MUST SHOW CHANGED CIRCUMSTANCES (UNREALIZED EXPECTATIONS) TO EXTEND SPOUSAL SUPPORT

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An important case came down earlier this year regarding spousal support, holding that the supported party in what is referred to as a Richmond order must show changed circumstances such as “unrealized expectations” to warrant an extension of support.  In IRMO Khera & Sameer (CA 6 – Opinion filed June 19, 2012), the court also determined that a voluntary decision to pursue a doctoral degree rather than going to work full time is not a change of circumstances that warrants an extension of support.

The case centers around two parties that had reached a judgment that included spousal support.  Wife moved to set aside the judgment and then moved to modify spousal support by extending it beyond the scheduled termination date.  Husband opposed the relief request.

The appellate court ultimately denied Wife’s motion.  In its decision, it cited California Family Code § 4330 (a), which provides that support of a party may be ordered in an amount and for a period of time, that the court determines is just and reasonable based on the standard of living established during the marriage.  It also stated that several factors that are listed in Family Code § 4320 must be considered.

Also cited was Family Code § 3651(d), which states that a support order may be modified or terminated at any time unless the parties agree otherwise in writing or orally on the record in open court.  IRMO McCann (1996) 41 Cal.App.4th 978, 982, dictates that modification of spousal support, even if the prior amount is established by agreement, requires a material change of circumstances since the last order.

A material change of circumstances may be found in the unrealized expectations of the supported party.  However, under IRMO Farrell (1985) 171 Cal.App.3d 695, a change of circumstances may not be found by reconsidering a circumstance that has not changed since the previous order.  If changed circumstances are proved, a trial court presented with a request to modify a spousal support order must then reconsider the criteria set for in Family Code § 4320.

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SPOUSAL SUPPORT AND YOUR RETIREMENT

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When it comes to dealing with retirement issues regarding spousal support, it could be crucial to understand what the case of In the Marriage of Olsen (1993) 14 Cal.App.4th 1 stands for.  In Olsen, the California Appellate Court stated that the trial courts have broad discretion to consider unwithdrawn retirement contributions and accruals as available for the setting of spousal support.

However, the justices in Olsen admonished that the trial court must give consideration to the dual but possibly conflicting public policies of awarding spousal support where appropriate and of encouraging citizens to save for their retirement.  The Olsen court concluded that trial courts possess broad discretion when setting or modifying permanent spousal support about whether to consider as income contributions to individual retirement plans and accruals not withdrawn.  The Olsen court stated it is easy to foresee cases where contributions and accruals are best not considered as income available to pay permanent spousal support.

In the case of In Re Marriage of Reynolds (1998) 63 Cal.App.4th 1373, the court held that a payor husband who had reached the retirement age of 65 and was between 59½ and 70½ during which time he could withdraw funds from his IRA without penalty, could only consider investment income, not investment principal, as available to pay spousal support.

PROPOSED BILL WOULD BAR SPOUSAL SUPPORT FOR VICTIMS OF SEXUAL ASSAULT

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There is a new bill going through Sacramento that would change the law that allows people convicted of violent sex crimes against their spouses to still be awarded support payments, community property, or other financial benefits.

The bill is being promoted by Carlsbad stockbroker Crystal Harris.  Harris is responding to the fact her husband, Shawn Harris, who was convicted of sexually assaulting her, was able to convince a judge that she should cover his legal costs.  She may also be liable for spousal support when he is released from prison.

Harris is urging the Assembly Judiciary Committee to approve legislation carried by Assemblywoman Toni Atkins of San Diego, that is crafted to bar that possibility in future cases.  San Diego County District Attorney Bonnie Dumanis, a candidate for San Diego mayor, is the measure’s primary sponsor.

Opposition to the measure has been registered by the Association of Certified Family Law Specialists.  In a letter to the committee, the alliance of attorneys argued that violent sex crimes could be considered a factor in determining support issues but should not necessarily be a black and white rule, thereby obliterating any discretion by the courts to consider mitigating factors or circumstances.

MILITARY HOUSING AND FOOD TO BE CONSIDERED FOR SUPPORT

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In a case of first impression California’s Fourth District Court of Appeal has held that military housing and food allowances are to be taken into consideration when calculating child and spousal support.  In the case, entitled In re Marriage of Stanton 190 Cal.App.4th 547 (4th Dist., Div. 1 Nov. 24, 2010), the court held this to be true even though such allowances are neither taxable nor subject to wage garnishment.

