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The Legalities Surrounding Non-Heterosexual Couples Uncoupling

 

June is LGBTQ month and this month will, on the 26th, mark the third anniversary of the landmark Supreme Court Decision in Obergefell v. Hodges which case decided that prohibitions against same sex marriage are and always were unconstitutional.  This year another case on discrimination against gay citizens was ruled upon but in the case of Masterpiece Cake the Supreme Court failed to find that a cake maker who refused to bake a wedding cake for a gay couple violated the Colorado Anti-discrimination Act.

Say what you like about the case and religious freedom, but think about how you would feel if a baker refused to bake you a cake because something about your marriage was contrary to their belief system?  Like, say you were an interracial couple?  It seems unthinkable now, but it was the law a brief half century ago that interracial marriages were illegal and there are many religions who still today hold such a marriage to be a sin. It boggles the mind, but some people still remain more equal than others.

It was hard for me, previous to representing a few gay parents, to truly understand how hard it is to live in a world that doesn’t recognize your family structure because it doesn’t condone your relationships.  So for LGBTQ month, I thought I would blog about what used to happen when non-heterosexual couples uncoupled.

If you were in a same sex relationship prior to the legal recognition of same, your entangled life had no easy legal process for disentanglement.  And while no one who practices divorce law would claim that divorce is easy, it is immeasurably simpler to do a straight-up divorce than it ever has been for unmarried couples to separate their lives.  And while there are unmarried straight couples who braved this situation knowingly, they had the option to marry and the majority used to opt for marriage. Until very recently that wasn’t an option for gay couples,

Consider, for example, the situation I had to explain to a person who had been in a long-term relationship with a partner that had spanned nearly 30 years.  They had built a business together, owned several pieces of real estate, had an extensive art collection and had built a seamless life together – even going through a marriage ceremony.  However, they were the same gender and sex, making their situation difficult. Like many couples, one of them was significantly older and the business they “grew” together had been started before the relationship.  In fact, their life together grew out of a boss/ employee relationship.

Let’s call the parties player 1 and player 2.

Like many couples who face divorce which includes a business owned before the marriage by one spouse only, there is a phenomenon that occurs all the time.  The company owned by player 1 is claimed to be entirely separate as in: “What are you talking about? This is my company”. Player 2 may counter with claims that without them, the company couldn’t really operate and that even if Player 1 had started the company, that company was worth far more now because of the efforts of Player 2.

This scenario repeats frequently for divorce attorneys.  But it presents special difficulties when the players are not married to each other.  So, in this case, although everyone knew Player 2 to be an owner of the company, that didn’t help when Player 1 cut off the company bank accounts and credit cards because Player 1 wasn’t on title to the company or the bank accounts.  

As an aside, it is often the case that a company evolves into a wildly successful business after a relationship starts for reasons that are fairly obvious.  Businesses grow in revenue when they are successful and if that success occurs because the second partner/spouse brings something to the table that was lacking in the company before, the growth in value becomes a marital asset under Colorado statutes… if the parties are married. It is not unusual to discover that a company takes off after a second spouse adds a missing ingredient to the mix – which can be a penchant for marketing, HR acumen, fiscal accountability or conversely a vision for expansion.  

All too often, it is the skill set of Player 2 that takes a functioning business and turns it into a real money maker.  

But if Player 2 started out as an employee and the couple never married, you run into two common dilemmas. Upon disintegration of the relationship player 1 inevitably says “we were never married, s/he was just an employee.” (… that I had sex with, lived with, had joint accounts with…. Etc. etc.)

And as callous as that sounds, it is completely predictable and happens virtually all the time.

Dilemma two is that both players tend to think that the other player can be seamlessly replaced, which is almost never true, but I digress.  

If Players 1 and 2 are different genders who start sleeping together and living together and possibly also having children together, Colorado courts will frequently find that they are married at common law.

On the other hand, if Players 1 and 2 are the same gender, they were highly disadvantaged when it came to their breakup – and that is true on some levels even if Player 1 wasn’t taking complete advantage of the fact that the law selectively didn’t recognize the relationship.  Divorces are governed by equitable principles that make it not only easy to divide a business and separate lives, but give you tax advantages in doing so.  For example, you literally cannot divide a 401(k) outside of a divorce without a significant tax penalty.

Back to my case where a very young employee started shagging the boss and morphed into becoming an unpaid second owner of the business.  There was a long history of Player 2 making business deals, Player 2 had full signing authority on the business credit cards and line of credit, but Player 2’s salary never really went up because the parties took out money from the business in the form of distributions to Player 1 in order to minimize taxes.  Since Player 1 and 2 lived together for 30 years, it didn’t really matter to them how the money flowed until the parties separated.

It was only when Player 2 was replaced by a younger model, and asked to leave what had been his home for over a decade, that the inequities became palpable and problematic.

In order to untangle their lives before divorce was even a possibility for  a same sex couple, and since Player 1 was claiming that Player 2 was no more than a friend with benefits (whose benefits had been rescinded), I had the unpleasant task of explaining that in order to assert a claim in the business, we had to assert a multitude of untried (in Colorado) equitable claims such as partition, unjust enrichment (meaning that Player 1 had been unjustly enriched by Player 2’s unpaid work), quantum meruit (that Player 2 was owed back salary, but please note that even if we won on this, there is no make-up for unpaid contributions to Social Security and Medicare) and that the company had been a joint venture.  

