Recent Blog Posts in 2010

• Subpoeanas duce tecums - C.C.P. § 1987
• Form Interrogatories - C.C.P. § 2030.030
• Specially Prepared Interrogatories - C.C.P. § 2030.030 and 2030.050
• Production and Inspection Demands - C.C.P. § 2031.030
• Requests for Admission of Truth of Facts or Genuineness of Documents - C.C.P. § 2033.010
• Depositions - C.C.P. § 2025.010
• Expert Witness information exchanges - C.C.P. § 2034.010

The statutory references I provide here for the various discovery modalities are illustrative only  - if you are representing yourself or have a lawyer but want to be educate yourself nonetheless you may want to review other 'neighboring' code sections.  I will try to hit the most important for you.

"(a) A premarital agreement is not enforceable if the party against whom enforcement is sought proves either of the following:

* * *

(c) For the purposes of subdivision (a), it shall be deemed that a premarital agreement was not executed voluntarily unless the court finds in writing or on the record all of the following:

(1) The party against whom enforcement is sought was represented by independent legal counsel at the time of signing the agreement or, after being advised to seek independent legal counsel, expressly waived, in a separate writing, representation by independent legal counsel.

(2) The party against whom enforcement is sought had not less than seven calendar days between the time that party was first presented with the agreement and advised to seek independent legal counsel and the time the agreement was signed.

(3) The party against whom enforcement is sought, if unrepresented by legal counsel, was fully informed of the terms and basic effect of the agreement as well as the rights and obligations he or she was giving up by signing the agreement, and was proficient in the language in which the explanation of the party's rights was conducted and in which the agreement was written. The explanation of the rights and obligations relinquished shall be memorialized in writing and delivered to the party prior to signing the agreement. The unrepresented party shall, on or before the signing of the premarital agreement, execute a document declaring that he or she received the information required by this paragraph and indicating who provided that information...."

Notice how these provisions are almost shouting 'independent legal counsel.'  It is rare to see a phrase repeated so often within the same code section. 

So examine whether your agreement, and the required separate writing, seem to address these requirements.  Also, check to see whether the other conditions for enforceability are met.  There may be other reasons why your Prenup will not be enforced, as where undue influence was exerted to obtain your signature (notice the seven day waiting period, which is intended to overcome the social pressures where a wedding date is looming).  But you would be ill-advised to embark upon a challenge to the agreement without legal counsel this time around; don't compound the problem.

A final comment:  Setting aside the prenuptial agreement may only have a limited affect upon the status of the house.  For instance, the rules relating to transmutations and reimbursements still apply.  I have written about those elsewhere in this Blog, but if the house was acquired by your wife as her separate property independently of the Prenup it remains her separate property even if the agreement is voided.  However, if there was a mortgage and it was paid down with her earnings during marriage the cancelation of the Prenup may benefit you because the community will thereby gain a Moore Marsden reimbursement right in the principal pay down and appreciation.

Again, seek out an experienced family law attorney.  And, I always urge that people consider mediating these types of family law disputes.

T.W. Arnold
http://www.ThurmanArnold.com

Q.  I understand that Moore Marsden has something to do with reimbursing the community estate for the mortgage payments we made on the house my wife owned prior to our marriage, but we spent some the monies we saved during our marriage on improvements to the house.  Do I get any of this back?

A.  The Moore Marsden formula typically deals with what happens to the equity in property owned in the name of one spouse alone - in this case a house - where during marriage community property (i.e., either spouse's earnings) is used to make mortgage payments.  Where these mortgage payments are a combination of principal and interest, and not interest only, their net effect is to increase equity by reducing principal.  Over many years the amount of principal reduction can be substantial.  In effect the spouse who solely owns that residence is benefiting by the community's contribution.  This is potentially a kind of breach of fiduciary duty, giving rise to reimbursement rights.  Over time this right of reimbursement to the community grows, but it only applies to increases in equity.  There is no right to be reimbursed for interest, taxes and insurance payments.  I have given an example of how these Moore Marsden interests are calculated here.

