How does a practitioner negotiate and draft an order that provides for spousal support to continue beyond the remarriage of the supported spouse? What language, if any, is needed in the judgment to insure that the intentions of the parties are followed?
In re Marriage of Cesnalis (2003) 106 Cal.App.4th 1267; 131 Cal.Rptr.2d 436, the court addresses these concerns.
The Cesnalis’s were marred November 30, 1992. They separated in 1999. The stipulated judgment, prepared by husband’s attorney (after much negotiation), provided in pertinent part as follows:
“Husband shall pay spousal support in the amount of $4,000.00 per month for a period of three years…beginning November 1, 2000 and continuing until either parties’ death or October 20, 2003, whichever occurs first, at which point, spousal support will terminate absolutely. The duration of spousal support will not be modifiable under any circumstances and the termination dates stated herein are absolute, and no court shall have jurisdiction over the issue of spousal support, regardless of whether any motion is made on, before or after October 30, 2003. The parties stipulate that the marriage was one of short duration, and otherwise have bargained carefully for the termination of support contained herein.”
The stipulated judgment for dissolution of marriage was entered on October 25, 2000. The wife remarried on August 6, 2001. The husband, upon learning of wife’s remarriage, moved to terminate spousal support. The trial court, after allowing extrinsic evidence regarding the settlement negotiations, denied husband’s request. Husband appealed.
The Appellate Court confirmed the Trial Court’s decision. First, the Appellate Court cited the relevant Family Code section regarding waiver of the provision for a termination of spousal support obligation upon the remarriage of the supported ex-spouse The Court quoted Family Code Section 4337 which states:
“Except as otherwise agreed by the parties in writing, the obligation of a party under an order for the support of the other party terminates upon the death of either party, or the remarriage of either party.”
The court stated that although no particular or unique language was required to make spousal support continue after the remarriage of the supported spouse, silence on the subject would be insufficient to establish a waiver of the rule that continuing spousal support terminate.
Citing In re Marriage of Thorton (2002) 95 Cal.App.4th 251; 115 Cal.Rptr. 2d 380, the court stated, on page 439, that:
“…remarriage termination is not waived simply because the written agreement fails to include remarriage among the terminating events that are expressly mentioned … (and) the party seeking to overcome a remarriage termination bears the burden of proving, by clear and convincing evidence the requisite written agreement.”
In determining whether or not a waiver occurred in Cesnalis the court indicated that there were two lines of cases. One line followed the analysis in In re Marriage of Glasser, (1986) 181 Cal.App.3d 149; 226 Cal.Rptr. 229, and In re Marriage of Thorton (previously cited). Those cases found that the language used did not waive the remarriage provision for termination of spousal support.
On the other hand, the court cited a line of cases following In re Marriage of Sherman (1984) 162 Cal.App.3d 1132; 208 Cal.Rptr. 832 and Steele v. Langermuir (1976) 65 Cal.App.3d 459; 135 Cal.Rptr. 426, in which the language did constitute a waiver of the spousal support termination provision and therefor susceptible to the admission of extrinsic evidence to determine actual intent. Steele dealt with an agreement that provided for termination upon “death or remarriage” but failed to specify whose death terminated support. Absent more specificity it held that the death language only refered to the death of the supported spouse. The Cesnalis court stated, on Page 439, that the Steele/Sherman line of cases was:
” … more tailored in critical ways. In Steele the agreement provided that spousal support would continue until death, remarriage or the expiration of 20 years and was “‘to be deemed non-modifiable, regardless of any change of circumstances, except for the contingencies contained herein’ … In Sherman, the agreement stated that ‘the amount of support, the method of payment and the terms and conditions of termination of support, all as (previously specified) shall not be modified by the parties or by any court on any grounds.’”
The court found that the language use in the Cesnalis judgment fell more within the lines of the Sherman/Steele cases.
The relevant provision in the stipulated judgment in the Cesnalis judgment spoke of a specified termination date (October 20, 2003) and a specific duration for support that would not be modifiable during that duration. The court stated on Page 440:
“In applying the previously stated principle, how a written agreement may waive Section 4337, … the paragraph does not specifically mention remarriage. But it does say that the only way that the spousal support can end before the three year period elapsed is when one of the parties dies. … (the judgment) reiterates that the three year duration cannot be changed under any other circumstances; it is no stretch to say that a supported spouse’s remarriage would generally be considered the most prominent of such circumstances. Viewed in this light, … (the judgment) cannot be said to be altogether silent on remarriage as a terminating event.”
With regard to the admission of extrinsic evidence the court also found that the Trial Court was correct in admitting same. The court stated on Page 440:
“On the issue of extrinsic evidence, the preceding analysis of paragraph 4 language demonstrates that the paragraph is reasonably susceptible to interpretation as a declaration of intent that support continues beyond remarriage. Because of this reasonable susceptibility, the trial court properly admitted extrinsic evidence on the meaning of paragraph 4 regarding the remarriage.”
The Appellate Court went on to discuss the extrinsic evidence that was admitted at the Trial Court. It was undisputed that the judgment originally drafted by husband’s counsel included the termination of spousal support upon remarriage. Husband contended in a declaration that his then-counsel advised him that taking the provision out regarding the termination of marriage would have no legal effect. Husband also contended in his declaration that at the time of the negotiation, wife’s attorney had stated that although removing same may have no legal effect, that was what wife wanted.
The Appellate Court sustained the Trial Court’s decision in discounting these assertions. The Appellate Court stated on Page 441, that the Trial Court had been correct in finding that if wife and her counsel “…believed that removing the remarriage language from Paragraph 4 would have no legal effect, it would have been nonsensical to bargain for it.”
The Appellate court sustained the finding in the Trial Court that there in fact had been a written waiver of the remarriage termination provision for spousal support.
In dicta, the court indicated its disagreement with the Thorton court’s requirement of language specifically serving as a waiver of the remarriage termination provision for spousal support. Quoting the Thorton case in discussing Family Code Section 4337, the Thorton case states:
“If the parties wish to make a written agreement to waive the remarriage provisions of Section 4337, they must, at a minimum, expressly state that the spouse’s remarriage will not terminate spousal support.”
The Cesnalis court significantly disagrees with Thorton. As the Cesnalis court stated on Page 441:
“We believe this statement goes beyond the requirement of Family Code Section 4337. Taken liberally, this statement would mean that particular words are required to waive Section 4337, and that extrinsic evidence has no relevance in resolving whether a written agreement has waived the Section 4337 remarriage provision. Section 4337 does not go so far as to require a written agreement expressly stating that the support spouse’s remarriage will not terminate spousal support.”
Counsel needs to be vigilant in drafting and negotiating such clauses. Records of the negotiations should be preserved. Cesnalis would suggest that if during the course of negotiations clauses are deleted from such agreements regarding certain issues, particularly termination of spousal support, counsel should not necessarily rely on the un-stated assumption that the ‘current law’ reflects the parties intentions. If there appears to be any hint of language which is “reasonably susceptible to interpretation” of a contrary intent, extrinsic evidence may be allowed to assist the court in determining what the agreement of the parties actually was.
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Monday, January 25, 2010
Cohabitation, the recent case of In re Marriage of Bower
It is common for family law attorneys to hear from clients who are paying spousal support that their ex-spouse is now living with someone and as a result they should not be obligated to continue to pay spousal support. The state legislature, in Family Code Section 4323, addresses the relationship between cohabitation and the need for spousal support. In the recent case of In re Marriage of Bower, (DJDAR 2547/343/4/2002) the reviewing court analyses what constitutes living together in the context of utilizing the presumptions found in Family Code Section 4323.
In fact, Family Code Section 4323 is entitled the “Effect of cohabitation on support.” The section states,in part, as follows:
(a)(1) Except as otherwise agreed to by the parties in writing, there is a rebuttable presumption, effecting the burden of proof, of decreased need for spousal support if the supporting party is cohabiting with a person of the opposite sex. Upon a determination that circumstances have changed, the court may modify or terminate the spousal support….
It is often difficult to determine what evidence needs to be presented in order to trigger this “rebuttable presumption”.
In Bower, there was an October 1995 decree of divorce dissolving a 15-year marriage. Husband was ordered to pay Wife $1,700.00 per month as spousal support.
In February 1997, Husband went to court seeking a reduction of spousal support based upon the fact that Wife was then living with Mr. S and, as such, her need for support (i.e., her expenses) had decreased as per application of Family Code Section 4323. Husband was unsuccessful in his modification and the court did not reduce support. His ex-wife admitted that she had “moved in” with Mr. S but that he was, in essence, a “roommate”. Wife provided checks to the court payable to Mr. S for her portion of living expenses (rent, utilities, food, etc.). Wife stated that pursuant to this arrangement her only decrease in expenses was that her rent had declined a small “little bit”. Wife also indicated, from her income and expense declaration, that her 1997 gross monthly income of $2,690.00 had only increased approximately $100.00 compared to her gross monthly income in October 1995 (the time the original order was made), of $2,586.00.