The facts of the case are as follows:

Husband Soloman Stanton had sought to reduce his temporary child support and spousal support orders to his wife, Carol.  Upon divorce, the court had ordered Soloman to pay his wife temporary support for both her and their son.  Soloman was a member of the United States Navy, and, at the time, the court had calculated the amount of support based in part on Soloman’s military allowances for housing and food.

In his request for a reduction, Soloman had argued that because federal law exempts a military allowance from federal tax and wage garnishment, the court had violated the federal preemption doctrine by including his allowances in its calculation.  Under the federal preemption doctrine, Congress can preempt state laws.

However, after the hearing, the San Diego County Superior Court denied Soloman’s request for a reduction.  The Court of Appeal affirmed the trial courts decision.  It held that the federal preemption doctrine does not prohibit the inclusion of a military allowance when calculating either child support or spousal support.  The court opined that the doctrine is inapplicable to family law unless Congress’s intent is clearly contrary to state law.

The Court of Appeal further determined that Congress had not intended for a military allowance to be excluded from child support or spousal support.  In conclusion, the court stated that “the nontaxable status of military allowances does not suggest Congress had any preemptive intent with regard to either child or spousal support.”

DETERMINING LONG TERM SPOUSAL SUPPORT: STANDARD OF LIVING

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When it comes to long-term spousal support, Family Code § 4320 is the guiding light.  This is the section that lists the mandatory factors family law courts must consider when determining long-term spousal support.

Family law judges do not simply determine spousal support by reference to one factor or another.  They must weigh and apply all of the factors stated in Family Code § 4320.  Any spousal support order not reflecting a weighing of these statutory factors is subject to reversal for abuse of discretion.

Family Code § 4320(d), which considers: “The needs of each party based on the standard of living established during the marriage,” is probably the most indeterminate statutory factor the family law judges must weigh and apply in each case.

The case of Marriage of Smith (1990) 225 Cal.App.3d 469 supplies the generally accepted guidelines for marital standard of living.  It held the marital standard of living to mean:

“…the general station in life enjoyed by the parties during their marriage.  The Legislature did not intend it to be a precise mathematical calculation, but rather a general reference point for the trial court in deciding this issue.”

There are two general approaches to quantifying the marital standard of living.  They are:

  1. Expenditure based, and
  2. Income based.

The expenditure based approach considers all spending records (cash and credit) for the last few years of marriage and categorically summarizes the spending.

The income based approach requires relatively few documents and both its strengths and weaknesses are attributable to simplicity.  The income base approach summarizes historical tax returns and assumes that all after-tax dollars are subsequently consumed.  In other words, all available dollars are either spent, saved, or invested.

Based on the case of Marriage of Weinstein (1991) 4 Cal.App.4th 555, this approach is the preferred method when the parties lived beyond their means.  Or, in other words, when the marital standard of living was subsidized by credit.

$600,000 PER MONTH ENOUGH FOR DODGER CEO JAMIE MCCOURT

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Did you see the CBS news piece where Los Angeles Dodgers CEO Jamie McCourt has asked the family law court to continue ordering her soon-to-be-ex-husband to pay more than $600,000 per month in spousal support – in spite of the fact the Dodgers recently filed for bankruptcy.  Hmm, we ask.  And where might Frank McCourt continue to come up with this not-so-modest sum of cash?

Well, in her opposition papers filed last week in their divorce case, Jamie said that should be no problem.  Frank has access to more than “$70 million in income and assets” that should be able to help him satisfy such a large support order.  Of course poor Frank, in his moving papers, didn’t agree.  He felt his payments should be more in line with the paltry $5 million he receives annually.  And we, the fans and distant observers, can only sigh and blink our eyes at the unreality these two face; the problems we wish we had to deal with.

Stay tuned.  Their hearing is set for August 10th.

TEMPORARY SPOUSAL SUPPORT: NEED VERSUS ABILITY TO PAY

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One of the most common issues regarding a family law order to show cause is temporary spousal support.  Any motion involving temporary spousal support would begin with Family Code §3600.  This section provides that the court may order a party to “pay any amount that is necessary for the support of the wife or husband.”  This has been interpreted by the courts to be the maintaining of the status quo, subject to the general criterion of “Need” and “Ability to Pay.”  In re Marriage of Schulze (1997) 60 Cal.App.4th519, 70 C.Rptr.2d 488.

The reality is that in family law, “Need” and “Ability to Pay” are at opposite ends of the same spectrum.  “Ability to Pay” applies to the income of the high earner in the relationship, while “Need” is the income of the low earner.

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