💔 Appeals Court Vacates Ex-Wife’s $5 Million Divorce Judgment Due to “Double Dipping”

After more than 20 years of marriage, Michael and Rosalia Trethewey filed for divorce in Middlesex County Family Court.

At issue during the proceedings was a “transitional bonus” that Michael, a financial advisor, received to join Wells Fargo in 2018.

Wells Fargo gave Michael the $5 million “bonus” when he joined the company. In exchange, Michael signed a promissory note for the same amount with Wells Fargo as the payee. Each month, for 112 months, the bank would deduct $51,550.04 from the amount owed on the note. (Confusingly, interest was added to the note; so the exact payment breakdown is unclear) If Michael left the company before the end of 112 months (just over nine years) he would have to pay the balance due.

The family court judge treated the $5 million as both part of Michael’s income and a martial asset in her divorce judgment.

The judge held that the $51,550.04 promissory-note deduction was part of Michael’s annual income and awarded a portion of it to Rosalia in the form of alimony. Then the judge ruled that the balance due on the promissory note (at that point about $3.2 million) was a marital asset. Accordingly she awarded 53% of its cash value to Rosalia.

Michael appealed the decision, arguing that the family court judge “double dipped” into the same asset.

The Appeals Court sided with Michael.

First, the justice’s define “double dipping” in the context of a divorce judgment:

The term “double dipping” describes the seeming injustice that occurs when property is awarded to one spouse in an equitable distribution of marital assets and is then also considered as a source of income for purposes of imposing support obligations. (Citations and quotations omitted.)

The Appeals Court concluded that “double dipping” did in fact occur here.

the divorce judgment is erroneous in that the money from the Transitional Bonus was counted for purposes of alimony, and also divided in the property division and a portion awarded to the wife. The remedy for this error is to reverse the award to the wife from the marital estate of what amounted to approximately $1.7 million from the Wells Fargo account.

Additionally, the Appeals Court vacated the judge’s order which required Michael to pay Rosalia’s legal fees of $130,200. The judge did not give Michael an opportunity to oppose those fees in family court and therefor his due process rights were violated by the order.

To read the full opinion, click the document below.