The Night Circus and the Division of Future Royalty Payments – Massachusetts

Posted on Posted in asset division, property division

In her debut novel, artist and writer Erin Morgenstern constructed a fantastical tale set in Victorian London involving a magical circus and a pair of dueling lovers. Coming on the heels of the success of the Harry Potter series, The Night Circus received hype as the next literary phenomenon and was highly profitable for Ms. Morgenstern.Thompsons Law 5

Despite the seemingly endless constructs of her imagination, Ms. Morgenstern likely did not conceive that her best-selling novel would be at the forefront of her 2013 divorce case and subsequent appeal, which articulated how future income derived from present contractual rights should be divided.

Ms. Morgenstern married Peter Casinius, a chemical engineer in 2006. Mr. Casinius worked long hours in order to support the household while Ms. Morgenstern focused solely on her artistic endeavors. Ms. Morgenstern wrote The Night Circus during the marriage and by 2010 she had found a publisher for the book. The parties separated in 2011, less than five years after they married. By the time of trial, the wife had sold both the publishing and movie rights to The Night Circus, which had grossed over $3 million in royalties.

The Night Circus was the parties’ most valuable marital asset and became a highly contested issue during trial. The trial judge acknowledged that Mr. Casinius had contributed to The Night Circus by supporting the wife emotionally and financially. However, he found that Ms. Morgenstern’s contractual rights to receive future payments from her best-selling novel were too speculative to include in the marital estate.

The Appeals Court Disagreed

Under M.G.L. Chapter 208, Section 34 the Court may assign to either husband or wife all or any part of the estate of the other. While some interests are so uncertain that they are not subject to division, the Appeals Court differentiated between mere expectancies, such as increased earning potential due to a degree or patents of uncertain value, and the contractual right to receive future royalty payments.

At the time of their divorce, Ms. Morgenstern had enforceable contractual rights to receive future payments from The Night Circus. Since the value of the future payments could not yet be ascertained, the Appeals Court endorsed dividing the asset on an “if and when received” basis.

This case demonstrates that courts are inclined to take an expansive view of what constitutes marital property. Future royalties were added to a growing list of property interests that are subject to division during divorce, including pensions, interests in trusts, and stock options.

The Court recognized that dividing future interests present special challenges. In this case, future earnings from The Night Circus may be enhanced by Ms. Morgenstern’s promotional efforts or by her authoring a subsequent work that generates renewed interest in The Night Circus. In such circumstances, it may be necessary to limit the percentage or duration of the payments to the recipient spouse.

Division of property rights upon divorce requires the expertise and analysis of an attorney that specializes in complex asset division. If you are facing a divorce and have questions about which propriety rights are subject to division, contact Shapiro Law Group, PC to have your questions answered by their team of seasoned attorneys.