Wife Demands Husband House But Refuses to Take the Debt

Uh Ruiz Farage, case number 25 04128 DO uh present in the virtual courtroom. Um we have the plaintiff and his attorney, Mr. Block. Uh we have the defendant and her attorney, Miss Wolram. Um we are here on the plaintiff motion to enter the judgment of divorce. Um I have read both the uh motion and the response as well as um the defendant's motion to set aside um the agreement the settlement that was placed on the record. Um Mr. Block, I will have you go first and I have read everything. >> Very good. Thank you. Um this court uh was uh is aware because yes >> it was you were part of the if part of part of the uh what happened at the uh bench trial or the settlement what ended up being a settlement on March 23 of 2026. U there was lengthy negotiations uh with attorney Ben Dyken and myself and the parties. Um I think we spent a couple of hours that morning. I think we met with your honor twice trying to work out, you know, we had two competing appraisals at the time. What is the, you know, the value of the house because defendant was seeking to uh potentially refinance it and uh I know we met with you about a couple of other things uh as well. I think one of them was the uh how much to award or to value the pain and suffering award from the defendants's uh auto accident. Long and the short of it is we reached a settlement on some very thorny issues particularly related to the tax debts the parties owe for a number of years. There's a, as uh you may or may not recall, there's about $74,000 owed to the federal government. Um the state is owed around $10,000 and has put several leans on the marital home. And what Miss Van Djkin and I uh worked on uh at length that morning was trying to come up with a way of resolving it so these parties could walk away from this and truly be divorced. The IRS doesn't care who pays it. It's join several. And the you know originally uh what my client wanted to do was that to sell the house and then pay the debts and um that was uh one of the things that I think in fact I know ended up in the judgment. the defendant wanted to potentially try to refinance the house and then uh we came up with quite a lengthy uh discussion of how that was going to happen, where the money was going to go, how the taxes were going to be handled because in this case there are no children, there are no other assets. You have tax debt and you have a marital home which is worth somewhere between 250,000 and 330,000 depending on which appraisal um you use. Um I think well I don't think we came up with what I would call a comprehensive settlement of how we were going to get this done so the parties could be divorced and move move on. Um what I would call a global resolution thereafter as I as I stated in the motion uh I believe Miss Van Dyken was fired. I prepared a a judgment which I've attached to the motion 12 pages. It's it's pretty uh detailed as far as the taxes and the years and what's going to happen and um it you know it this this judgment needs to uh uh be entered. Um it has been over a year now since this matter was filed. I've read the responses filed by the def uh defendant herself and by her council. U there is not this is nothing new. This tax situation they have [clears throat] parties have known about for a long time. Um the defendant knew that uh uh she worked at the business for 15 years. She helped write checks. I mean for her to come and say I didn't know about them is just simply I don't think real credible. Um to come in now and say well I didn't know about the taxes um or that there was you know back taxes owed um that there was leans on the house. This was all disclosed and lengthy lengthy lengthy discovery. Um, as far as the leans on the house, the summer tax bill, it would have been mailed directly to the house she was living in for heaven's sakes. Um, you know, if you look and read through the judgment, she gets 52.5% plus 25,000 in alimony. Um, if uh, you know, if if the house is sold. I mean, this was not a flippant or a casual negotiations. This was lengthy. This was extensive and I have I believe the defendant fully understood it. If you read the transcript, she says she understood it. She says she understood that she could have gone to trial. I don't know how she gets around the fact that she agreed to this. And my client wants to be divorced. Um it is long overdue that this that this divorce be entered. Um we were prepared the morning of trial. We had subpoenaed people. We subpoenaed the CPA that could have brought in all kinds of tax information for your honor to review. It would be substantial cost. And if if if the court were to grant defendants motion, where would we be? We'd still have a lot of tax debt. 84 approximately,000 of tax debt and a marital home. We would be nowhere different um as far as that goes. I mean, >> I'm going to just interrupt you, Mr. Block. I mean, I we don't need to, I guess, relitigate or litigate, you know, the how we got there. Um because I was present. >> I would just ask uh finally that you enter and sign the judgment today. >> Thank you. And I think these are probably everything is kind of intertwined. So, um do you want to respond um before I turn it over [clears throat] Miss Wolf uh to the motion to set aside there. It's really intertwined. It is. Yeah. >> Yeah. She's saying she didn't knowingly or voluntarily uh you know understand it because of anxiety and disassociation. I would suggest you anyone that comes to court on a divorce trial is going to be anxious and uh you know that's not their normal place to be. Of course they're going to be anxious. But I don't believe that it