of why the Alaska Court System submitted a zero fiscal note, she relayed that Mr. Wooliver said that simply by creating a three-digit code, it will be easy, with the current database, to track the legal separations for reporting purposes. REPRESENTATIVE MEYER remarked that there probably wouldn't be that many legal separations filed. Number 0776 REPRESENTATIVE MEYER moved to report HB 196, version 22- LS0718\C, Lauterbach, 4/4/01, as amended, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 196(JUD) was reported from the House Judiciary Standing Committee.