Sometimes during marriage after a period of community payments on the separate property mortgage of one spouse, spouses or domestic partners transfer title to the property into joint names (often where there is a refinance and the lender requires it) so that now both spouses are on title to what was previously one spouse's separate property.  This is called a transmutation.  Under Family Code section 2581 the property is deemed "acquired" during marriage and so the house now presumptively becomes community property.  Use our search engine to find more information about transmutations.  Later, upon dissolution or legal separation these interests need to be separated out and accounted for.  In such cases several levels must be analyzed:

First, a transmutation (adding a spouse to title to what was previously separate property) must be free and voluntary, and there is a presumption that the spouse who comes onto title did so through some form of undue influence.  This may or may not at all be true, but it is the burden of the later titled spouse to establish the absence of undue influence.  If there was undue influence, then the title change can be set aside and the property remains separate.  If the title change is set aside, Moore Marsden applies because the property will be deemed to have always been the separate property of the first spouse but the community will still be entitled to a ratio of equity reimbursements. 

If there has been a valid transmutation, then the first spouse is still entitled to be reimbursed for the value of their separate property contribution to the community (absent an express written waiver of this right of reimbursement).  This is determined as of the date of the transmutation, and is governed by Family Code section 2640.  Moore Marsden may still apply to determining the amount of this 2640 reimbursement.  For example, say on the date of marriage Wife owned the property in her name and the mortgage owing is $100,000.  Assume at the date Husband is added to title the mortgage has been paid down to $80,000.   Also assume the value of the property remains the same at $200,000.  Here there has been an increase of $20,000 in equity and the community must be reimbursed. On the date Husband goes on title $100,000 of the equity is Wife's pure separate property - the house was worth $200,000 and the mortgage was then $100,000.  Wife is entitled to a 2640 reimbursement of $100,000.  However, both H and W have a community interest in that $20,000 of principal reduction.  Moore Marsden will be used to determine the value of each of their shares (often there has been a change of value between the two dates - assuming the house appreciated, then they also share in different proportions in the equity increase).  Wife's $100,000 2640 reimbursement will be increased by her share of the community increase.  If there has been appreciation, a ratio is determined that fixes the amount of community reimbursement due.

In contrast, if the mortgage had been interest only up to the date of the transfer (with no capital improvements), then as of the date of this transfer the community would have no Moore Marsden reimbursement and Wife's 2640 claim would be 100% of the home equity on that date.

Once both parties jointly own the property, Moore Marsden will not apply to the increases or contributions that occur thereafter (unless there is a future transmutation back to one party or the other alone) although it may later be used as illustrated above to determine 2640 credits on the date the other spouse goes on the deed.  This is because the formula is only used to value reimbursements to the community where community money improves or increases the value of one spouse's separate property - once parties are on title, the residence becomes community property subject to a separate property reimbursement instead of separate property subject to a community reimbursement.

A common situation occurs when one spouse holds property in their name alone but the spouses together, or the other spouse, contributes monies to remodels or improvements.  The value of those improvements may need to be reimbursed - either to the community (where the improvements were paid by both from earnings and accumulations during marriage) or to other spouse (where the untitled spouse pays for the improvements from their own separate property, i.e., premarital savings).

Whether or not there is an actual right of reimbursement to the community improvements depends first on whether those improvements actually increased the value of the home. If community funds are used to buy a solid gold toilet, that toilet may have little impact on the value of the home per se (the toilet is still worth whatever it is worth).  Some improvements don't increase value.  Another example might be an improvement that loses value over time, like new carpeting.  This is to be compared with adding more square footage by enlarging the house. Expert testimony may be required to prove the improvements increased value and to what extent.

But the reimbursement for capital improvements is not dollar for dollar.  Instead a modified Moore Marsden analysis must be performed which determines the community property interest in the equity appreciation during marriage, taking into consideration the extent to which the improvements increased value.

Incidentally, when there is a 2640 reimbursement to the first spouse, this comes off the top from any equity in the house - which means there is there no equity remaining after this reimbursement, there is not community equity left to reimburse.

Complicated?  You bet.  There are so many possible scenarios and it is hard to speak to these concepts except in generalities.  Often a forensic accountant with Moore Marsden experience will need to be engaged.  Since the fair market value of property may need to be determined at various points of time (for instance, the date of marriage, the date the new spouse comes on title, and the date of division), expert opinions of value of the real estate may also be required.  It may be problematic to value property as of some long ago date.