would be a reason to set this aside. as far as her claiming fraud and misrepresentation by my client for not withholding taxes. Again, the tax thing is nothing new. We knew that the innocent spouse thing was brought up um at in the September of last year, if not before. All of this stuff is new. There's no reason that I could see to set it aside. Um she knew what she was doing. Uh she understood it. She said she wasn't happy about it, but on the other hand, she agreed to it. And under oath, agreed to it, said she understood it under oath. I mean, even the court says uh uh in its uh in the opinion on page or the transcript on page seven, you even thought it was fair and equitable. There's just simply no reason to set this aside. There is no fraud. There is no misrepresentation. >> I just want to correct something you just said or I think you I give you the opportunity to correct it. You said that everything was new. Did you mean everything had >> I'm sorry. Not new. >> Okay. >> There's nothing new in this case. Sorry. >> Spoke. Okay. >> Nothing. There is nothing new. She's presented nothing new. This is all this has been known for at least since September if not last July of 2025. This is all known. >> All right. Um and there also is a motion to adjourn that's pending that um um that Ms. Uh fange filed improper. >> I think that motion had to do with the original date that this case was set to enter the judgment which I I would off going off memory would be the beginning of uh May I think. So it was to move the May date and you moved it to today. >> Okay. All right. So that's been resolved. Okay. >> I think that one's moved. Yes. >> Okay. Thank you so much. I just a lot of cross paper being filed here. All right. Um, so I think I've given you the opportunity to speak on all of the pending motions. Is that correct? >> There's only the only one left is the PO. >> That's a different case. >> Yeah. So, >> okay. So, we're take that we're going to take that separately after we get finished with this one. Okay. Um, Miss Wolf, >> so um obviously this is not my favorite position to be in, your honor. Um, I hate to, you know, come try to, uh, Monday morning quarterback, um, you know, a case, but the more I looked into the information that this client brought to my attention, the [clears throat] more it's not just and it it's just not unequitable, it's practically unconscionable. um she was told that her by her attorney and I and I I again I I hate to have to do this too and so I'm not going to try to say what she was told by her attorney but her understanding from her attorney because I don't know what was said and I don't want to you know um accuse another counsel but her understanding was that that council had talked to the tax representative she was represented that her attorney had connected with the tax representative that they had you know talked about their their uh you individual knowledge, you know, so the legal aspect met with the financial aspect and that they had met of the minds and my client was informed or believed that she was informed that the tax debt would be joint and and several and that she would have that liability and that this was her best option. That never happened. So I have an affidavit now from the tax professional that he never had contact with council. And so when she was my client had the understanding that that meeting of the minds had taken place, it hadn't. And that tax professional has now signed an affidavit that I can provide to the court. It came a little later than the deadline, but he has now stated it would absolutely not be like that is literally what um you know uh uh council stated that the IRS doesn't care who pays. They absolutely do. And that's literally the what an innocent spouse claim is about is that that person would say, "I had no knowledge of this. he believes her innocent spouse claim to have substance and that he believes it's likely to be granted. There's also sort of an >> but let me just ask let me just ask isn't that something she can still do regardless. >> Well, not if she follows through with this because she'll have paid that tax debt. Well, first things actually two things. One, no. It would undercut it because if she files subsequent joint tax returns as the judgment requires her to do, then it invalidates the innocent spouse claim because essentially she will be filing new um joint tax debt, a joint obligation, which she has no knowledge of whether that stuff is now fraudulent, but she'll be waving that knowledge of whether it's fraudulent. In other words, they'll be reconstructing these most recent tax um uh returns that they have to file as joint. And in doing so, it would undercut her pendings uh claim. >> All right. Let me just stop you a moment, >> Mr. Block. Do you have a response to that? >> I I'm not a tax uh uh expert. My understanding on innocent spouse is once the returns are filed and they're not able to pay then is that and they let or they issue the uh the judgment or the levy or whatever they call it. That is when the innocent spouse thing would be applied. I don't believe she can do a uh innocent spouse from a prophylactic uh manner. In other words, do it ahead of time. The returns have to be filed. the tax amount has to be assessed and then potentially there could be an innocent spouse claim asserted. >> But these are amended, right? These the amended one that that's what the judgment calls for her to do amended ones. That's what I'm talking about. >> It would be 22 years. They have not been filed cuz she refused to sign them uh for 2022 2023. The only one that we had talked about amending was 24 because if they filed jointly, Mr. they