The trial-court found that between Joseph and Maryanne, Joseph had 80% of the income and 85% of the assets. Pursuant to Family Codes 2030 and 2032, the court awarded Maryanne $200,000 in fees. The trial-court also sanctioned Joseph some $75,000 for failure to disclose his earnings pursuant to his obligation under §2102(c). Joseph appealed these orders arguing that MaryAnne didn’t need the money and that his obligation to disclose ended upon entry of judgment, not termination of the court’s jurisdiction over child support.

In a decision filed 1/5/12, the California Fourth District of Appeals rejected Joseph’s request to reverse the trial court’s order awarding attorney fees. The appellate court affirmed the findings of the lower court that, “The fact that Maryanne has ample resources to pay her attorney fees does not necessarily bar an order for attorney fees and costs,” noting that pursuant to California statutes and case law, a party’s ” ‘need’ is relative.” The lower court had also noted that, pursuant to §2030, there are a number of other factors besides availability of funds to the parties that need be considered in making an award, including the complexity of the case, the skill of counsel, the reasonableness of the fees, and any other factors affecting the parties’ abilities to pay.

The appellate court did, however, reverse the lower court’s sanctions order; it was concluded, “that any fiduciary duty that Joseph had to disclose material changes in his income to Maryanne ended upon entry of their 2002 divorce decree.” The sanctions request was remanded to the lower court for further proceedings (as there were still grounds for sanctions pursuant to §271 i.e. obstreperous conduct, even if the §2102(c) did not constitute a valid basis).

The full opinion can be found here.

Alan and Elaine Margulis were married for 33 years; Alan was the sole breadwinner and manager of community finances. After separation, Alan asserted that the hundreds of thousands of dollars in community investment accounts had been depleted in expenditures for the community’s or Elaine’s benefit or due to stock market losses. Alan presented no evidence at trial to show how he disposed of the funds under his control.

At trial, Elaine presented an account statement prepared three years after separation (and six years before trial) showing total assets of $1,305,500. She argued that she should not have to prove how Alan had disposed of these monies; rather, as managing spouse, the burden of proof should be on Alan. The trial court rejected this argument and said the statement wasn’t sufficient to establish the values of the community assets at separation These assets were thus excluded from the equalization calculation, and Elaine had to pay Alan a hefty sum.

The trial court reversal on appeal constitutes an exception to the general rule under Evidence Code §500, which states that “a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting.” This exception is in line with the large body of case law, which allows courts to alter the normal allocation of the burden of proof in the interests of fairness and equal access to evidence, especially where a plaintiff has no access to records.

The appellate court noted that “the trial court’s failure to place the burden of proof on Alan relieved him of the duty to account for his postseparation management of these assters..This lack of accountability poses a risk of abuse and runs afoul of the statutory scheme imposing broad fiduciary duties of disclosure and accounting on a managing spouse.”

Indeed, pursuant to CFC §721(b), Alan was obliged to furnish information regarding his disposal of the community assets to Elaine even without demand. Relief for the sequestering and disposal of community assets is controlled by CFC §1101 et. seq. under which an injured party is mandatorily due half of the purloined asset plus fees and costs and under which an injured party may be awarded the entire asset. When the trial court revisits this issue, it will have to make a new decision with CFC §1101 et. seq. in mind.

Full transcript of the Court’s decision can be found here.

The California Third District Court of Appeal reversed the decision of the El Dorado Superior Court to deny the move-away of a mother on the grounds that the trial court’s order, “was based on incorrect legal assumptions and failed to address the legal issue presented by mother’s request to relocate with the child,” specifically, what custody arrangement would be in the child’s best interest. This decision was filed June 30, 2011.

The matter involved a post-judgment custody dispute in which mother wanted to move from California to Washington with the minor child. Third-party recommendations stated that even if mother was a better parent and potentially more attentive to the child’s medical issues (the child had diabetes), prolonged lack of contact with the father was deemed not in the best interest of the child. The court denied mother’s request to move to to keep the child accessible to father. The appellate court found this to be an abuse of discretion. Instead, the appellate court stated, the trial court should have assumed mother would be moving and made custody orders in the best interest of the child based on this new situation.

“…whether the minor’s counsel, the mediator, or it [the trial court] believes mother will not move without the child, is legally irrelevant. Mother has a right to move and she has decided to move; that is the premise from which the legal analysis must begin.”

“The decision to move a child away from one of his or her parents is one of the most difficult decisions a judge will ever have to make. Nevertheless, the decision cannot be avoided by coercing the moving parent into staying or prohibiting her from moving.”

The matter was remanded to the trial court for a new determination of custody and visitation. Mother was awarded her costs on appeal.