Based upon the information presented, the trial court, at that time, denied Husband’s request. The court specifically found that Wife and Mr. S’s relationship was only as “roommates” and that in fact she was not “cohabiting” pursuant to the intent of Family Code Section 4323.
In October 2000, Husband again filed a modification requesting either a reduction or termination of spousal support. He again alleged that Wife was now cohabiting with Mr. S and, as such, her need for continued support had decreased pursuant to Family Code Section 4323. This time however, Husband submitted a joint bank statement between Wife and Mr. S indicating that they had maintained a joint savings account. In fact, the parties stipulated that Wife was now cohabiting with Mr. S. The court ruled that Wife was now cohabiting with Mr. S and reduced monthly spousal support to $500.00 per month with a termination of support in a year from the reduction.
Wife appealed this decision.
In the Court of Appeals, Wife contended that in 1997 she had been cohabiting with Mr. S and that, as such, there had not been a change of circumstance with regards to the characterization of her relationship in 2000. She argued that the court absent any change in circumstances had abused its discretion in modifying the existing order. The Court of Appeals rejected this argument. Based upon the 1997 court ruling, it was clear that the court had found that Wife and Mr. S were only living together in the same residence but were not cohabiting.
The trial court’s ruling in 1997 that the parties were “only” roommates sharing expenses, and as such were not cohabiting within the meaning of Family Code Section 4323 was consistent with the legislative intent behind the statute. The court, citing the case of In re Marriage of Thweatt (1979) 96 Cal.App.3d 530, stated:
“When the legislature chose to use ‘cohabiting’ it was selecting a word of particular legal significance that carries more meaning than two persons of the opposite sex living under the same roof”.
The court in Thweatt found no cohabitation where Wife shared expenses with two male boarders and there was “no evidence of a sexual relationship, a romantic involvement, or even a homemaker-companion relationship between either of the men and women.” Wife’s 1997 proceeding was similarly devoid of such evidence. The Appellate Court stated that the evidence presented at Mrs. Bower’s 2000 hearing was substantially different. There was a stipulation by all parties that Wife was now cohabiting with Mr. S and in fact the Appellate Court characterized her relationship with Mr. S as having “ripened into more than just an arrangement for sharing expenses”.
Additional assistance to trial counsel regarding the meaning of what constitutes cohabitation can be found in the case of Steven W. v. Matthew S. (1995) 33 Cal.App.4th 1108, 39 Cal.Rptr.2d 535, wherein the Court said: “Cohabitation has acquired a ‘peculiar and appropriate meaning’ through its use in defining common law marriages. [Citation.] The settled meaning of cohabitation is ‘”living together as husband and wife.”‘ [Citation.] … [T]he California Supreme Court reversed a line of cases which held mere access or opportunity for access sufficient to satisfy the cohabitation requirement. [Citation.] The court specifically incorporated the definition of cohabitation previously used in determining common law marriage:
‘”And by cohabitation is not meant simply the gratification of the sexual passion, ‘but to live or dwell together, to have the same habitation, so that where one lives and dwells there does the other live and dwell also.’”‘ [Citation.]
Cohabitation implies more than a stolen weekend, or a sexual encounter; it is living together in a marital household, sharing day to day life.” (Id. at pp. 1114-1115.)
In addition, there was evidence presented to the court about Wife’s current decreased needs. The trial court found that in the order to show cause filed October 2000, that Wife’s monthly gross income was $3,598.00. In 1997 her gross monthly income was $2,690.00 At the time that the support order was originally made in October 1995 her gross monthly income was $2,586.00. (As such, her gross monthly income had increased $1,000.00 per month in three years). The court found that she currently had $500.00 in cash and $3,000.00 in savings and over $13,000.00 in other liquid assets. The court found that the joint account with Mr. S “which they equally contribute[d] to save up for vacations and trips taken together” was a material change of circumstances. The Appellate Court found that there had not been an abuse of discretion on the trial court’s part by reducing support. The Appellate Court noted that the trial court had determined that Husband had the financial ability to continue to provide support and that Wife was still living below the standard of living that was established during the marriage. The Appellate Court found that the trial court had not abused it discretion by ordering only one additional year of support, to allow Wife the time and income to obtain her own residence without having to invade savings and other assets. The Court noted that the record would have justified an outright termination of spousal support. Essentially, the Appellate Court found that the evidence presented by Husband was sufficient to shift the burden of proof to Wife to show that her expenses had not decreased thereby effecting her need. The trial court’s determination that Wife had not met this burden, was sustained.
The Bower decision tells us that in order to have the court apply the burden shifting inherent in the application of Family Code Section 4323, specific evidence, as to the sharing of expenses and saving money together (i.e., joint bank accounts) is highly valued.
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In fact, Family Code Section 4323 is entitled the “Effect of cohabitation on support.” The section states,in part, as follows:
(a)(1) Except as otherwise agreed to by the parties in writing, there is a rebuttable presumption, effecting the burden of proof, of decreased need for spousal support if the supporting party is cohabiting with a person of the opposite sex. Upon a determination that circumstances have changed, the court may modify or terminate the spousal support….
It is often difficult to determine what evidence needs to be presented in order to trigger this “rebuttable presumption”.
In Bower, there was an October 1995 decree of divorce dissolving a 15-year marriage. Husband was ordered to pay Wife $1,700.00 per month as spousal support.
In February 1997, Husband went to court seeking a reduction of spousal support based upon the fact that Wife was then living with Mr. S and, as such, her need for support (i.e., her expenses) had decreased as per application of Family Code Section 4323. Husband was unsuccessful in his modification and the court did not reduce support. His ex-wife admitted that she had “moved in” with Mr. S but that he was, in essence, a “roommate”. Wife provided checks to the court payable to Mr. S for her portion of living expenses (rent, utilities, food, etc.). Wife stated that pursuant to this arrangement her only decrease in expenses was that her rent had declined a small “little bit”. Wife also indicated, from her income and expense declaration, that her 1997 gross monthly income of $2,690.00 had only increased approximately $100.00 compared to her gross monthly income in October 1995 (the time the original order was made), of $2,586.00.
Based upon the information presented, the trial court, at that time, denied Husband’s request. The court specifically found that Wife and Mr. S’s relationship was only as “roommates” and that in fact she was not “cohabiting” pursuant to the intent of Family Code Section 4323.
In October 2000, Husband again filed a modification requesting either a reduction or termination of spousal support. He again alleged that Wife was now cohabiting with Mr. S and, as such, her need for continued support had decreased pursuant to Family Code Section 4323. This time however, Husband submitted a joint bank statement between Wife and Mr. S indicating that they had maintained a joint savings account. In fact, the parties stipulated that Wife was now cohabiting with Mr. S. The court ruled that Wife was now cohabiting with Mr. S and reduced monthly spousal support to $500.00 per month with a termination of support in a year from the reduction.
Wife appealed this decision.
In the Court of Appeals, Wife contended that in 1997 she had been cohabiting with Mr. S and that, as such, there had not been a change of circumstance with regards to the characterization of her relationship in 2000. She argued that the court absent any change in circumstances had abused its discretion in modifying the existing order. The Court of Appeals rejected this argument. Based upon the 1997 court ruling, it was clear that the court had found that Wife and Mr. S were only living together in the same residence but were not cohabiting.
The trial court’s ruling in 1997 that the parties were “only” roommates sharing expenses, and as such were not cohabiting within the meaning of Family Code Section 4323 was consistent with the legislative intent behind the statute. The court, citing the case of In re Marriage of Thweatt (1979) 96 Cal.App.3d 530, stated:
“When the legislature chose to use ‘cohabiting’ it was selecting a word of particular legal significance that carries more meaning than two persons of the opposite sex living under the same roof”.
The court in Thweatt found no cohabitation where Wife shared expenses with two male boarders and there was “no evidence of a sexual relationship, a romantic involvement, or even a homemaker-companion relationship between either of the men and women.” Wife’s 1997 proceeding was similarly devoid of such evidence. The Appellate Court stated that the evidence presented at Mrs. Bower’s 2000 hearing was substantially different. There was a stipulation by all parties that Wife was now cohabiting with Mr. S and in fact the Appellate Court characterized her relationship with Mr. S as having “ripened into more than just an arrangement for sharing expenses”.
Additional assistance to trial counsel regarding the meaning of what constitutes cohabitation can be found in the case of Steven W. v. Matthew S. (1995) 33 Cal.App.4th 1108, 39 Cal.Rptr.2d 535, wherein the Court said: “Cohabitation has acquired a ‘peculiar and appropriate meaning’ through its use in defining common law marriages. [Citation.] The settled meaning of cohabitation is ‘”living together as husband and wife.”‘ [Citation.] … [T]he California Supreme Court reversed a line of cases which held mere access or opportunity for access sufficient to satisfy the cohabitation requirement. [Citation.] The court specifically incorporated the definition of cohabitation previously used in determining common law marriage:
‘”And by cohabitation is not meant simply the gratification of the sexual passion, ‘but to live or dwell together, to have the same habitation, so that where one lives and dwells there does the other live and dwell also.’”‘ [Citation.]
