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Recent Blog Posts in March 2011 |
| March 30, 2011 |
| TAX TIME Advice for SEPARATED COUPLES About JOINT TAX RETURNS |
| Posted By Thurman Arnold |
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Q. I'm separated from my ex-husband, and we are in the process of a divorce. He has asked me to file jointly on a 2010 return, and I am wondering if this is a good idea. Any suggestions?
Trudy
Trudy:
I am neither a tax specialist or a CPA. As a family law attorney who is frequently asked this question, I can answer it generally (and do answer it specifically for my clients). I would need much more information in order for you to rely upon my suggestions in answer to the question you present to me. This question is highly fact/situation specific.
You refer to your husband as your "ex" which people commonly do even when they are still married but an action is pending, and I am assuming that there was no termination of your marital status in 2010 in answering this question. If your marital status was indeed terminated on or before 12/31/10, you cannot file jointly for that year.
The chief attribute of filing a joint tax return (for couples who remain married at the end of the tax year), besides potential tax savings from better tax treatment for married couples (who must be opposite-sex gendered under federal law), is something called "joint and several" liability for any amounts due and owing either based upon the return itself, or that may arise later if there is an audit and a deficiency is assessed against either/both of you - if jointly filed, the tax assessment will be joint.
If you file jointly and taxes were underpaid or under-reported, the Internal Revenue Service holds you each equally responsible for the entire amounts that should have been paid. In my experience the risk of these sort of deficiencies exists most frequently where one or both parties is self-employed, particularly in a business. People write off all kinds of expenses, and the IRS audits very few returns compared to the number that are filed. Some statistics (Kiplingers) say this one out of 150 personal tax returns. The risk of tax reporting abuse is high where the IRS is relying upon schedule C's. Perhaps obviously, business write-offs are much more susceptible to IRS attack than payrollees - depending upon what salaried employees claim as write-offs.
If you received spousal support in 2010 and you file jointly with the payor, he/she doesn't get that deduction and you pay no taxes on what you actually received. Depending upon the numbers, this may benefit you. There is no deduction for child support for the payor. For more information about "Family Support" please use my on-site search engine at the top upper right of this page.
It is common for me to see people who separated and/or filed for a dissolution in the final quarter of the prior year to then decide to file jointly for that year even where spousal support was paid, because the payor may be better off overall by electing to not deduct the alimony payments that would otherwise be deductible (and therefore taxable to you) in light of other deductions (particularly head of household). Often it is useful to have a tax preparer run the numbers both way - married filing separately and jointly. A major reason for this is the head of household deduction, which gets shared in a joint filing but is only otherwise available to the parent who had physical custody of 50.1 percent or better for six months and a day or more during the prior year (2010). The high earner gets an advantage from this. Again, I want you to check with your accountant.
There may be other benefits that accrue to a child or spousal support recipient where parties file jointly - if parties file jointly, because the California support guidelines are supposed to be "tax-effected" in the sense that people's actual filing status should be inputted into guideline support calculations (see Family Code section 4059), the payor has more "net disposable income" available to pay child or temporary spousal support when they file MFS (married filing separately) or joint. They pay the greatest taxes as "single", and so their support is lowered. However, these advantages only last so long as the marriage has not been legally terminated, whether by
bifurcation of marital status or otherwise.
I find that parties are better off cooperating about joint tax filings, when it is safe to do so. If you can file jointly because you are still married, and IF your soon to be ex-spouse gets a benefit from that joint filing (depending upon you receive spousal support or not) that is important to him (or her), I recommend that you negotiate a deal where he/she pays you a tad more support in exchange for helping him/her out on the joint filing. You will also want to agree how to divide any refunds - some or all of this refund may be community property depending on how late in the prior year you separated (monies paid to taxing authorities from community property sources remain community property).
Remember - we want to pay Uncle Sam as little as is legal. We want to make more money available to support children. Take advantage of the bias in favor of married couples when it makes economic sense for you. Cut a deal that benefits you too! This issue may give you important leverage that will help you to support the family in terms of net dollars. Otherwise, given the risks why file jointly at all?