My hope is here is to introduce you to the concepts so that you may be somewhat conversant with them.  Find an experienced family lawyer to assist you!  They will know local experts who can help with the analysis.

Q.  My wife and I were married for 14 years.  We have two children, aged 11 and 13.  We are both in our early 40's.  My wife has a college degree, but quit working shortly before our first child was born.  I am a doctor, and she was a nurse at the local hospital before she quit.  Our divorce is not final.  I think she should be able to support herself once she gets some updated training, although I don't object to supporting our children.  She says she won't work until until our youngest child finishes high school.  What should I ask the judge to do and what should I expect to limit my spousal support exposure?

A.  There are a number of things you need to know. 

First, you have a long term marriage within the meaning of Family Code section 4336.  Start with the expectation that you will be paying alimony for at least half the length of the marriage.

Second, Family Code section 4320 sets forth the most important factors that a court is required to consider in issuing a spousal support award; it is also the decisive section for determining whether spousal support should be modified, reduced, or terminated in the future.  As to later modifications, this means that whatever the court decides as to the 4320 factors (or depending upon what facts are recited in your Marital Termination Agreement) may have a huge impact on how much you pay and for how long.  The 4320 factors only come into play when a final judgment enters:  Although courts are supposed to consider them in dealing with temporary spousal support issues, they typically do not.

Third, it is essential that you convince the Court to give your former spouse a Gavron warning.  I have separately blogged this concept. In essence its effect is to give a supported spouse something of a free pass to rehabilitate themselves and enter the work force until and unless they've been given advance notice of that expectation.  If you settle your case without going to trial, as I sincerely hope you do, make sure that a Gavron Admonition is included in your settlement agreement.  It starts the clock ticking on your former wife's obligation to become self-sufficient.  However, you need to realize that her ability to do so will be impacted by her child rearing responsibilities to whatever extent they exist, and most courts will consider this.  It becomes less relevant with older children.  Given the length of your marriage (14 years) your youngest child will be finishing high school right about the time that you reach half the length of the marriage.

Fourth, consider trying to get what is called a Richmond Order.  Essentially this is an order or an agreement to terminate spousal support jurisdiction on a specified date unless, prior to the fixed termination date, the supported spouse files a motion showing good cause to modify the amount of support or its duration.  Unlike most orders which are open-ended, a Richmond Order discourages delay and supports the goal of California that an ex-spouse receive support only so long as is reasonably necessary to get back on their own two feet.  They are generally not appropriate in extremely lengthy marriages, or  in situations where health or age makes it unreasonable to believe the other party can become self-supporting. 

Age is a factor in your case because there is still time for your Wife to develop financial independence. 

The effect of the Richmond Order is to place the burden upon the supported spouse to justify continuing support because of unforseen future events. Most judges prefer Richmond orders, but you won't get it unless you request it.  Attorneys representing supported spouses are less likely to agree to them in Marital Settlement Agreements at first blush.  There may be good reasons, however, that be persuasive if you persevere. 

Fifth, consider a request for step down spousal support orders where support is reduced in increments into the future; this may make perfect sense depending upon the length of marriage, whether there are children, and the supported spouse's age. 

Sixth, consider a Family Code section 4331 Vocational Training Examination.  Even if the Court concludes that it is not reasonable for your wife to work now, this may create an important benchmark which will be useful to you in the future.  Downstream if she does not obtain employment she arguably might have, the Court may be convinced it should impute income to her that might have otherwise earned.

At this stage of the proceedings you are setting the stage for a future reduction.  That requires smart advance preparation.  Find a competent spousal support attorney in your area!

By the way, this is exactly why you should want mediation rather than a court judgment.  IMHO.  Mediation takes the future into consideration, and creates a safe container for the parties to talk about it!

Thurman Arnold
http://www.DesertDivorceandFamilyLawyer.com

The following text was taken from the AFCC materials provided in Denver.  The DSM-V has not been adopted, nor is there any agreement that the following diagnosis should be added.  I will provide commentary in a later Blog.