Cohabitation implies more than a stolen weekend, or a sexual encounter; it is living together in a marital household, sharing day to day life.” (Id. at pp. 1114-1115.)
In addition, there was evidence presented to the court about Wife’s current decreased needs. The trial court found that in the order to show cause filed October 2000, that Wife’s monthly gross income was $3,598.00. In 1997 her gross monthly income was $2,690.00 At the time that the support order was originally made in October 1995 her gross monthly income was $2,586.00. (As such, her gross monthly income had increased $1,000.00 per month in three years). The court found that she currently had $500.00 in cash and $3,000.00 in savings and over $13,000.00 in other liquid assets. The court found that the joint account with Mr. S “which they equally contribute[d] to save up for vacations and trips taken together” was a material change of circumstances. The Appellate Court found that there had not been an abuse of discretion on the trial court’s part by reducing support. The Appellate Court noted that the trial court had determined that Husband had the financial ability to continue to provide support and that Wife was still living below the standard of living that was established during the marriage. The Appellate Court found that the trial court had not abused it discretion by ordering only one additional year of support, to allow Wife the time and income to obtain her own residence without having to invade savings and other assets. The Court noted that the record would have justified an outright termination of spousal support. Essentially, the Appellate Court found that the evidence presented by Husband was sufficient to shift the burden of proof to Wife to show that her expenses had not decreased thereby effecting her need. The trial court’s determination that Wife had not met this burden, was sustained.
The Bower decision tells us that in order to have the court apply the burden shifting inherent in the application of Family Code Section 4323, specific evidence, as to the sharing of expenses and saving money together (i.e., joint bank accounts) is highly valued.
To read more and visit our web site click here: http://la-family-law
Spousal Support After Mandatory Retirement: All That Glitters is Not Gold
The last half of the ’90s have witnessed a dramatic rise in downsizing, enhanced early retirement programs, and voluntary early retirements for the sake of enjoying the “golden years.” Over the last 10 years, appellate courts have made it clear that a spousal support payor who chooses to take advantage of early retirement is still chargeable with imputed income, based on his or her earning capacity.
Another trend has emerged over the last few years, toward limiting and reducing the spousal support burden on payors. The Legislature provided a powerful example of that trend in its 1996 amendment to Family Code § 4320(c), which defines a reasonable time period for purposes of determining the duration of spousal support to be one-half the length of the marriage. At the same time, the Legislature amended Family Code § 4330, to requires trial courts to admonish the parties of their obligation to “make reasonable good faith efforts to become self-supporting.” This amendment makes no distinction between supported and supporting spouses.
These two trends provide the dual focus of the recent appellate decision of In re Marriage of Reynolds (5/19/98) 98 Daily Journal D.A.R. 5279. Prior to Reynolds, no court had addressed the issue of how to whether income may be imputed where the payor spouse retired at full or mandatory retirement age.
The Reynolds court, which ruled on this, received considerable attention for its statement that, “in the instance of a bona fide retirement, a supporting spouse should not be forced to continue working.” Thus, while a spousal support payor cannot retire prematurely without risk of being charged with income attributable to earning capacity, the same is not true of a payor who retires at or after normal retirement age.
In Reynolds, the supporting spouse was 67 at time of retirement; his retirement was deemed “bona fide.” In contrast, in the earlier case of In re Marriage of Sinks (1988) 204 Cal.App.3d 586, 251 Cal.Rptr. 379, the supporting spouse was 62 at the time he retired with a full pension; however, the appellate court affirmed the trial court’s holding that his voluntary retirement was an attempt to shirk his support obligations.
The Sinks panel noted that if the paying spouse’s motives had not been suspect, the fact would have presented an issue of first impression, whether a spouse who is eligible for retirement is nevertheless obligated to continue working to provide spousal support. It was that issue, still of first impression as to payors of normal retirement age, with which the Reynolds court grappled.
In In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 46 Cal.Rptr.2d 8, the retiree was 59, and chose to accept his employer’s offer of early retirement in the form of a lump-sum “golden handshake.” The appellate court held that where a supporting spouse elects to retire early, he or she is chargeable with imputed income based on earning capacity. even where, as in that case, the spouse’s employer virtually forced him into retirement and his motives were not suspect. The panel did not discuss the case of the spouse who retires at normal retirement age, rather than taking early retirement.
However, despite the fact that Reynolds broke new ground by addressing for the first time whether a supporting spouse could retire at age 65 or greater without running the risk of being charged with imputed income, that decision is most notable for its penultimate paragraph, dealing with treatment of private retirement accounts such as IRAs and Keoghs. Improperly citing In re Marriage of Olson (1993) 14 Cal.App.4th 1, 17 Cal.Rptr.2d 480, the Reynolds panel wrote:
Only investment income, not investment principal, should be available to pay spoussal support, especially in this case whether the subject retirement assets represent Husband’s residual share of the community property awarded to him as part of the dissolution. [98 Daily Journal D.A.R. at 5281]
The Olson decision held, among other things, that after a payor spouse reaches age 59-1/2, a trial court may impute income to the payor based on the ability to make withdrawals from an indiividual retirement plan account. In one sentence, the Reynolds court created a conflict of authority, not only with Olson, but with two cases (including one California Supreme Court case) holding that retirement accounts which were formerly community but which have been divided are available for payment of spousal support.
In Olson, Justice Donald B. King addressed an issue of first impression, the extent of trial courts’ discretion to consider accruals in a retirement plan in fixing spousal support. The court limited its discussion to individual retirements plans such as IRAs, Keoghs, and deferred compensation plans, and then considered the federal and state law pertaining to such withdrawals from such retirement plans.
The Olson court then defined divided support payors and the discretion of the trial court into three different classes, based on the age of the payor:
1. Where the payor is under the age of 59-1/2, it would be an abuse of discretion for a trial court to order the amount of spousal support based on funds in a retirement plan, since if those funds were withdrawn they would be subject not only to tax as ordinary income but to a 10 percent penalty.
2. Where the payor is between 59-1/2 and 70-1/2, the payor may make withdrawals from the plan without being subject to the 10 percent penalty. Therefore, if the payor is choosing not to make such withdrawals, the court has discretion to consider whether or not to impute reasonable withdrawals as additional income for purposes of fixing spousal support. However, in exercising its discretion the trial court should consider the public policy favoring making provision for retirement by allowing the funds in the plan to accrue tax-free; that policy should be weighed against all of the other circumstances in the case as set forth in Family Code § 4320.
3. Where the payor is over the age of 70-1/2, the plan participant is penalized if he or she fails to make minimum withdrawals based on life expectancy. Once the participant reaches age 70-1/2, the court has discretion to impute as income an amount greater than the mandatory minimum withdrawal, but must be cautious in doing so in view of the public policy considerations discussed in the previous paragraph.
Reynolds also noted that the trial court could not impute income based on retirement funds “especially in this case where the subject retirement assets represent Husband’s residual share of the community property awarded to him as part of the dissolution.” This statement flatly contradicts the holding of the Supreme Court in In re Marriage of Epstein (1979) 24 Cal.3d 76, 154 Cal.Rptr. 413, as well as In re Marriage of White (1987) 192 Cal.App.3d 1022, 237 Cal.Rptr. 764.
The White court reversed the trial court for refusing to consider the husband’s retirement income from a formerly community property pension in determining his ability to pay spousal support. The White court quoted and relied on the Supreme Court’s ruling in Epstein, which held:
Moreover, even if a future award of spousal support must come from husband’s half of the community property there is no requirement excluding such property as a source of that support. [24 Cal.3d at 91 n.14]
Since Reynolds involved a reversal of the trial court’s ruling, and not just an affirmance of the trial court’s exercise of discretion, it will obviously have a significant impact on spousal support orders where the payor is over age 65 and seeking to reduce spousal support following retirement. As a result, supported spouses who have been unable to become self-supporting and who relied on having a predictable income stream from spousal support in their “golden years” may find that by reverse alchemy those years have turned to lead.
Another trend has emerged over the last few years, toward limiting and reducing the spousal support burden on payors. The Legislature provided a powerful example of that trend in its 1996 amendment to Family Code § 4320(c), which defines a reasonable time period for purposes of determining the duration of spousal support to be one-half the length of the marriage. At the same time, the Legislature amended Family Code § 4330, to requires trial courts to admonish the parties of their obligation to “make reasonable good faith efforts to become self-supporting.” This amendment makes no distinction between supported and supporting spouses.