Thurman W. Arnold, C.F.L.S. |
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| March 24, 2011 |
| Overcoming the PRESUMPTION Against SPOUSAL SUPPORT in DOMESTIC VIOLENCE Cases |
| Posted By Thurman Arnold |
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Q. My wife obtained domestic violence restraining orders against me. The truth is I was not guilty of what she claimed I did, but the judge at our DV hearing said that all he needed was a 'preponderance of the evidence' to issue those orders against me. He said the evidence needed only to tip "slightly" in her favor, and he evidently believed her even though she had no witnesses and she was never injured in any way. I had no idea it would make my life a living hell.
After I was kicked out of our home, she took control of 20 properties that we owned together, and raided our bank accounts - in fact, even before she called police that night, she was moving money out of our joint accounts. I was forced out with nothing, including my tools that I need to use as a diesel mechanic (most employers expect mechanics to work with their own equipment, and there is no way for me to free-lance without the tools). I left with only the clothes I was wearing. She was planning the whole thing.
It is now 18 months later and I am living with family. I haven't had access to anything that we amassed during our marriage, which include rentals and the properties that I owned at the time we were married (she made me put her name on the deeds). I need spousal support help. I have no job and I have no way to get one. But my lawyer tells me that I am cooked - that judges won't ever award spousal support to anybody that has had domestic violence orders issued against them.
What do you think?
"Fred"
Fred:
This is a very difficult situation, and assuming that your wife trumped these charges up against you I am sorry for your circumstance. It happens alot. Many litigants and their attorneys will exaggerate, and even invent, domestic violence scenarios to gain advantage in divorce cases. To assume that every person (be them a man or woman) who claims to be a victim of domestic violence really has been would be naive. There is no question that major benefits can inure to parties who successfully allege domestic violence. While I recognize that the majority of DV victims are women, I have seen cases where I was convinced a female claimant was gaming the system. How could it be otherwise - there is no gender priority for truth.
These benefits for falsely asserting DV include:
- Exclusive residence possession (kick out orders) [FC §6321]
- Ensuring the other party has limited access to children [FC §3044]
- Making their own spousal support claims seem more meritorious [FC §4320(i)]
- Anticipating and cutting off an anticipated spousal support request from a lower earner spouse [FC §§ 4320(i) and 4325]
To be fair to judges, these cases are hard to evaluate. The California legislature has set a very low standard of proof and hasn't cleared up inadequacies, ambiguities, and contradictions within our own Family Code statutory scheme and so a default strategy has been assumed that it is appropriate to treat DV offenders, once a finding has been made, quite harshly (a good example of this is that the statutes below reference FC § 6211, when domestic violence is not really defined anywhere in the California Family Code). There are few appellate decisions that guide trial courts, and the ones that exist are based upon bad facts at least as far as the alleged perpetrator is concerned in the sense that the DV offenses were serious. There is no good appellate court case yet on behalf of an alleged abuser who committed a relatively minor infraction (i.e., damage to property with no physical threats or violence), and none that speak to mitigating circumstances.
I want to be very clear that I abhor domestic violence. But I abhor manipulative litigation strategies just as much - because I believe that domestic violence comes in many forms, and that abusing the system to gain power in legal proceedings is also exactly the type of violence that people, possibly like you, should be protected against. The problem for judges is that it is hard to spot, and making mistakes can result in deaths.
So this is where you are:
California Family Code section 4325 provides:
"(a) In any proceeding for dissolution of marriage where there is a criminal conviction for an act of domestic violence perpetrated by one spouse against the other spouse entered by the court within five years prior to the filing of the dissolution proceeding, or at any time thereafter, there shall be a rebuttable presumption affecting the burden of proof that any award of temporary or permanent spousal support to the abusive spouse otherwise awardable pursuant to the standards of this part should not be made.
(b) The court may consider documented evidence of a convicted spouse's history as a victim of domestic violence, as defined in Section 6211, perpetrated by the other spouse, or any other factors the court deems just and equitable, as conditions for rebutting this presumption.
(c) The rebuttable presumption created in this section may be rebutted by a preponderance of the evidence."