Advancing partition, joint venture/ fraud in the inducement/ oral contracts is very difficult to do.  First, you have to win a complex legal argument, then you have to prove damages. When I consulted a business attorney for help, they suggested I secure at least a $50,000 retainer.

And what about the art collection and the house that Player 2 had meticulously decorated?  Well, that would not be covered by any partition action, but would instead fall under a replevin action filed in county court or small claims.  And while let’s just say that many county courts are exceedingly unhappy to have to divide personal property between two legally unrelated persons, the fact that one person can show that they are the primary on a credit card is usually enough for a court to toss such an action and particularly so if the judge is or was of the opinion that same sex marriage is either ridiculous or amoral.

So my words to Partner 1 were couched by the reality that our best bet was to launch a lawsuit, imply that we were serious and that it was going to be extremely expensive to walk away with everything, and hope that common sense and perhaps some twinge of conscience would force a settlement that Partner 2 could live with.

But this is only one part of the overall story.  Frequently shared lives include other parts of family life and although this couple was lucky in that their “children” were pets, other couples are not.  

 

Same Sex parental rights…

Back before second parent adoption was legalized in 2007, same sex parents could not easily both assert their parental rights as one parent might be biological, but both were not.  

One of the first same-sex parenting cases I ever had involved a couple who had adopted two children. Because of the law at the time, they could each only adopt one of their two children.  That meant that when they broke up, one parent was able – for a while – to claim sole parental rights to the child she had adopted but that both of them had raised.

And although that case was the first in which Title 19 was successfully used to assert legal parenting rights for the other parent under the ‘holding-out clause’ in the statute, the case was somewhat of an anomaly.  Many, many parents who have raised children for years (both straight and gay) find that they are second-class citizens when it comes to fighting the rights of a biological parent even when that parent hasn’t lifted a finger or paid a dime in support.  

In fact, in the first appellate case to establish same-sex parents were entitled under the law under Title 19, the trial judge had previously denied a second parent adoption holding that notwithstanding the statute, it was unconstitutional to allow the adoption of a child in the case of two same sex parents.

Now, while a refusal to apply a law to do precisely what that law was enacted to do appeared to me to be highly homophobic (but who knows, maybe the trial judge just wanted the court of appeals to ratify a perfectly valid statute) the truth is that many judges – like the society that appointed them – have very differing opinions about marriage, what it means to be a parent, and about same sex couples.  Meaning, the law may be on your side but it doesn’t mean it will be applied correctly. And the truth is that most trial court decisions are not appealed because appeals are hugely expensive and most appeals are denied anyway.

Again, I digress…

Prior to Obergefell (the U.S. Supreme Court case that held that prohibitions against same sex marriage were inherently unconstitutional) same sex couples raising children in Colorado almost always had one parent who had no legal rights as a parent.  That is because Colorado only recognizes legal parents and it can be complicated as to who is a legal parent. A child who is raised by someone other than their biological parent often will find that they have no rights whatsoever to have the person they know to be their parent stay in their lives.  In fact, there is a travesty of an appellate case that actually says that explicitly. And again…I digress.

 

Same sex marriage in Colorado…

So while much has changed in Colorado (and I’m proud to say that we beat the advent of Obergefell by almost a year) such as recognition of same sex marriage and a presumption of legal parent status to the children of such a marriage, the reality is that biological parents can still sometimes have a significant upper hand over non-biological parents because theory and reality do not always go hand in hand.  

Meaning that while much has changed, much has not.  For myself, I did not set out to be a constitutional crusader in the law and in fact I was not always aware of the constitutional inequities facing same-sex couples.  If someone had asked me, twenty years ago, about same sex marriage ratification, I don’t know what my answer would have been. Like most people my age, I was raised in a faith that had extreme problems with anything other than heterosexual married parents and I just didn’t think all that much about what same sex couples faced.

But it was easy to become an advocate when confronted with the sheer inequity of a client of mine suffering the incredible and inescapable pain of losing a child she had raised from birth.  Her pain resonated with my soul. I, too, was a mother and seeing this up close and personal changed me.

Back to splitting up if you are a same sex couple, while it is undeniably much easier now than it was, we still don’t know if same-sex common law marriages can be retroactive (there is currently a case about this on appeal) and, if so, under what terms.  

What is interesting about this history of how we have treated the gay community, is how easy it is to ignore the social pain that inequality fosters until you just can’t anymore.  I was blown away to discover how closely anti-same sex arguments mirrored miscegenation arguments against interracial marriages from the 1970s. You could have swapped out “interracial” for “same sex” in many, many briefs and cases.  And while much has changed, much hasn’t; apparently we still permit people to deny service to people

Ann Gushurst has been practicing exclusively in Family Law for most of her law career, and her current practice is a mixture of litigation, collaboration and mediation. She was recognized by The Best Lawyers in America©  in 2018 for family law and was selected to Colorado Superlawyers from 2010-2018. She was also included in the list of Top 50 Women Lawyers and Top 100 Lawyers.