These two trends provide the dual focus of the recent appellate decision of In re Marriage of Reynolds (5/19/98) 98 Daily Journal D.A.R. 5279. Prior to Reynolds, no court had addressed the issue of how to whether income may be imputed where the payor spouse retired at full or mandatory retirement age.
The Reynolds court, which ruled on this, received considerable attention for its statement that, “in the instance of a bona fide retirement, a supporting spouse should not be forced to continue working.” Thus, while a spousal support payor cannot retire prematurely without risk of being charged with income attributable to earning capacity, the same is not true of a payor who retires at or after normal retirement age.
In Reynolds, the supporting spouse was 67 at time of retirement; his retirement was deemed “bona fide.” In contrast, in the earlier case of In re Marriage of Sinks (1988) 204 Cal.App.3d 586, 251 Cal.Rptr. 379, the supporting spouse was 62 at the time he retired with a full pension; however, the appellate court affirmed the trial court’s holding that his voluntary retirement was an attempt to shirk his support obligations.
The Sinks panel noted that if the paying spouse’s motives had not been suspect, the fact would have presented an issue of first impression, whether a spouse who is eligible for retirement is nevertheless obligated to continue working to provide spousal support. It was that issue, still of first impression as to payors of normal retirement age, with which the Reynolds court grappled.
In In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 46 Cal.Rptr.2d 8, the retiree was 59, and chose to accept his employer’s offer of early retirement in the form of a lump-sum “golden handshake.” The appellate court held that where a supporting spouse elects to retire early, he or she is chargeable with imputed income based on earning capacity. even where, as in that case, the spouse’s employer virtually forced him into retirement and his motives were not suspect. The panel did not discuss the case of the spouse who retires at normal retirement age, rather than taking early retirement.
However, despite the fact that Reynolds broke new ground by addressing for the first time whether a supporting spouse could retire at age 65 or greater without running the risk of being charged with imputed income, that decision is most notable for its penultimate paragraph, dealing with treatment of private retirement accounts such as IRAs and Keoghs. Improperly citing In re Marriage of Olson (1993) 14 Cal.App.4th 1, 17 Cal.Rptr.2d 480, the Reynolds panel wrote:
Only investment income, not investment principal, should be available to pay spoussal support, especially in this case whether the subject retirement assets represent Husband’s residual share of the community property awarded to him as part of the dissolution. [98 Daily Journal D.A.R. at 5281]
The Olson decision held, among other things, that after a payor spouse reaches age 59-1/2, a trial court may impute income to the payor based on the ability to make withdrawals from an indiividual retirement plan account. In one sentence, the Reynolds court created a conflict of authority, not only with Olson, but with two cases (including one California Supreme Court case) holding that retirement accounts which were formerly community but which have been divided are available for payment of spousal support.
In Olson, Justice Donald B. King addressed an issue of first impression, the extent of trial courts’ discretion to consider accruals in a retirement plan in fixing spousal support. The court limited its discussion to individual retirements plans such as IRAs, Keoghs, and deferred compensation plans, and then considered the federal and state law pertaining to such withdrawals from such retirement plans.
The Olson court then defined divided support payors and the discretion of the trial court into three different classes, based on the age of the payor:
1. Where the payor is under the age of 59-1/2, it would be an abuse of discretion for a trial court to order the amount of spousal support based on funds in a retirement plan, since if those funds were withdrawn they would be subject not only to tax as ordinary income but to a 10 percent penalty.
2. Where the payor is between 59-1/2 and 70-1/2, the payor may make withdrawals from the plan without being subject to the 10 percent penalty. Therefore, if the payor is choosing not to make such withdrawals, the court has discretion to consider whether or not to impute reasonable withdrawals as additional income for purposes of fixing spousal support. However, in exercising its discretion the trial court should consider the public policy favoring making provision for retirement by allowing the funds in the plan to accrue tax-free; that policy should be weighed against all of the other circumstances in the case as set forth in Family Code § 4320.
3. Where the payor is over the age of 70-1/2, the plan participant is penalized if he or she fails to make minimum withdrawals based on life expectancy. Once the participant reaches age 70-1/2, the court has discretion to impute as income an amount greater than the mandatory minimum withdrawal, but must be cautious in doing so in view of the public policy considerations discussed in the previous paragraph.
Reynolds also noted that the trial court could not impute income based on retirement funds “especially in this case where the subject retirement assets represent Husband’s residual share of the community property awarded to him as part of the dissolution.” This statement flatly contradicts the holding of the Supreme Court in In re Marriage of Epstein (1979) 24 Cal.3d 76, 154 Cal.Rptr. 413, as well as In re Marriage of White (1987) 192 Cal.App.3d 1022, 237 Cal.Rptr. 764.
The White court reversed the trial court for refusing to consider the husband’s retirement income from a formerly community property pension in determining his ability to pay spousal support. The White court quoted and relied on the Supreme Court’s ruling in Epstein, which held:
Moreover, even if a future award of spousal support must come from husband’s half of the community property there is no requirement excluding such property as a source of that support. [24 Cal.3d at 91 n.14]
Since Reynolds involved a reversal of the trial court’s ruling, and not just an affirmance of the trial court’s exercise of discretion, it will obviously have a significant impact on spousal support orders where the payor is over age 65 and seeking to reduce spousal support following retirement. As a result, supported spouses who have been unable to become self-supporting and who relied on having a predictable income stream from spousal support in their “golden years” may find that by reverse alchemy those years have turned to lead.
Spousal Support in Long-term Marriage
It has been said that in life nothing is certain other than death and taxes. In the family law trade, a third certainty can be added–paying spousal support after a long marriage.
In the recent case of In re Marriage of Schmir, 11/16/05, Div 7, B175397 the court delineated the proper way to terminate support after a long-term marriage.
Judy and Maurice Schmir married in 1964; separated in 1987 and received a Judgment of Dissolution of Marriage in 1989. Maurice was ordered to pay Judy $5,800.00 per month in spousal support. In January 2003, Maurice filed a modification with the court to terminate his spousal support obligation. The hearing on the order to show cause filing occurred on October 2003 (although the court had reduced Maurice’s spousal support payments on a “interim basis” to $2,000.00 per month effective June 2003). At the hearing on October 2003, the court terminated Maurice’s spousal support obligation effective November 1, 2003.
Judy appealed from the trial court’s decision and the court not only reversed the termination of support, but delineated a detailed and specific new support order.
Although Judy had appealed the trial court’s order on several grounds, the appellate court denied all of them, with the exception of the trial court’s failure to afford Judy reasonable advance notice she needed to obtain gainful employment because her spousal support was ending in less than a month.
As the court stated:
“We find no error in the termination order itself. However, under the circumstances presented in this case we conclude the trial court abused its discretion in terminating Judy’s support without affording her a reasonable advance notice and opportunity to secure employment”.
The appellate court gave an excellent primer as to the changing social function of spousal support in the family law context.
The public policy of California regarding spousal support in a divorce following a long-term marriage has progressed from one which “entitled some women to lifelong alimony as a condition of the martial contract of support to one that entitles either spouse to post-dissolution support for only so long as is necessary to become self-supporting”, citing (In re Marriage of Pendleton & Fireman (2000) 24,Cal.4th 39, 53). As the court stated:
“Along with this change in attitude toward spousal support came the judicial recognition that before spousal support can be terminated or reduced, the supporting spouse… must be given fair notice of the expectation of some sufficiency and a reasonable opportunity to achieve such goals”.
The appellate court then discussed two cases, In re Marriage of Richmond (1980) 105 Cal.App.3d 352 and In re Marriage of Gavron (1988) 203 Cal.App.3d 705 that have provided the method for implementation of this view of spousal support.
In Richmond, the trial court ordered the husband to pay spousal support until a date certain at which time it would terminate forever, unless the supported spouse filed an order to show cause prior to said date to extend spousal support. In upholding that type of order, the appellate court in that case found that the supported spouse should bear the burden of coming forth with evidence since that party had better access to the relevant evidence. Thus this procedure, of shifting the burden of showing need prior to a termination date to the supported spouse, became known as a “Richmond Order”.
The Gavron case involved a modification of a support order after a 25-year marriage. Although the trial court granted the requested modification, the appellate court reversed explaining that the supported spouse needed to be affirmatively advised of the need to take steps to become self-supporting or possibly face termination. Thus, this admonishment became known as a “Gavron warning” notifying recipients of active spousal support, that they are expected to become self-supporting. This Gavron warning was codified by Family Code Section 4330, which was mandatory in all support obligations until 1999, when it became a discretionary warning. In Schmir, Maurice had argued to the appellate court that the current situation was distinguishable from Gavron because Judy was, in a sense, under-employed and not needing to obtain employment. The appellate court made short shrift of that distinction. The court stated:
“… We see no logical reason to distinguish between spouses who need to ‘become employable’ and spouses who are already employable. Equity and fairness requires spouses in both classes receive a reasonable notice and opportunity to find employment. How much advance warning is reasonable obviously depends on the circumstances of each case… It is not possible to set a minimum or maximum warning time….