TWA

Proposed Text for Parental Alienation Disorder in DSM-V

DIAGNOSTIC FEATURES

The essential feature of parental alienation disorder is that a child - usually one whose parents are engaged in a high-conflict divorce - allies himself or herself strongly with one parent (the preferred parent) and rejects a relationship with the other parent (the alienated parent) without legitimate justification. The primary behavioral symptom is the child's resistance or refusal to have contact with the alienated parent (Criterion A).

The behaviors in the child that characterize parental alienation disorder include a persistent campaign of denigration against the alienated parent and weak, frivolous, and absurd rationalizations for the child's criticism of the alienated parent (Criterion B).

The following clinical features frequently occur in parental alienation disorder, especially when the child's symptoms reach a level that is moderate or severe (Criterion C). Lack of ambivalence refers to the child's belief that the alienated parent is all bad and the preferred parent is all good. The independent-thinker phenomenon means that the child proudly states the decision to reject the alienated parent is his own, not influenced by the preferred parent. Reflexive support of the preferred parent against the alienated parent refers to the pattern of the child's immediately and automatically taking the preferred parent's side in a disagreement. The child may exhibit a disregard for the feelings of the alienated parent and an absence of guilt over exploitation of the alienated parent. The child may manifest borrowed scenarios, that is, rehearsed statements that are identical to those made by the preferred parent. Also, the child's animosity toward the alienated parent may spread to that parent's extended family.

The diagnosis of parental alienation disorder should not be used if the child's refusal to have contact with the rejected parent is justifiable, for example, if the child was neglected or abused by that parent (Criterion D).

ASSOCIATED FEATURES

Parental alienation disorder may be mild, moderate, or severe. When the parental alienation disorder is mild, the child may briefly resist contact with the alienated parent, but does have contact and enjoys a good relationship with the alienated parent once they are together.

When the parental alienation disorder is mild, the child may have a strong, healthy relationship with both parents, even though the child recites criticisms of the alienated parent.

When the parental alienation disorder is moderate, the child may persistently resist

contact with the alienated parent and will continue to complain and criticize the alienated parent during the contact. The child is likely to have a mildly to moderately pathological relationship with the preferred parent.

When the parental alienation disorder is severe, the child strongly and persistently resists contact and may hide or run away to avoid seeing the alienated parent. The child's behavior is driven by a firmly held, false belief that the alienated parent is evil, dangerous, or worthless.  The child is likely to have a strong, severely pathological relationship with the preferred parent, perhaps sharing a paranoid worldview.

While the diagnosis of parental alienation disorder refers to the child, the preferred parent and other persons the child is dependent on may manifest the following attitudes and behaviors, which frequently are the major cause of the disorder: persistent criticisms of the rejected parent's personal qualities and parenting activities; statements that influence the child to fear, dislike, and criticize the alienated parent; and various maneuvers to exclude the rejected parent from the child's life. The behavior of the preferred parent may include complaints to the police and child protection agencies with allegations about the rejected parent.

Parental alienation disorder may be the basis for false allegations of sexual abuse against the alienated parent. The preferred parent may be litigious to the point of abusing the legal system. The preferred parent may violate court orders that are not to his or her liking. Specific psychological problems - narcissistic personality disorder, borderline personality disorder, traumatic childhood experiences, and paranoid traits - may be identified in these individuals.  Also, the rejected parent may manifest the following attitudes and behaviors, which may be a minor or contributory cause of the disorder: lack of warm, involved parenting; deficient parenting skills; and lack of time dedicated to parenting activities. However, the intensity and duration of the child's refusal to have contact with the rejected parent is far out of proportion to the relatively minor weaknesses in the rejected parent's parenting skills.

Although parental alienation disorder most often arises in the context of a child custody dispute between two parents, it can arise in other types of conflicts over child custody, such as a dispute between a parent and stepparent or between a parent and a grandparent. Sometimes, other family members - such as stepparents or grandparents - contribute to the creation of parental alienation disorder. On occasion, other individuals - such as therapists and child protection workers - contribute to the creation of parental alienation disorder by encouraging or supporting the child's refusal to have contact with the alienated parent. Also, parental alienation disorder does not necessarily appear in the context of divorce litigation, but may occur in intact families or years following the divorce.