Full transcript of the Court’s decision can be found here.

In a decision filed April 28, 2011, the 4th California Court of Appeals determined that, when a joint-custody parent wishes to move to another state, the trial court must assume the parent will move and make a custody determination is in the best interests of the child, not deny the move away to coerce the parent to stay.

In this particular parentage case, decided initially by San Diego Superior Court Judge, Lisa Schall, the mother planned on moving to Minnesota citing poverty and a lack of job opportunities.  Family Court Services recommended that, as the mother had been primary caretaker of the minor child since his birth, the mother should retain custody after she moved.  The custodial evaluator, Dr. Love, disagreed, arguing that such an order would prevent the father from establishing a relationship with the child.  Judge Schall agreed, denying the mother’s request to move based on concern for a “long term detrimental impact on [child's] ability to maintain his relationship with his father.”

The problem was that the Court actually didn’t have the jurisdiction to refuse a move-away order.  The appellate Court cited Ruisi v. Thieriot (1997) 53 Cal.App.4th 1197, 1205-1206 (Ruisi):

“[W]hen the trial court is faced with a request to modify the existing custody arrangement on account of a parent’s plan to move away (unless the trial court finds the decision to relocate is in bad faith), the trial court must treat the plan as a serious one and must decide the custody issues based upon that premise. The question for the trial court is not whether the parent may be permitted to move; the question is what arrangement for custody should be made [if and when the parent moves].

This issue had just come up in a very similar case, F.T. v. L.J. (2011) 194 Cal.App.4th 1, in which the trial court denied a move-way request to ensure that a joint-parenting father would stay San Diego.  This denial was reversed on appeal on the grounds that the trial court had abused its discretion.

Based on these precedents, the Court made determined that a court must make a custody determination based on the assumption that the joint-parent is moving.  The trial court should have determined if it was in child’s best interest to go with parent to Minnesota.  If it was not, or if the trial court determined that the mother’s move was in bad faith (to disrupt father’s access), there would be justification for changing the primary custodian.  The Court did not make a finding of bad faith in this case.

The bottom line, according to the Appellate Court, is this: The trial court did not have the jurisdiction to prevent the move of the parent.

“To the extent that the trial court denied the move away request with the goal of maintaining the status quo and/or coercing [the mother] to abandon her proposed plan to move to Minnesota, it abused its discretion.”  In doing so, the trial court had made an order that could not be effectuated if and when Jamie moved to Minnesota.  The Appellate Court thus reversed Judge Schall’s decision and remanded the case back to the lower court.

Full transcript of the Court’s decision can be found here.

E049310

In a decision filed April 14, 2011, the California Fourth District Court of Appeals affirmed a Riverside Superior Court’s characterization of a worker’s compensation payout during the marriage of Flora and George Ruiz as both community and separate property. The Ruizes were married in 1975 and separated in 2005. Flora sustained a permanently disabling injury in 1992, but she did not receive a disability payout until 2002. This payout, after deduction of attorney’s fees and medical expenses, was $172,364.

According to California Family Code §760, “Except as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property.” In Raphael v. Bloomfield (2003) 113 Cal.App.4th 617, the Court determined that “..notwithstanding the section 760 community property presumption, a lump sum permanent disability award received prior to separation is the injured spouse’s separate property to the extent it is meant to compensate for the injured spouse’s diminished earning capacity (and/or medical expenses) after separation.”

Flora argued that this meant it was up to George to prove that some of the payout was community property. The Court interpreted Raphael differently, applying the general rule that a party who claims that property acquired during the marriage is separate property has the burden of proof on that issue. In the absence of any evidence of how the payout amount had been determined, the Court applied a formula based on the period Flora was disabled during the marriage and her remaining working life after the separation, based on her salary at the time of injury and the assumption that she would have retired at age 62.5. That formula determined that $103,033 of the award was community property and $ 71,311 was Flora’s separate property.

Flora appealed, stating that the allocation was arbitrary, but she did other than asserting that the entire award was hers, she did not suggest an alternate formula for splitting the award between community and separate property. The appellate Court affirmed the lower court’s decision, finding that, according to Raphael, a worker’s comp payout is supposed compensate for lost earning–earnings that would have been community property while the Ruizes were together. The appellate Court further found that in apportioning the payout between community and separate property, per In re Marriage of Lehman (1998) 18 Cal.4th 169, 187, the trial Court had “the discretion to use any method which is reasonable and which fairly apportions the value of the asset.” The appellate Court found that the lower court had not abused its discretion in applying its formula to apportion the payout.

Full transcript of the Court’s decision can be found here.