Hence, in the event of a criminal conviction of DV within five years there is a rebuttable presumption of no support, period. However, notice that rebutting this is by the same standard that the judge remarked to you about when he/she issued the restraining orders - in other words, "more probable than not." One hopes that judges apply the same standards to each question they face.
Family Code section 4320(i), regarding post-judgment spousal support, is being interpreted by courts as applying to temporary support order applications as well. It reads:
"In ordering spousal support under this part, the court shall consider all of the following circumstances:
* * * (i) Documented evidence of any history of domestic violence, as defined in Section 6211, between the parties, including, but not limited to, consideration of emotional distress resulting from domestic violence perpetrated against the supported party by the supporting party, and consideration of any history of violence against the supporting party by the supported party.
* * * (m) The criminal conviction of an abusive spouse shall be considered in making a reduction or elimination of a spousal support award in accordance with Section 4325."
4320(i) does not require evidence of any kind of conviction, although of course that would be relevant - and it cuts both ways: It gives the court discretion to award more spousal support just as well as giving the court to deny spousal support, upon "[d]ocumented evidence." Subsection (m) just restates 4325.
Hence, whether a presumption against spousal support attaches per 4325 or is just in the judge's mind under 4320(i), what you need to present is evidence that will overcome the presumption of 4325. This means: Why should the court not follow the legislative directive that presumes you are not entitled to spousal support? There is no case yet that gives trial courts any guidance on this subject (i.e., "what needs to be proved?"), and it will take a dedicated judge who is deeply passionate about the law - and the proper facts - to turn the populist pendulum that is still in reactive mode to the deplorable sins that true DV generates.
I recommend the following arguments for rebutting the presumption, as applicable:
- Assuming that you had a criminal conviction, argue that you served your time
- Assuming that you were ordered to complete a 52-week batterer's program, argue that you complied
- If you have a long term marriage, i.e., for more than 10 years point that out
- Did your Wife allege a single incident or a pattern of incidents? One of the thorny problems concerning domestic violence restraining orders is that so many different types of conduct, ranging from merely annoying to life threatening, can give rise to them. What your wife alleged in terms of the apparent seriousness (or lack of injury) of your offense might mitigate in your favor by a preponderance of the evidence when balanced against your need for support and all other relevant circumstances considered together
- If there is evidence that you and your wife were mutual combatants at any time, i.e., that (as with too many families) you both behaved badly, present that evidence
- Remind the court that at worst you have the same burden to justify support now as your wife had to justify DV orders then
- Point out that you have been deprived of your livelihood by reason of your Wife's conduct, and that she is, as you say, in control of not only your properties, your joint funds, but also your tools
- Demonstrate that your spouse took control of all the assets, even before the DV situation erupted, not to attack the prior court ruling (which your present judge will always assume was valid and binding), and that she has maintained this control to such an extent such that you have been entirely deprived of your community property entitlements (in breach of fiduciary duties owing you from her) but also that you have been deprived of the very items that would allow you to be self-supporting. Where DV is indeed trumped up, the reporting party tends to behave in predictably controlling ways. Point this out together with any relevant conduct on the part of your spouse - has she met her sua sponte disclosure obligations? Has she ruined your credit by not paying some of property creditors that you are obligated on? Has she changed your mailing address so that you didn't receive information that might impact your livelihood?
- I cannot overstate that the likelihood is that only a breach, or the substantial appearance thereof, of fiduciary duties on the part of your spouse will meet your burden. Fiduciary duties and alleged spousal abuse are linked at the hip....
- Remind the court more than once that you have met your own burden of proof by the same standard that allowed you to get into this mess
- Request an evidentiary hearing to establish all of the foregoing. Remember Family Code section 217!
This is a difficult situation. We need a good appellate decision on it, or some legislative guidance.
As I come up with other ideas I will come back and supplement this article.
Thurman W. Arnold, III, CFLS
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| March 22, 2011 |
| For Attorneys Only: Announcing LEGAL WEBSITE OPTIMIZATION By AttorneyWebWizard.com |
| Posted By Thurman Arnold |
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This Blog is for attorneys only. Clients and others, please don't peek! I aim to have a discussion with my brothers and sisters in the law about optimizing their websites and making a difference in how they view their practices, and ultimately how you view "the lawyers" that are the nub of too many jokes. I am also interested in speaking to related fields like mental health professionals and others.