DIFFERENTIAL DIAGNOSIS

It is common for children to resist or avoid contact with the noncustodial parent after the parents separate or divorce. There are several possible explanations for a child's active rejection of contact. Parental alienation disorder is an important, but not the only, reason that children refuse contact.

In the course of normal development children will become polarized with one parent and then the other depending on the child's developmental stage and events in the child's life. When parents disagree, it is normal for children to experience loyalty conflicts. These transitory variationsin a child's relationship with his or her parents do not meet criteria for parental alienation disorder because they do not constitute "a persistent rejection or denigration of a parent that reaches the level of a campaign."

If the child actually was abused, neglected, or disliked by the noncustodial parent or the current boyfriend or girlfriend of that parent, the child's animosity may be justified and it is understandable that the child would not want to visit the rejected parent's household. If abuse were the reason for the child's refusal, the diagnosis would be physical abuse of child or sexual abuse of child, not parental alienation disorder. This is important to keep in mind because an abusive, rejected parent may misuse the concept of parental alienation disorder in order to falsely blame the child's refusal of contact on the parent that the child prefers. In shared psychotic disorder, a delusional parent may influence a child to believe that the other parent is an evil person who must be feared and avoided. In parental alienation disorder, the alienating parent may have very strong opinions about the alienated parent, but is not usually considered out of touch with reality.

When parents separate or divorce, a child with separation anxiety disorder may become even more worried and anxious about being away from the primary caretaker. In separation anxiety disorder, the child is preoccupied with unrealistic fears that something will happen to the primary caretaker, while the child with parental alienation disorder is preoccupied with unrealistic beliefs that the alienated parent is dangerous.

It is conceivable that a child with specific phobia, situational type, might have an unreasonable fear of a parent or some aspect of the parent's household. A child with a specific phobia is unlikely to engage in a persistent campaign of denigration against the feared object, while the campaign of denigration is a central feature of parental alienation disorder.

When parents separate or divorce, a child with oppositional defiant disorder may become even more symptomatic - angry, resentful, stubborn - and not want to participate in the process of transitioning from one parent to the other. In oppositional defiant disorder, the child is likely to be oppositional with both parents in a variety of contexts, while the child with parental alienation disorder is likely to focus his or her negativism on the proposed contact with the alienated parent and also to engage in the campaign of denigration of that parent.

When parents separate or divorce, a child may develop an adjustment disorder as a reaction to the various stressors related to the divorce including discord between the parents, the loss of a relationship with a parent, and the disruption of moving to a new neighborhood and school. A child with an adjustment disorder may have a variety of nonspecific symptoms including depression, anxious mood, and disruptive behaviors, while the child with parental alienation disorder manifests a specific cluster of symptoms including the campaign of denigration and weak, frivolous rationalizations for the child's persistent criticism of the alienated parent.

Parent-child relational problem (a V-code) is the appropriate diagnosis if the focus of clinical attention is on the relationship between a child and his or her divorced parents, but the symptoms do not meet the criteria for a mental disorder. For example, a rebellious adolescent may not have a specific mental disorder, but may temporarily refuse to have contact with one parent even though both parents have encouraged him to do so and a court has ordered it. On the other hand, parental alienation disorder should be the diagnosis if the child's symptoms are persistent enough and severe enough to meet the criteria for that disorder.

DIAGNOSTIC CRITERIA FOR PARENTAL ALIENATION DISORDER

A. The child - usually one whose parents are engaged in a high-conflict divorce - allies himself or herself strongly with one parent and rejects a relationship with the other, alienated parent without legitimate justification. The child resists or refuses contact or parenting time with the alienated parent.

B. The child manifests the following behaviors:

• a persistent rejection or denigration of a parent that reaches the level of a
• campaign
• weak, frivolous, and absurd rationalizations for the child's persistent criticism of the rejected parent

C. The child manifests two or more of the following six attitudes and behaviors:

(1) lack of ambivalence

(2) independent-thinker phenomenon

(3) reflexive support of one parent against the other

(4) absence of guilt over exploitation of the rejected parent

(5) presence of borrowed scenarios

(6) spread of the animosity to the extended family of the rejected parent.

D. The duration of the disturbance is at least 2 months.

E. The disturbance causes clinically significant distress or impairment in social academic (occupational), or other important areas of functioning.