In a decision filed January 28, 2011, the Court of Appeal for the Second Appellate District held that, under CFC §1101(g), attorney fee awards are mandatory when a party breaches fiduciary duty by failing to disclose the transfer of a community asset into a separate account.

Los Angeles residents Sandra and Edward Fossum were married in 1994 and separated in November 2002. In Spring 2002, Sandra took a $24,000 cash advance on a community credit card, citing financial need, and she transferred the funds to her personal bank account. She did not disclose the transaction to Edward, who learned about it later. Edward asserted that at least half of the funds were spent on non-essentials including a horse trailer and a car for Sandra’s son.

Under §§721 and 1100, spouses have fiduciary duties to each other as to the management and control of community property. When, as happened here, the trial court finds a spouse has breached her fiduciary duty, but not in a manner rising to the level of sanctionable conduct under §271, nor by conduct rising to the level of fraud, malice, or oppression, §1101(g) governs the applicable remedies. §1101(g) states that its remedies “shall include, but [are] not limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney’s fees and court costs.”

In a judgment issued January 2009, the trial court found Sandra had breached her statutory fiduciary duty to her spouse (CFC§721(b)) and ordered Sandra to reimburse half the charged amount ($12,000) to Edward Pursuant to §2030, the Court ordered Edward to pay Sandra $20,000 in attorney’s fees and rejected Edward’s request for fees from Sandra. Edward objected, and in its Statement of Decision, the court rejected Edward’s objection, observing that the remedy was in accord with §1101(g). Edward appealed the Court’s decision.

The appellate court determined that the trial court had been mistaken. “The language of §1101(g) is unambiguous and mandatory,” the court stated noting that the use of the word “shall” (as opposed to may) connotes mandatory action rather than discretionary acction. The court went on to cite

Citing Brewer & Frederici (2001), the appellate court stated that once a breach is shown, the trial court lacks discretion to deny an aggrieved spouse’s request for attorney’s fees. “Accordingly, the trial court lacked discretion to deny Edward’s fee request.” The matter was remanded back to the trial court to determine the amount of attorney’s fees to which Edward is entitled under §1101(g) for Sandra’s violation of §721.

Justice Rothschild gave a dissenting opinion, stating that 1101(g) is not self-executing, and as Edward never explicitly asked for attorney’s fees pursuant to 1101(g), he was not due any pursuant to that statute. Rothschild also recommended that 1101(g) be modified by the legislature to be discretionary, rather than mandatory stating that, “A mandatory award of attorney fees, imposed regardless of the value of the asset at issue and irrespective of need and ability to pay, is a harsh remedy for a violation that is merely technical and wholly innocent, as might often be the case, so it is unlikely the Legislature intended such a result.”

Full transcript of the Court’s decision can be found here.

The Fourth California Appellate District determined, December 10, 2010, that the 180-day time limit to appeal a Judgment or appealable order (per California Rules of Court 8.104(d)(3)) is measured from the date an order is filed in a publicly-accessible location, which is not necessarily the date it is file-stamped by a Court.

This decision was part of the Appellate Court’s denial of a motion to dismiss the appeal of an order of an Orange County Superior Court. The order had been file-stamped April 1, 2010 but was not entered into the Court’s computerized case management system until September 10, 2010. In fact, the Court had lost the order and did not relocate it until August 20, 2010.

The party, who ultimately appealed the order, made phone calls to the Court in June and July 2010 inquiring as to the status of the order. Both times, she was told that orders had been filed. On July 21, 2010, she went to the Courthouse to speak to a clerk in person. The clerk conceded that the order appeared to be lost, and she suggested that both sides resubmit all of their paperwork for review and a new order. Both sides complied, but by then the order had been found and was subsequently sent out to the opposing party, who received it on September 13, 2010. He then mailed it to the soon-to-be appellant on September 18.

The appealing party filed her appeal on October 1, 2010, and on October 19, the appellate Court indicated that it was considering dismissing her appeal as it had been filed 13 days outside the 180-day time limit. The appealing party filed a brief letter addressing the timeliness of her appeal along with a sworn declaration describing her efforts to ascertain the status of the Court’s order. A Superior Court supervisor chimed in with a declaration confirming that the order had been misplaced and that conformed copies had not been timely provided.

The Court determined that, for the purposes of establishing when the 180-day appeal clock starts, “a judgment or an appealable order is presumptively filed on the file-stamped date. This presumption, however, may be rebutted by evidence that the order was not accessible to the public in either paper or electronic form, and was not sealed by court order, or made confidential by law.” This construction was necessary, the Court stated, to preserve the constitutional right of appeal as, otherwise, trial courts would be able to shield judgments from appellate review by holding them in pectore until the 180-day appeal limit had run its course.