In the present case, however, three weeks notice was clearly too short and even 10 months is problematic”.
In reversing the trial court, the appellate court modified the decision and laid out its own spousal support plan. First, the appellate court reversed the June 2003 order reducing the spousal support from $5,800.00 per month to $2,000.00 per month. The appellate court then modified by striking certain provisions of the court’s order and replaced it with the following:
“Judy’s support continue at the rate of $5,800.00 per month from June 2003 to such time as Judy obtains employment at the rate of at least $2,500.00 per month or ceases to make good faith effort to obtain such employment or attains the age of 65 years, whichever occurs first. If Judy obtains employment at the rate of at least $2,500.00 per month or ceases to make good faith effort to obtain such employment prior to obtaining the age of 65 her support shall be reduced to zero. At the request of Maurice, the trial court shall conduct a hearing to determine whether Judy is making a good faith effort to earn at least $2,500.00 per month. Such hearing, however, shall occur no more frequently than every three months.”
As such, Gavron, Richmond, and now Schmir, present a very discernible road map to terminate spousal support after a long-term marriage. Every award of spousal support should include the descretionary Gavron-type warning. Further, because the trial court may be reluctant to terminate the spousal support after long-term marriage a “Richmond” type order, shifting of the burden to the supported spouse who is in control of the evidence for additional need, may be more agreeable to a trial court.
Finally, even if a party is successful in terminating support, support cannot be abruptly terminated and as such a prospective termination with some future date may be the way to go.
To read more please visit our web site at: http://la-family-law.com
In the recent case of In re Marriage of Schmir, 11/16/05, Div 7, B175397 the court delineated the proper way to terminate support after a long-term marriage.
Judy and Maurice Schmir married in 1964; separated in 1987 and received a Judgment of Dissolution of Marriage in 1989. Maurice was ordered to pay Judy $5,800.00 per month in spousal support. In January 2003, Maurice filed a modification with the court to terminate his spousal support obligation. The hearing on the order to show cause filing occurred on October 2003 (although the court had reduced Maurice’s spousal support payments on a “interim basis” to $2,000.00 per month effective June 2003). At the hearing on October 2003, the court terminated Maurice’s spousal support obligation effective November 1, 2003.
Judy appealed from the trial court’s decision and the court not only reversed the termination of support, but delineated a detailed and specific new support order.
Although Judy had appealed the trial court’s order on several grounds, the appellate court denied all of them, with the exception of the trial court’s failure to afford Judy reasonable advance notice she needed to obtain gainful employment because her spousal support was ending in less than a month.
As the court stated:
“We find no error in the termination order itself. However, under the circumstances presented in this case we conclude the trial court abused its discretion in terminating Judy’s support without affording her a reasonable advance notice and opportunity to secure employment”.
The appellate court gave an excellent primer as to the changing social function of spousal support in the family law context.
The public policy of California regarding spousal support in a divorce following a long-term marriage has progressed from one which “entitled some women to lifelong alimony as a condition of the martial contract of support to one that entitles either spouse to post-dissolution support for only so long as is necessary to become self-supporting”, citing (In re Marriage of Pendleton & Fireman (2000) 24,Cal.4th 39, 53). As the court stated:
“Along with this change in attitude toward spousal support came the judicial recognition that before spousal support can be terminated or reduced, the supporting spouse… must be given fair notice of the expectation of some sufficiency and a reasonable opportunity to achieve such goals”.
The appellate court then discussed two cases, In re Marriage of Richmond (1980) 105 Cal.App.3d 352 and In re Marriage of Gavron (1988) 203 Cal.App.3d 705 that have provided the method for implementation of this view of spousal support.
In Richmond, the trial court ordered the husband to pay spousal support until a date certain at which time it would terminate forever, unless the supported spouse filed an order to show cause prior to said date to extend spousal support. In upholding that type of order, the appellate court in that case found that the supported spouse should bear the burden of coming forth with evidence since that party had better access to the relevant evidence. Thus this procedure, of shifting the burden of showing need prior to a termination date to the supported spouse, became known as a “Richmond Order”.
The Gavron case involved a modification of a support order after a 25-year marriage. Although the trial court granted the requested modification, the appellate court reversed explaining that the supported spouse needed to be affirmatively advised of the need to take steps to become self-supporting or possibly face termination. Thus, this admonishment became known as a “Gavron warning” notifying recipients of active spousal support, that they are expected to become self-supporting. This Gavron warning was codified by Family Code Section 4330, which was mandatory in all support obligations until 1999, when it became a discretionary warning. In Schmir, Maurice had argued to the appellate court that the current situation was distinguishable from Gavron because Judy was, in a sense, under-employed and not needing to obtain employment. The appellate court made short shrift of that distinction. The court stated:
“… We see no logical reason to distinguish between spouses who need to ‘become employable’ and spouses who are already employable. Equity and fairness requires spouses in both classes receive a reasonable notice and opportunity to find employment. How much advance warning is reasonable obviously depends on the circumstances of each case… It is not possible to set a minimum or maximum warning time….
In the present case, however, three weeks notice was clearly too short and even 10 months is problematic”.
In reversing the trial court, the appellate court modified the decision and laid out its own spousal support plan. First, the appellate court reversed the June 2003 order reducing the spousal support from $5,800.00 per month to $2,000.00 per month. The appellate court then modified by striking certain provisions of the court’s order and replaced it with the following:
“Judy’s support continue at the rate of $5,800.00 per month from June 2003 to such time as Judy obtains employment at the rate of at least $2,500.00 per month or ceases to make good faith effort to obtain such employment or attains the age of 65 years, whichever occurs first. If Judy obtains employment at the rate of at least $2,500.00 per month or ceases to make good faith effort to obtain such employment prior to obtaining the age of 65 her support shall be reduced to zero. At the request of Maurice, the trial court shall conduct a hearing to determine whether Judy is making a good faith effort to earn at least $2,500.00 per month. Such hearing, however, shall occur no more frequently than every three months.”
As such, Gavron, Richmond, and now Schmir, present a very discernible road map to terminate spousal support after a long-term marriage. Every award of spousal support should include the descretionary Gavron-type warning. Further, because the trial court may be reluctant to terminate the spousal support after long-term marriage a “Richmond” type order, shifting of the burden to the supported spouse who is in control of the evidence for additional need, may be more agreeable to a trial court.
Finally, even if a party is successful in terminating support, support cannot be abruptly terminated and as such a prospective termination with some future date may be the way to go.
To read more please visit our web site at: http://la-family-law.com
Final Order in Family Law Case Is Not Always Closure
Los Angeles Daily Journal, Vol.117, Issue 219, November 10, 2004
When a hotly contested child custody case spills over into a juvenile dependency case, most family law attorneys will not continue handling the child custody portion of the case in this new arena. Once a dependency matter is commenced, the child custody portion of the family law case is stayed. However, remaining family law issues, such as property division and support are not stayed. Typically, a family law attorney will wait until the dependency case has terminated to resume working on child custody issues. The recent case of In Re Marriage of David M. and Martha M. (2006)DJDAR7065 (”David M.”, suggests that the family Law practitioner may want to have input in the dependency matter before dependency jurisdiction terminates.
The jurisdiction of the dependency court over a child terminates after the dependency court makes an order pursuant to Welfare and Institutions Code Section 362.4. These orders are called exit orders. The exit order not only releases a child from dependency court jurisdiction, but also may provide a specific plan with regard to further custody and visitation for the parties and the child.
However, the dependency court exit order may conflict with the jurisdictional powers of the family law court. This was noticeable in the case of In Re Chantal S. (1996) 13 Cal 4th 196; 51 Cal Reporter 2nd 866. In that case, part of the exit order specified ongoing and open ended counseling as a condition for visitation. Once the exit order transferred the matter to the family law court, the case was now subject to statutory restrictions of the Family Law Act. The counseling provisions in family law, are more restricted in time and type than counseling orders that are made in dependency court. For example, Family Code Section 3190 limits counseling involved in a custody and visitation dispute for a time “not more than one year”. Once the exit order in Chantal S., was addressed in the family law court, the court had to apply counseling as specified under the family law act, and as such the exit order was modified.
A more recent example of the troublesome nature of exit orders for family law attorneys, can be found in the case of David M. In that case the appellate court determined that as a matter of law, an exit order pursuant to Welfare and Institutions Code Section 362.4 is a final custody order, consistent with Montenegro v. Diaz (2001) 26 Ca4t 249. (”Montenegro”) In Montenegro, the court held that in a Stipulated Judgment of custody unless there is a clear statement by the parties that the child custody order is a final order, said child custody order will be treated as a temporary order requiring a reduced burden to modify same. The court in Montenegro held that when modifying a temporary custody order, the burden is only to show what is in the present best interest of the children. However, with a final custody order, the burden to modify custody requires a showing of a substantial change of factual circumstances that effect the best interest of the children.