Attorneys: The Internet offers a multi-textured forum to not simply describe what you can do for people in terms of helping them at the most difficult of moments, attracting those whom you wish to represent, or describing how you might perform your tasks, but it is also a medium to showcase your attitudes, tone, and willingness to serve the community of people who desperately need assistance but are suspicious as hell (for good reason) about the truthfulness and sincerity of lawyers like you and me. I want to help brand a select number of lawyers in various practices, and to help you develop your own personal signature.
Until now we viewed, and the non-lawyer marketeers taught us to view, our websites as mere billboards for attracting clients. There was zero heart in it. These "website professionals" know nothing about the law, they know nothing about your personal talents, your commitment, and most importantly they nothing about the needs of the consuming public. How are they going to adequately be your spokespeople?
I believe that we have a huge opportunity to shape not only our own destinies and business futures, but also the ability to speak to potential clients in a direct and forthright manner that provides real time benefits both in terms of information and perspective. By investing thousands of hours managing my own websites and watching how the search engines respond, assisting numerous others, not to mention investigating all of the costly marketing scams that non-lawyers would foist upon you as a "necessary" or "critical" adjunct to your on-line marketing campaigns, I've gained insights that I hope to share with some of you - yes, for an honest fee that rewards my own dedication and efforts and the insights that I've accumulated.
But - my services are only available for lawyers and legal firms that genuinely wish to take the high road and to serve the public interest. Those attorneys (or their IT people) who simply want a new marketing buzz must go elsewhere. I am looking to make a difference in my world.
How about you?
Legal Specialist Marketing
I have launched
Attorney Web Wizard in order to provide lawyers something special and unique in terms of a legal insider's guidance and advice about the arcane mysteries of the Web that hasn't come before, and that really can only be clumsily replicated without investing huge time and energy that I already know you don't have available to you.
I invite you to duplicate my efforts, or to hire others to try. Or, you might send me an email or call for a chat!
Okay, I agree - this is silly. We won't put it on your website!
For more information contact Thurman Arnold, CFLS
(Sincere inquiries only!) |
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| March 22, 2011 |
| What to Do If My CASE Is Being TRANSFERRED BETWEEN COURTS in Riverside County? |
| Posted By Thurman Arnold |
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Q. My Wife's attorney filed a dissolution at the main Riverside County courthouse in Riverside, but we both live in the Coachella Valley. They should have filed it in Indio. It is a long drive for me to downtown Riverside from my home and I don't want the case there. But I need immediate help with spousal support and attorney fees and we filed a motion for these orders that had to be set in Riverside. Now the other side agrees they filed in the wrong court and my attorney is concerned about when my motion will finally get heard if the case gets transferred to Indio. Is there anything I should do or know?
David
David:
This can be a real problem in terms of timing and delay. Because of the Elkin's onslaught many judges are feeling cranky and overburdened by the significant increase in demands upon their time (having to hold evidentiary hearings whenever a party requests them). Your wife and her attorney may well be intentionally stalling your access to justice. It is highly likely that when you arrive in Court for the hearing on your motion, the judge is going to refuse to go forward insisting that "we already have enough business here." He may order that the case be transferred to Indio, and not issue any orders at all pending that transfer.
It typically takes a month or more to accomplish a transfer between courts, even those within the same county. In the meantime, you fall off the map. The inefficiency is really quite extraordinary, and flies in the face of the reasons for the Elkin's changes (premised on better access to justice and ensuring due process in family court cases). Elkins is creating a lot of problems for underfunded court administrators, and appears likely to have the reverse impact than was intended.
Moreover, you may find that the motion for support that never gets heard in Riverside effectively goes off calender, meaning you may have to refile or submit ex parte paperwork to the Indio judges to have it reset for hearing. In the meantime you could lose possibly two to four months of time. There may be an issue whether the orders, when you finally obtain them, are retroactive to the date your first filed for them.