The appellate Court noted that its decision should not be broadly interpreted to determine when a document’s filing date for any other purpose. Its decision only applies to the 180-day time limit for appealing Judgments and orders.

Full transcript of the Court’s decision can be found here.

All this changed as a result of the landmark Elkins decision [Elkins v. Superior Court, (2007) 41 Cal.4th 1337], in which the California Supreme Court Chief Justice held that there is a basic right to present live testimony in Family Court. “When the two policies collide head-on, the strong public policy favoring disposition on the merits outweighs the competing policy favoring judicial efficiency…A party’s opportunity to call witnesses to testify and to proffer admissible evidence is central to having his or her day in court,” Elkins stated.

The Elkins decision was codified in California Family Code Section 217, (amended 1/1/2011) which states:

217. (a) At a hearing on any order to show cause or notice of
motion brought pursuant to this code, absent a stipulation of the
parties or a finding of good cause pursuant to subdivision (b), the
court shall receive any live, competent testimony that is relevant
and within the scope of the hearing and the court may ask questions
of the parties.
(b) In appropriate cases, a court may make a finding of good cause
to refuse to receive live testimony and shall state its reasons for
the finding on the record or in writing. The Judicial Council shall,
by January 1, 2012, adopt a statewide rule of court regarding the
factors a court shall consider in making a finding of good cause.
(c) A party seeking to present live testimony from witnesses other
than the parties shall, prior to the hearing, file and serve a
witness list with a brief description of the anticipated testimony.
If the witness list is not served prior to the hearing, the court
may, on request, grant a brief continuance and may make appropriate
temporary orders pending the continued hearing.

As a result, San Diego County has changed its local rule 5.5.8(H), which outlined strict guideliness for requesting live testimony. It now essentially restates CFC §217:

H. Limitations on Evidence/Oral Testimony. If any party wishes to present oral testimony, written declarations must still be filed in a timely manner. The written declarations must be the direct testimony of the declarant. Written notice of the intent to present oral testimony must be served on the opposing party at least five court days before the scheduled hearing. The notice must state the name[s] of the intended witness[es] and the subject matter of the witness[es]‘ testimony. Failure to give the required notice will generally result in a denial of the request for oral testimony.

Affirming the decision of San Diego Superior Court Judge Patricia Garcia, the California Fourth Appellate District Court of Appeal held, November 24, 2010, that the military basic allowance for housing (BAH) and basic allowance for subsistence (BAS) were includable in a soldier’s gross income for the purposes of calculating child and spousal support obligations.

San Diego residents Soloman Stanton, active-duty Naval serviceman and his wife, Carol, were granted dissolution, effective March 2008. Spousal and Child support amounts were stipulated to in their Marital Settlement Agreement (MSA), but at a hearing September 1, 2009, Judge Garcia granted Soloman’s order to show cause (OSC) to set aside the MSA for equitable reasons, save for the termination of marital status. The Court issued temporary support orders, factoring in BAH and BAS.

On October 29, 2010, Soloman filed an OSC to reduce child support followed by a petition to modify spousal support on November 4. His main argument was that including BAH and BAS in his gross income violated the fedeal preemption doctrine as military allowances are exempt from federal taxes and not subject to garnishment for support arrears under federal law.

The Court denied Saloman’s OSC on December 3, stating,”[I]f it looks like income, it is income no matter how it’s paid to you. And this court has always considered BAH and BAS to be income.” Court also denied Salomon’s motion to modify child support.

On appeal, CA-4 affirmed Judge Garcia’s decision, holding that the federal preemption doctrine is inapplicable to California Support Law under the Rose doctrine:

“We have consistently recognized that ‘the whole subject of the domestic relations of husband and wife, parent and child, belongs to the laws of the States and not to the laws of the United States.’ … ‘On the rare occasion when state family law has come into conflict with a federal statute, this Court has limited review under the Supremacy Clause to a determination whether Congress has “positively required by direct enactment” that state law be pre-empted.’ … Before a state law governing domestic relations will be overridden, it ‘must do “major damage” to “clear and substantial” federal interests.’ ” (Rose v. Rose (1987) 481 U.S. 619, 625)

Saloman’s appeal was denied because he failed to cite any direct enactment showing Congress intended to disallow the inclusion of BAH and BAS in a party’s gross income for support calculation. The appellate Court further noted that CFC §4053, which lists the principles to be followed by the Court in setting a child support award, says guideline takes into account “actual” income, not “taxable” income.

Full transcript of the Court’s decision can be found here.