Subsequent to the Montenegro, courts have expanded the definition of what constitutes a temporary custody order. In the case of In Re Marriage of Richardson (Cal App 4th 941)(2002), the court stated that absent a “clear, affirmative indication that the parties intended the stipulation … to be a final judicial determination of custody, the father was not required to show that a significant change of circumstances justified modifying the custody order.” (page 952)
As a practical matter, the holding in Montenegro, was extremely significant. The court in Montenegro had indicated that child custody matters often involve fluid factual situations. The developmental needs of the children often change over time. As such, from time to time a divorced family may need judicial intervention to address certain situations. The Montenegro case and its progeny have enabled the court to have a mechanism for parties to address the current needs of children, without creating a high evidenciary burden the next time the court needs to be involved.
However, in David M., the appellate court treated the final order from dependency court as a final determination of custody. The facts of David M. are somewhat troubling. The court indicated that the exit order came very shortly after the parties had arrived at a mediated agreement as to visitation. However, the case is silent as to whether or not the parties had made any indication in the mediated agreement that they intended to agree to a final custody order. Had this mediated agreement arisen out of a family law court, it would clearly have been a temporary custody order under Montenegro. Absent a clear and unambiguous statement of the parties intentions, the order would have been characterized as a temporary order of custody. However, this mediation arose within a dependency case and David M. arguably stands for the proposition that a stipulated exit order from dependency court, as a matter of law, is a final custody order.
Family lawyers when confronted with the possibility of a child custody case terminating in dependency court, should be involved as soon as possible in drafting the exit order. In light of David M. and the fact that one needs a substantial change of circumstances to modify an exit order, the exit order should specify the conditions and assumptions in existence upon which the order was based. Further, such assumptions should be labeled as material assumptions, so that if any assumptions fails, then one can argue that the failure constitutes a substantial change of circumstances and that the order can be modified.
David M. is contrary to the trend of family law appellate courts decisions that seek to find a clear indication that the parties in a stipulated custody case intended the order to be a final judicial determination of custody. Exit orders from dependency court can be a serious impediment in any subsequent modification of child custody orders in family law courts, making it more difficult for the parties to properly address the ever changing and future needs of children.
To read more and visit our web site please click here. http://la-family-law.com
When a hotly contested child custody case spills over into a juvenile dependency case, most family law attorneys will not continue handling the child custody portion of the case in this new arena. Once a dependency matter is commenced, the child custody portion of the family law case is stayed. However, remaining family law issues, such as property division and support are not stayed. Typically, a family law attorney will wait until the dependency case has terminated to resume working on child custody issues. The recent case of In Re Marriage of David M. and Martha M. (2006)DJDAR7065 (”David M.”, suggests that the family Law practitioner may want to have input in the dependency matter before dependency jurisdiction terminates.
The jurisdiction of the dependency court over a child terminates after the dependency court makes an order pursuant to Welfare and Institutions Code Section 362.4. These orders are called exit orders. The exit order not only releases a child from dependency court jurisdiction, but also may provide a specific plan with regard to further custody and visitation for the parties and the child.
However, the dependency court exit order may conflict with the jurisdictional powers of the family law court. This was noticeable in the case of In Re Chantal S. (1996) 13 Cal 4th 196; 51 Cal Reporter 2nd 866. In that case, part of the exit order specified ongoing and open ended counseling as a condition for visitation. Once the exit order transferred the matter to the family law court, the case was now subject to statutory restrictions of the Family Law Act. The counseling provisions in family law, are more restricted in time and type than counseling orders that are made in dependency court. For example, Family Code Section 3190 limits counseling involved in a custody and visitation dispute for a time “not more than one year”. Once the exit order in Chantal S., was addressed in the family law court, the court had to apply counseling as specified under the family law act, and as such the exit order was modified.
A more recent example of the troublesome nature of exit orders for family law attorneys, can be found in the case of David M. In that case the appellate court determined that as a matter of law, an exit order pursuant to Welfare and Institutions Code Section 362.4 is a final custody order, consistent with Montenegro v. Diaz (2001) 26 Ca4t 249. (”Montenegro”) In Montenegro, the court held that in a Stipulated Judgment of custody unless there is a clear statement by the parties that the child custody order is a final order, said child custody order will be treated as a temporary order requiring a reduced burden to modify same. The court in Montenegro held that when modifying a temporary custody order, the burden is only to show what is in the present best interest of the children. However, with a final custody order, the burden to modify custody requires a showing of a substantial change of factual circumstances that effect the best interest of the children.
Subsequent to the Montenegro, courts have expanded the definition of what constitutes a temporary custody order. In the case of In Re Marriage of Richardson (Cal App 4th 941)(2002), the court stated that absent a “clear, affirmative indication that the parties intended the stipulation … to be a final judicial determination of custody, the father was not required to show that a significant change of circumstances justified modifying the custody order.” (page 952)
As a practical matter, the holding in Montenegro, was extremely significant. The court in Montenegro had indicated that child custody matters often involve fluid factual situations. The developmental needs of the children often change over time. As such, from time to time a divorced family may need judicial intervention to address certain situations. The Montenegro case and its progeny have enabled the court to have a mechanism for parties to address the current needs of children, without creating a high evidenciary burden the next time the court needs to be involved.
However, in David M., the appellate court treated the final order from dependency court as a final determination of custody. The facts of David M. are somewhat troubling. The court indicated that the exit order came very shortly after the parties had arrived at a mediated agreement as to visitation. However, the case is silent as to whether or not the parties had made any indication in the mediated agreement that they intended to agree to a final custody order. Had this mediated agreement arisen out of a family law court, it would clearly have been a temporary custody order under Montenegro. Absent a clear and unambiguous statement of the parties intentions, the order would have been characterized as a temporary order of custody. However, this mediation arose within a dependency case and David M. arguably stands for the proposition that a stipulated exit order from dependency court, as a matter of law, is a final custody order.
Family lawyers when confronted with the possibility of a child custody case terminating in dependency court, should be involved as soon as possible in drafting the exit order. In light of David M. and the fact that one needs a substantial change of circumstances to modify an exit order, the exit order should specify the conditions and assumptions in existence upon which the order was based. Further, such assumptions should be labeled as material assumptions, so that if any assumptions fails, then one can argue that the failure constitutes a substantial change of circumstances and that the order can be modified.
David M. is contrary to the trend of family law appellate courts decisions that seek to find a clear indication that the parties in a stipulated custody case intended the order to be a final judicial determination of custody. Exit orders from dependency court can be a serious impediment in any subsequent modification of child custody orders in family law courts, making it more difficult for the parties to properly address the ever changing and future needs of children.
To read more and visit our web site please click here. http://la-family-law.com
Family Code Section 3040
Often in child custody litigation, the court has to make a tough call as to the physical time share. Family law litigators often advise clients not to demonstrate a “bad attitude” in conjunction with the sharing of custody, or exercise of visitation of children with the other party. A demonstration of “bad attitude” by a party can not only be one of the compelling reasons why the court doesn’t award that party custody, but as demonstrated in the recent Appellate case of In re Marriage of Dupre (CO 46938) same can also lead to monetary awards against a party and their attorney.
In the case of In re Marriage of Dupre, the mother had shared custody of the parties’ 9-year old daughter J. However, upon learning that J. had had some inappropriate sexual contact with the 8-year old daughter of mother’s boyfriend, father sought an ex parte custody order suspending mother’s custody/visitation rights with the minor child. The ex parte order was granted, pending a Family Court Services (FCS) investigation. The investigation report by FCS was released three days later and the report indicated that J. had not been sexually molested but had engaged in mutual sexual experimentation with a like-age child, a normal part of childhood sexual development.
Mother then went to court and requested that the FCS report recommendation be adopted and her custodial rights restored. The Trial Court adopted the recommendation of the FCS report, and the court also issued a mandatory Order to Show Cause for Family Code Section 3027.1 sanctions.
Family Code Section 3027.1 provides that if false allegations of child abuse or neglect are made during a child custody proceeding, and that the person making the accusation knew it to be false at the time the accusation was made, the court may impose monetary sanctions against the party, a witness or the party’s attorney.
By the time the sanctions motion was heard, the original judge issuing the Order to Show Cause had retired. At the sanctions hearing, the attorney for the father argued that Family Code Section 3027.1 required that in the underlying custody hearing there had first to be a finding that the allegations of abuse were false and knowingly made. Since such a determination had never been made, father contended that mother was now precluded from seeking Family Code Section 3027.1 sanctions. The mother objected to that interpretation of the code section. Mother also requested that the court take judicial notice of the entire FCS report.