In order to avoid this, do not assume that the Riverside judge or the clerks will properly manage your case, or that a hearing will get re-set by them in the interim while the transfer is occurring - without more. Have your attorney insist at the hearing in Riverside that before you leave that day a new hearing date for your motion has been set in Indio and if the Riverside judge refuses to listen, make sure that your objections are placed on the record. That is the best you can do.
T.W. Arnold, CFLS
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| March 19, 2011 |
| Local Businesses: Who Has the Best CHINESE FOOD in Palm Springs? |
| Posted By Thurman Arnold |
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The Supreme Dragon Chinese and Seafood Restaurant
As you might have noticed, most of what I Blog is fairly dry and informational. Humor or entertainment are not my greatest talents. Every once in a while I try to lighten things up by supporting local business people whom I really admire or believe in. I don't do this often, and my opinions cannot be purchased.
One of my favorite Palm Springs/Cathedral City restaurants is the Supreme Dragon, located at 4771 East Palm Canyon Drive, Suite B, Palm Springs. David and his wife are located at the Rim Rocks Shopping center (almost next to Von's) just east of the Mercedes dealership (at the western edge of Cathedral City). They have been at that location for probably ten years.The location is not a high traffic area, although it is conveniently situated and is easy to find. I watch them labor hard and long hours, and it is time their secret got out.
The Supreme Dragon has outstanding Chinese food, and their seafood is delicious. It is a clean, fast, and it is entirely family owned and operated. If you prefer take out, they put orders together quickly. Be sure to grab one of their paper menus for your home.
I was born and raised in Palm Springs, and in my view the Supreme Dragon has the best oriental food in the western part of the Coachella Valley. I am convinced that you will agree and so appreciate this recommendation! As always I invite comments to my Blogs.
Call them at 760-321-4954 and tell them Thurman sent you!
T.W. Arnold
Palm Springs Family Law Attorney
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| March 14, 2011 |
| FAMILY LAW SANCTIONS and DUE PROCESS: Santa Barbara Trial Court Reversed in IRMO DURIS |
| Posted By Thurman Arnold, CFLS |
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Visitors to my websites know that I am biased in favor of mediation, believing that parties to litigation involving their family should opt to resolve their disputes themselves rather than undertake the perils of having a judge, or anyone else, decide their matters for them. This includes mediators (whose role is not to decide your issues for you but to facilitate you finding solutions). However, I admit that sometimes this doesn't seem possible. Too often one or both parties are reacting so deeply to their hurt or resentment and spinning with angry, busy minds that they perceive family court as the killing field for their unresolved conflict - a public forum for the spectacle of flogging the other side.
A recent reported decision illustrates the financial waste that occurs in high conflict family court battles, where there are no winners and only losers. My remarks are not intended to convince you to hire me, or to impugn judges whom I contend are struggling valiantly to protect children and mete out justice as best they can within a system that is not equipped to cope with the multi-dimensional challenges of emotional divorce and its aftermath: The trial judges are not broken, but the framework for government sponsored attempts to regulate the processes of divorce and domestic partnership dissolution is. Nor should it be read as an indictment of divorce lawyers or any particular barrister. An adversary model for resolving family disputes guarantees that the experience of everyone connected with these cases will be ... adversarial. Surprise!
In the meantime appellate justices are stepping forth to triage for the litigants, their attorneys, and the lower courts. But is it realistic to expect lawyers (in that small relative percentage of domestic cases where people can afford them) or judges to not be swept into the reactive thinking that the parties' disputes are personifying? I say "no". Our brains are hard-wired to respond to conflict in predictable ways. While we all ought to conduct our affairs in increasingly enlightened and ethical ways, and lawyers and judges surely benefit by incorporating the wisdom of the mental health sciences, a legal and cultural framework grounded in adversarial processes can never escape them. How could it be otherwise?
Marriage of Duris & Urbany
On March 14, 2011, the Second Appellate District (Division Six) reversed Santa Barbara trial judge Colleen K. Sterne's decision to discipline a self-represented litigant (an unemployed attorney) for, among other things, her earlier attorney's tactics in filing a motion to compel document production evidently without first attempting to resolve the disagreement informally. Discovery motions generate large fees and consume valuable judicial resources.