would get a refund instead an $8,000 refund that could be applied over to the other years. >> Okay. And then the second point is once it's paid, there would be no need to decide the innocent spouse claim and my client will have paid on the debt that she may have been relieved of from the innocent spouse claim being approved. Um, plus interest, right? Because she'll be paying it with a mortgage under the terms of the judgment. So, um, not only will she have paid that and, you know, maybe then found out or pursued that she wouldn't have to, it's not like she can get refunded. They they won't be refunding that. It will have been paid and and my understanding from the tax professional is that they're not going to give it back just because she has been, right? It would still it would be as if she paid it on his behalf. And you know then it would I I guess maybe there'd be an option for sub you know subsequent litigation to try to be in you know indemnified from it but it wouldn't you know if she under the terms of this she wouldn't be refunded that money right so if she's determined that it was not her liability it would have already been paid but just paid on his behalf and not hers and then again plus my client will be penalized with the interest because she'll be paying it with a mortgage um that that's on the house. Well, have you shared this? I mean, have have you and Mr. Block talked about this? >> I did reach out to have a conversation. Um, I it did sound to me that he wasn't super interested in that. Not, you know, saying that he wouldn't be. He just said that it's time for them to be divorced. And I do agree with this. I understand that it's taken some time. Again, I hate being in the position of quarterbacking, you know, Monday morning quarterbacking a seasoned attorney. That's that's the last thing. >> Let me just say this. I mean I think you know um I I went into this frankly preparing or prepared to deny uh the motion and enter the judgment. Um I am concerned about the tax issue um uh because even though everybody agreed on the record um if there was a misunderstanding in terms of the tax implications um I think that I mean that concerns me. Um, so I think what I will do today is I will adjourn. I'll ask that uh Mr. Block uh you you and Miss Wolf Wolf from exchange the information you have. I mean none of us are tax attorneys. None of us know what we're talking about really when it comes. So I think it's important to clarify >> what when what the innocent spouse um when it's available and how it's available. >> Sure. >> Because I do want to preserve that option. >> [snorts] >> Does that make sense, Mr. Block? >> Yeah, I just am unclear what additional information there would be uh to exchange. Um I guess the information about in the biggest concern for me is the availability of the innocent spouse claim for her because I remember I recall we talked about that council and I did in chambers and I just want to make sure that we have not foreclosed that option for her if I enter this judgment. That is my big concern. >> All right. >> So, whoever you need to whatever experts you need to consult with, you know, consult with them and get the answer and then confer and then >> um we can come back. This can be renoticed. We can come back. >> Sure. I'll absolutely be >> I hate I hate to do that, but I I mean I I I do need to find this is equitable and it appeared that way on my on the face. Um, but I need I guess I have questions now that need to be confirmed >> and I can get that to you right away. I'm not looking to delay it in any sense. In fact, this is a limited appearance. So, I plan to get that done as soon as possible, your honor. >> Okay. All right. So, couple weeks. >> Uh, sure. >> All right. >> And just follow up with Tyler for a date. >> Um, well, I'm let me see. Um, when's my next motion date, Tyler? Because I know I've got a conference that's kind of messed up our usual schedule. >> June 5th. >> Okay. So, June, it is motion. >> There any I am so sorry, but that is the um the forum, the family law forum um in Traverse uh not not Traverse City, Traverse Point, the one in Ann Arbor. I was planning to attend that. >> The date after that would be June 18th. We are off that Friday. >> Oh. Um I'm available Friday. I can make that work. >> Mr. Block, do you have a position on that? >> I'd like to stay with the fifth press. Miss Wolf from can attend from um wherever Traver City or wherever you go by Zoom. >> I'll I'll we'll work with you in terms of trying to get you in either at the beginning or wherever you need to be in the morning. >> If I if I can early. I know I have um I'm I'm going to be begging for a Zoom appearance from Judge Gotautle for a similar um thing, but if we can maybe squeeze me in before that and maybe we can resolve it before that. So >> yeah. So um we'll just make a note that we'll take you at 8:30. >> All right. I appreciate it. Thank you, honor. >> Okay. And and again, if we if you can resolve it before then, that's perfect. >> Yeah, no problem. >> All right. I think that deals with >> um does the court want to? I'm I have no problem with um I mean I I certainly can be here but I'm not of council but if you want you can use the same session if you wanted to do the next hearing. I >> Okay, you want to do that. I just I'm not appearing on that. My client will be prosay. >> Okay. All right then. Maybe you just want to step away. >> Yeah. Yeah. I'm going to just step around, but I'm just going to finish putting this in my calendar super fast. [laughter] Oh, no. [clears throat] That's fine. All right. If you need any controls or whatever there be here. Okay. >> Yep. Right. We will.