The trial court denied the appropriateness of the issuance of the Order to Show Cause for Family Code Section 3027.1 sanctions because “the issue of falsity must be adjudicated in the underlying custody proceeding”. Further, the trial court denied mother’s request that the court take judicial notice of the FCS report in that only the recommendation had been adopted for the court’s order, and the rest of the report consisted of hearsay information.
Mother appealed, and the Appellate Court granted mother’s right to proceed under Family Code Section 3827.1, but denied mother’s request for the court to take judicial notice of the entire FCS report.
First, after discussing some procedural problems in mother’s request for appellate review, the Appellate Court stated that a simple reading of Family Code Section 3027.1, does not require that the issue of falsity of the accusation first be determined in the underlying custody hearing. As the court states:
“Nothing in the wording of Section 3027.1 supports an interpretation requiring the finding underlying the sanctions to be made during the custody proceeding. To read such a requirement into the statute runs afoul of our duty to refrain from rewriting a statute ‘to make express and intention that did not find itself expressed in the language of that provision’. (citing cases)… The statute requires a false statement be made during the child custody proceeding… The statute does not require a falsity to be established during the child custody proceeding.”
The Appellate Court also noted that the statute specifically refers to “any person” (witnesses or attorneys). The Appellate Court, favorably quoting extensively from mother’s appellate brief, stated:
“It makes no sense that the legislature would have intended the parties to a temporary custody proceeding to stand aside while non-party litigants and/or a combination of party and non-party litigants to a Section 3027.1 sanction motion tried the issue of falsity and knowing falsity in that custody proceeding, before the temporary custody proceeding could be concluded. …we find mother’s argument persuasive.”
However, the Appellate Court did not feel that the trial court had abused its discretion by not taking judicial notice of the entire FCS report. The Appellate Court succinctly stated so as follows:
“… We find no error. Judicial notice is the recognition and acceptance by the court of the existence of a matter of law or fact that is relevant…. However, while the courts are free to take judicial notice of the existence of each document in the court file, they may not take judicial notice of the truth of hearsay statements in …. court files. The courts may not take judicial notice of allegations and affidavits, declarations and probation reports in court records because such matters are reasonably subject to dispute and therefore require formal proof (citing cases).”
The Appellate Court remanded the Order to Show Cause for sanctions per Family Code Section 3027.1 back to the trial court. A factual determination as to whether father knew the allegations to be false will now have to be made.
The court has other tools at its disposal ifone party demonstrates a “bad attitude” regarding custody awards. Pursuant to Family Code Section 3027.5(b), the court can order supervised visitation to a party making false allegations of sexual abuse.
This bad attitude standard can also be a factor in the court making the overall determination of custody. As Family Code Section 3040 states, the first preference for granting custody of a minor is to the parties jointly. However, the next preference is to either party. The only statutory guideline given to the court in determining which party should be awarded custody is stated as follows:
“In making an order granting custody to either parent, the court shall consider,… which parent is more likely to allow the child frequent and continuing contact with the non-custodial parent…”.
Family Code Section 3040 is often referred to as the “friendly parent provision”. A party who demonstrates a “bad attitude” towards the other party, which manifests itself in the diminution of contact with the child/children of the relationship, may very well fail this statutory te
In the case of In re Marriage of Dupre, the mother had shared custody of the parties’ 9-year old daughter J. However, upon learning that J. had had some inappropriate sexual contact with the 8-year old daughter of mother’s boyfriend, father sought an ex parte custody order suspending mother’s custody/visitation rights with the minor child. The ex parte order was granted, pending a Family Court Services (FCS) investigation. The investigation report by FCS was released three days later and the report indicated that J. had not been sexually molested but had engaged in mutual sexual experimentation with a like-age child, a normal part of childhood sexual development.
Mother then went to court and requested that the FCS report recommendation be adopted and her custodial rights restored. The Trial Court adopted the recommendation of the FCS report, and the court also issued a mandatory Order to Show Cause for Family Code Section 3027.1 sanctions.
Family Code Section 3027.1 provides that if false allegations of child abuse or neglect are made during a child custody proceeding, and that the person making the accusation knew it to be false at the time the accusation was made, the court may impose monetary sanctions against the party, a witness or the party’s attorney.
By the time the sanctions motion was heard, the original judge issuing the Order to Show Cause had retired. At the sanctions hearing, the attorney for the father argued that Family Code Section 3027.1 required that in the underlying custody hearing there had first to be a finding that the allegations of abuse were false and knowingly made. Since such a determination had never been made, father contended that mother was now precluded from seeking Family Code Section 3027.1 sanctions. The mother objected to that interpretation of the code section. Mother also requested that the court take judicial notice of the entire FCS report.
The trial court denied the appropriateness of the issuance of the Order to Show Cause for Family Code Section 3027.1 sanctions because “the issue of falsity must be adjudicated in the underlying custody proceeding”. Further, the trial court denied mother’s request that the court take judicial notice of the FCS report in that only the recommendation had been adopted for the court’s order, and the rest of the report consisted of hearsay information.
Mother appealed, and the Appellate Court granted mother’s right to proceed under Family Code Section 3827.1, but denied mother’s request for the court to take judicial notice of the entire FCS report.
First, after discussing some procedural problems in mother’s request for appellate review, the Appellate Court stated that a simple reading of Family Code Section 3027.1, does not require that the issue of falsity of the accusation first be determined in the underlying custody hearing. As the court states:
“Nothing in the wording of Section 3027.1 supports an interpretation requiring the finding underlying the sanctions to be made during the custody proceeding. To read such a requirement into the statute runs afoul of our duty to refrain from rewriting a statute ‘to make express and intention that did not find itself expressed in the language of that provision’. (citing cases)… The statute requires a false statement be made during the child custody proceeding… The statute does not require a falsity to be established during the child custody proceeding.”
The Appellate Court also noted that the statute specifically refers to “any person” (witnesses or attorneys). The Appellate Court, favorably quoting extensively from mother’s appellate brief, stated:
“It makes no sense that the legislature would have intended the parties to a temporary custody proceeding to stand aside while non-party litigants and/or a combination of party and non-party litigants to a Section 3027.1 sanction motion tried the issue of falsity and knowing falsity in that custody proceeding, before the temporary custody proceeding could be concluded. …we find mother’s argument persuasive.”
However, the Appellate Court did not feel that the trial court had abused its discretion by not taking judicial notice of the entire FCS report. The Appellate Court succinctly stated so as follows:
“… We find no error. Judicial notice is the recognition and acceptance by the court of the existence of a matter of law or fact that is relevant…. However, while the courts are free to take judicial notice of the existence of each document in the court file, they may not take judicial notice of the truth of hearsay statements in …. court files. The courts may not take judicial notice of allegations and affidavits, declarations and probation reports in court records because such matters are reasonably subject to dispute and therefore require formal proof (citing cases).”
The Appellate Court remanded the Order to Show Cause for sanctions per Family Code Section 3027.1 back to the trial court. A factual determination as to whether father knew the allegations to be false will now have to be made.
The court has other tools at its disposal ifone party demonstrates a “bad attitude” regarding custody awards. Pursuant to Family Code Section 3027.5(b), the court can order supervised visitation to a party making false allegations of sexual abuse.
This bad attitude standard can also be a factor in the court making the overall determination of custody. As Family Code Section 3040 states, the first preference for granting custody of a minor is to the parties jointly. However, the next preference is to either party. The only statutory guideline given to the court in determining which party should be awarded custody is stated as follows:
“In making an order granting custody to either parent, the court shall consider,… which parent is more likely to allow the child frequent and continuing contact with the non-custodial parent…”.
Family Code Section 3040 is often referred to as the “friendly parent provision”. A party who demonstrates a “bad attitude” towards the other party, which manifests itself in the diminution of contact with the child/children of the relationship, may very well fail this statutory te
What is Meant by “Joint Legal Custody”
To the inexperienced practitioner, legal custody is an afterthought. These attorneys will assist their clients in fine-tuning the physical custody provisions of their judgment or order, but pay little attention to the details of the legal custody order — sole or joint; decision-making to require agreement or not?
The recent United States Supreme Court case of Elk Grove USD v. Newdow (6/14/2004) 04 DJDAR 7022, illustrates the significance of the legal custody portion of a custody decree. In Elk Grove, the parties had a California custody decree which provided for joint legal custody. However, the decree also provided that if a dispute arose, the mother retained the final decision-making ability.
As has been well-publicized, the father wanted to file a lawsuit challenging the requirement of his daughter’s school district that the Pledge of Allegiance be recited, on the ground that the phrase “under God” was in essence the State mandating a particular form of religious practice. The mother refused to participate in or agree to the lawsuit.
The Elk Grove plurality deemed this difference between the parties a dispute over a legal custodial issue. Accordingly, in its plurality decision, the United States Supreme Court held that because the mother, pursuant to court order, held the ultimate decision-making authority in the event of a dispute, the father was legally incapable of deciding to file a lawsuit regarding this issue and lacked standing. That plurality opinion stated:
We conclude that, having been deprived under California law of the right to sue as next friend, Newdow lacks prudential standing to bring this suit in federal court. [04 DJDAR at 7025]
Thus, the Supreme Court was able to avoid the church/state issues presented by this case and left a discussion of same to the concurring opinions.
