Division of Future Book Royalties in Massachusetts Divorces
It is common for a person to sacrifice to support a spouse who is pursuing an education or developing a career. Unfortunately, if the marriage falls apart after the spouse becomes successful, the divorce can become very contentious. The Massachusetts Appeals Court recently decided a case involving the division of property, including the contractual rights to future payments resulting from a best-selling novel written by the wife.
In Canisius v. Morgenstern, the couple had lived together about two years before they were married. During that time, the woman was not happy with her employment situation. The couple agreed that they would stop equally dividing the living expenses while the woman pursued artistic endeavors. Within a year of the couple moving in together, she had stopped working outside of her artistic endeavors. In less than two years, the husband was paying nearly all of the expenses. The couple married later that year.
While they were married, the couple lived on a limited budget. The husband paid the expenses, as well as his wife’s student loans. The wife wrote and engaged in other artistic pursuits. She ultimately wrote a novel and obtained a publishing contract with Doubleday. Another company optioned other rights, including movie rights. The wife later transferred the copyright of the book to a limited liability company that she owned. She received large initial payments from both companies.
The couple separated. After the separation, the wife engaged in marketing, publicity, and promotional work. When the husband filed for divorce, the book had grossed more than $3 million.
The trial court found that the publishing contract had value upon the book’s final acceptance by the publisher, and the contract’s value was dependent only on how many books were sold. The trial court determined that the book was marital property, but the wife’s vested contractual rights to future payments from the book were too speculative to be included in the divisible marital estate. The trial court also found that royalties were decreasing with sales, and the amount of future earnings was unpredictable.
In its rationale, the trial court acknowledged that the husband had worked full time and even overtime to allow the wife to pursue her career, as well as providing emotional support and feedback on her writing. The trial court found, however, that the contributions were not equal and ordered the wife to pay $570,000 to the husband for his share of the earnings she had received related to the book to date.
The husband appealed the trial court’s treatment of future payments related to the book as too speculative to include in the divisible estate, as well as the unequal division of the estate based on the court’s determination that the contributions had been unequal.
The Appeals Court noted that Massachusetts case law does not require that an interest of uncertain value be excluded from the marital estate. It also distinguished between expectancies with only a theoretical value and the vested contractual rights the wife had in this case. In at least one case, the Supreme Judicial Court has indicated a reluctance to deny a spouse who contributed to acquiring a significant asset the right to share in it just because of uncertainty. The Appeals Court also looked to other jurisdictions, who have found that an interest in future book royalties can be included in the marital estate.
The court found that the trial judge erred in excluding the wife’s interest in future payments from the divisible marital estate and remanded to the trial court to consider that interest a part of the divisible estate. The Appeals Court also suggested that the future interest be divided on an “if and when received” basis. It also noted that the wife’s future efforts, including additional writing and promotional activities, may increase the payments received. The trial court can therefore consider that the parties’ contributions may change as time passes when determining the allocation of future payments. The court may also limit the duration of the division. Since the trial court should have considered the factors related to the future payments, the Appeals Court vacated the order for payment so that the judge could reconsider and possibly recalculate.
The Appeals Court found no error in the trial court’s determination that the parties’ contributions were not equal.
This case illustrates how complex property division can be. If you are facing a divorce, an experienced Boston divorce attorney can fight to get your fair share of the marital estate. Schedule an appointment with the Law Offices of Richard Mucci by calling (781) 729-3999.