F. The child's refusal to have contact with the rejected parent is without legitimate justification. That is, parental alienation disorder is not diagnosed if the rejected parent maltreated the child.

• Evaluating sales proceeds

• Comparables

         The specific asset is valued based upon the actual sales of similar assets or properties with actual sales that can be tracked.  With professional practices, this is common with dental businesses which are commonly bought and sold, and so numbers from the sales of other dental practices may be persuasive to a court.  Whether this method is useful depends very much on the nature of the business - sometimes there is nothing comparable or little published information about comparable sales.   Comparables are also considering in setting the value of real estate. 

• Liquidation value

Sometimes businesses will be cut up into parts that are sold separately.  Sometimes the business is valued in terms of what these parts would sell for.  It is rarely used except when the parties intend to actually liquidate the company.  Liquidation value does not generally include valuing goodwill (because the assumption is there will be no on-going concern).  Goodwill is the nightmare component to valuing businesses.  Many people in divorce who manage the business believe strongly this is how businesses should be valued (in part because in the absence of an actual sale, it is a fiction to say what a buyer might pay when no such buyers as a practical matter exist).

• Book Value

This relies upon the company records to determine what 'retained value' is.  It is rarely used, because it is more a statement of how the company perceives itself, or structured (or even 'cooked') its books, than any objective indication of value.

• Adjusted book value

This is performed through a forensic audit.  Usually it is performed on a cash basis, and accounts receivable and much more must be analyzed.

• Going concern value

This describes a method that includes valuing the business as greater than the sum of its parts.  There are a number of factors that are used.

• Capitalized earnings

This is the most common method for valuing businesses used in California because courts find it to be most reliable.  If you hope to use a different method, you will need to justify why that method is fairer to the out-spouse. This method requires expensive forensics. 



It is not uncommon to bifurcate the question of business valuations to try them separately because often this is the thorniest issue to be decided in a dissolution or legal separation proceeding.  



The law of business valuations is extremely complex and even contradictory.  The purpose of this blog is merely to introduce the concepts.  I will develop these themes in more detail in additional family law blogs. 


• If you can, try to research CCP § 1008, including looking at some legal treatise or the reported appellate decisions that mention it
• New or different facts don't generally include things you forgot to mention, unless you have some really credible explanation of why you forgot
• You must explain to the Court what you learned, how and when you learned it, why you didn't learn it earlier, and why these new or different facts matter enough that the Court should render a different outcome.  If the other party withheld facts that you became aware of only after the hearing, you need to describe your reasonable diligence in having attempted to first get all the facts
• New facts are not the same as different facts.  Be specific
• Telling the judge you just think she was wrong is rarely helpful - judges know they will be wrong some of the time, and they are trained as much to just make a decision as to get it right (clearly they want to get it right).  Most of us don't like being told we are wrong and that is rarely a useful persuasive tool.  Instead, focus on the justice or injustice of the situation and be humble
• Explaining that you made a mistake without more is also risky, because lawyers and parties do make mistakes in presenting their cases but the law favors finality in decision-making.  Your  mistake needs to have been a reasonable one. 
• Always consider combining your reconsideration request with a request for relief under Code of Civil Procedure § 473, which is a very important statute that covers relief from orders or judgments that result from your inadvertence, surprise, mistake, or reasonable neglect

In your situation the question will be:  If you knew 10 days before the hearing that your time had been cut back, why didn't you mention it?  If you did mention it, then the Court considered your evidence and ruled against you, so this would not be new information. 

Also, how different would the outcome have been if the Court had considered or known of the cut backs in your work?  For instance, if those cut backs are partial and your income is 15% less than the Court supposed, this may not seem so important to the Judge that she thinks she needs to correct the unfairness of the result.  If it is 40% less, she might.  There are no hard and fast rules that can be applied with consistency.

It is quite common for clients to wind up hiring attorneys after they attempted to handle their case on their own, and it blew up at the hearing, and now they need desperately to get more or better information in front of the judge.  It is very difficult to "unring the bell." 

When these things happen they are a good lesson of why the adversarial court process is to be avoided whenever possible, and of the importance of finding and listening to a competent lawyer early on in your case.

Thurman W. Arnold
http://www.ThurmanArnold.com