What are the implications of Elk Grove for the family law practitioner? Clearly, an award of “joint legal custody,” absent more, is now inadequate to preserve a parent’s right to participate in decisions which that parent believes are important to the best interests of the child.
This concept was previously suggested in the case of In re Marriage of Neal (1979) 92 Cal.App.3d 834, which observed that an award of joint legal custody was “ephemeral and essentially meaningless,” when one party has been awarded sole physical custody, but both parents have been awarded joint legal custody.
Elk Grove has given much added weight to the suggestion of the Neal Court. It is now incumbent upon any parent who is seeking meaningful joint legal custody to insist that the parameters of joint legal custody be articulated by the trial court..
Joint legal custody itself is defined in Family Code § 3003, which provides:
Joint legal custody means that both parents shall share the right and responsibility to make the decisions relating to the health, education, and welfare of the child.
To give meaning and “teeth” to an award of joint legal custody, counsel should look to and invoke Family Code § 3083, which states:
In making an order of joint legal custody, the court shall specify the circumstances under which the consent of both parents is required to be obtained in order to exercise legal control of the child and the consequences of the failure to obtain mutual consent. In all other circumstances, either parent acting alone may exercise legal control of the child. An order of joint legal custody shall not be construed to permit an action that is inconsistent with the physical custody order unless the action is expressly authorized by the court.
In essence and in substance, Family Code § 3083 provides that if no one specifies the particulars of what joint legal custody will mean, there is a “default”. The default status is that either parent may make the decisions with reference to the health, education or welfare of the minor child. Hence, either parent could consent to cosmetic surgery for the minor child, acquire a driver’s license for the minor child, change a child’s major in school, change the child’s name, or litigate whether the child should recite the pledge of allegiance in school referencing the word “God” Given the randomness of people’s action, the result of such unilateral activity can be rather chaotic.
But merely citing the court to Family Code § 3083 is not sufficient. Counsel and client should be in a position to articulate the circumstances and areas in which joint consent should be required. These circumstances include, but are by no means limited to:
* Major medical decisions (excluding emergencies).
* Change of school.
* Change of academic pursuits within school (i.e., change of major, etc.).
* Beginning a course of psychotherapy.
* Cosmetic surgery.
* Enrollment in extracurricular sports activities (contact football, hockey, judo, etc.).
* Signing of report cards.
* Acquisition of passports.
* Signing contracts on behalf of the child (for theatrical services, etc.).
* Signing for the driver’s license of the child.
* Being nominated as a guardian ad litem to litigate causes of action on behalf of the minor child (as in Elk Grove).
The above list is by all means not complete. Practitioners should discuss the parameters of legal custody well prior to the date of the custody hearing, and not discussed literally on the “courthouse steps”.
In addition, counsel should apprise the client that, along with the many benefits of joint legal custody, come certain statutory liabilities which may accrue to a parent who shares joint legal custody, although that parent does not share physical custody.
By way of only one example, Civil Code § 1714.1 provides that a parent in “custody and control” of a minor is liable up to $25,000.00 in damages resulting from acts of the minor which cause death, physical injury, property damage. Similarly, Education Code § 48904 provides for a parent’s liability for a child’s willful misconduct or vandalism of school property up to an amount of $10,000.00. And, Penal Code § 490.5(b) provides that a parent having “control or custody” of a minor can be jointly and severally liable with the minor for shoplifting or theft of books from a library.
While these imputed liability sections speak to liability based upon presumably physical custody an argument could be made extending same to a joint legal parent. If both parents have authorized a minor to acquire a driver’s license, both parents may share some responsibility with reference to that minor should same cause an accident.
As Elk Grove suggests, “legal custody” may have a broad, wide ranging impact.
To read more and visit our web site click here. http://la-family-law.com
The recent United States Supreme Court case of Elk Grove USD v. Newdow (6/14/2004) 04 DJDAR 7022, illustrates the significance of the legal custody portion of a custody decree. In Elk Grove, the parties had a California custody decree which provided for joint legal custody. However, the decree also provided that if a dispute arose, the mother retained the final decision-making ability.
As has been well-publicized, the father wanted to file a lawsuit challenging the requirement of his daughter’s school district that the Pledge of Allegiance be recited, on the ground that the phrase “under God” was in essence the State mandating a particular form of religious practice. The mother refused to participate in or agree to the lawsuit.
The Elk Grove plurality deemed this difference between the parties a dispute over a legal custodial issue. Accordingly, in its plurality decision, the United States Supreme Court held that because the mother, pursuant to court order, held the ultimate decision-making authority in the event of a dispute, the father was legally incapable of deciding to file a lawsuit regarding this issue and lacked standing. That plurality opinion stated:
We conclude that, having been deprived under California law of the right to sue as next friend, Newdow lacks prudential standing to bring this suit in federal court. [04 DJDAR at 7025]
Thus, the Supreme Court was able to avoid the church/state issues presented by this case and left a discussion of same to the concurring opinions.
What are the implications of Elk Grove for the family law practitioner? Clearly, an award of “joint legal custody,” absent more, is now inadequate to preserve a parent’s right to participate in decisions which that parent believes are important to the best interests of the child.
This concept was previously suggested in the case of In re Marriage of Neal (1979) 92 Cal.App.3d 834, which observed that an award of joint legal custody was “ephemeral and essentially meaningless,” when one party has been awarded sole physical custody, but both parents have been awarded joint legal custody.
Elk Grove has given much added weight to the suggestion of the Neal Court. It is now incumbent upon any parent who is seeking meaningful joint legal custody to insist that the parameters of joint legal custody be articulated by the trial court..
Joint legal custody itself is defined in Family Code § 3003, which provides:
Joint legal custody means that both parents shall share the right and responsibility to make the decisions relating to the health, education, and welfare of the child.
To give meaning and “teeth” to an award of joint legal custody, counsel should look to and invoke Family Code § 3083, which states:
In making an order of joint legal custody, the court shall specify the circumstances under which the consent of both parents is required to be obtained in order to exercise legal control of the child and the consequences of the failure to obtain mutual consent. In all other circumstances, either parent acting alone may exercise legal control of the child. An order of joint legal custody shall not be construed to permit an action that is inconsistent with the physical custody order unless the action is expressly authorized by the court.
In essence and in substance, Family Code § 3083 provides that if no one specifies the particulars of what joint legal custody will mean, there is a “default”. The default status is that either parent may make the decisions with reference to the health, education or welfare of the minor child. Hence, either parent could consent to cosmetic surgery for the minor child, acquire a driver’s license for the minor child, change a child’s major in school, change the child’s name, or litigate whether the child should recite the pledge of allegiance in school referencing the word “God” Given the randomness of people’s action, the result of such unilateral activity can be rather chaotic.
But merely citing the court to Family Code § 3083 is not sufficient. Counsel and client should be in a position to articulate the circumstances and areas in which joint consent should be required. These circumstances include, but are by no means limited to:
* Major medical decisions (excluding emergencies).
* Change of school.
* Change of academic pursuits within school (i.e., change of major, etc.).
* Beginning a course of psychotherapy.
* Cosmetic surgery.
* Enrollment in extracurricular sports activities (contact football, hockey, judo, etc.).
* Signing of report cards.
* Acquisition of passports.
* Signing contracts on behalf of the child (for theatrical services, etc.).
* Signing for the driver’s license of the child.
* Being nominated as a guardian ad litem to litigate causes of action on behalf of the minor child (as in Elk Grove).
The above list is by all means not complete. Practitioners should discuss the parameters of legal custody well prior to the date of the custody hearing, and not discussed literally on the “courthouse steps”.
In addition, counsel should apprise the client that, along with the many benefits of joint legal custody, come certain statutory liabilities which may accrue to a parent who shares joint legal custody, although that parent does not share physical custody.
By way of only one example, Civil Code § 1714.1 provides that a parent in “custody and control” of a minor is liable up to $25,000.00 in damages resulting from acts of the minor which cause death, physical injury, property damage. Similarly, Education Code § 48904 provides for a parent’s liability for a child’s willful misconduct or vandalism of school property up to an amount of $10,000.00. And, Penal Code § 490.5(b) provides that a parent having “control or custody” of a minor can be jointly and severally liable with the minor for shoplifting or theft of books from a library.
While these imputed liability sections speak to liability based upon presumably physical custody an argument could be made extending same to a joint legal parent. If both parents have authorized a minor to acquire a driver’s license, both parents may share some responsibility with reference to that minor should same cause an accident.
As Elk Grove suggests, “legal custody” may have a broad, wide ranging impact.
To read more and visit our web site click here. http://la-family-law.com
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