At the end of the hearing on Wife's original requests (the custody and support modification request she'd filed eight months earlier), the trial court imposed $10,000 in attorney fee sanctions against the Wife. Husband's attorney had evidently suggested that the Court do this somewhere in his Reply paperwork, and reiterated the request in his closing argument. The trial court took the bait. Its ruling was found to be an abuse of discretion.
According to the Husband, by the time of the hearing on original OSC to modify custody and support he had spent $25,000 for fees. Wife probably spent a similar but slightly lesser amount since she was in pro per for many months. Their fees and costs for the appeal probably were $20,000 more apiece (but Mr. Urbany handled his own appeal). Husband will get none of his money back, and Wife will recover only a portion of hers. Neither will achieve an emotionally satisfying resolution and their matter likely obsessed their lives over the year and a half. This case is "a pox on both your houses."
Wife's former attorney, Jacqueline Misho, was hired some six months into the proceedings, initiated when the Wife filed a motion for "100% physical and legal custody" of the parties' two children, plus more child support. Attorney Misho took an aggressive stance in advancing her client's claims and filed a discovery motion to compel production of documents. This was unsuccessful. The attorney was then let go. A week later the Wife's custody motion was heard. Although sanctions against her had not been requested by way of a noticed motion (possibly because there was little time in which to file one), Husband urged that she should pay his attorney fees. At hearing end when Judge Sterne announced her intent to hit Wife with $10,000 in sanctions as a share of the Husband's costs in part based upon the prior discovery motion filed by Misho, Wife complained "How am I being penalized for hiring [Misho]? How was I supposed to know? I thought she was the best there was." In my experience, "the best there [is]" often means the meanest and toughest. Many family law attorneys advertise themselves in such a fashion.
I have no personal knowledge about either party's attorney beyond what Google searches of their names retrieve and what a review of the California State Bar website discloses. Both are reputed to be tenacious divorce litigators. The problem with vociferous advocacy, irrespective whether it occurred in this case or not, is that it tends to generate a story of its own and so to increase the conflict noise volume - I confess I know this from my own past personal experiences. It can infect the process - there is something of a reciprocal feedback loop that occurs between high conflict litigants and their attorneys that is difficult to resist. Sometimes it seems to be the only choice, but usually that justification is borne of the tensions within the conflict itself and is not necessarily true.
Family law litigation becomes particularly nasty when attorneys for each side compete to inflame the trial judge with sound bite characterizations about the other. Some clients demand this from their counsel or become quite perturbed if their advocate doesn't respond in kind to these sorts of attacks. Lawyers who are being paid large sums are pressured to speak their client's minds (read: resentments) or risk a loss of confidence by their client. Of greater concern to the integrity of the legal professional generally, there are many family law attorneys whose entire strategy is geared around slandering the other litigant (or their attorney), often by exaggerating or misrepresenting the facts or history of the case solely as a means of confusing the judge or just plain pissing the court off in the hope of creating a favorable bias. Tit for tat then threatens to overwhelm the process. This sort of behavior can include ignoring the procedural rules for raising the issues to be decided, which is a form of ambush that can be effective exactly because the answering party is unable respond to an oncoming train if there is no forewarning.
I am not saying that this was either attorney's conduct in Duris as I lack sufficient details to make a full assessment; instead I am pointing out that adversary litigation programs lawyers and unrepresented parties to use whatever tactics that might work, and sometimes to try them all. This seems to be viewed as not only within the standard of care for zealous advocacy but to be required by that standard. I can comment that one irony of this case is that while the Wife's attorney allegedly failed to act in a cooperative manner in choosing to file a motion to compel without first attempting to solve the argument informally, Husband's attorney seized upon that misstep to buttress a request for sanctions that was never properly placed before the court. Sometimes these sound bites do stick; they did here, at least with Judge Sterne. Unfortunately, under these rules of engagement lawyers are thus encouraged to act as badly as the talking heads we see arguing on many 'news' programs, something that the American public views as a form of 'entertainment.'
This is one of the many dangers of adversarial litigation. Both sides feel righteously indignant, and attorneys tend to internalize their client's upset so that the boundaries between the client's experience and the attorney's own blurs. It is a recipe for disaster, but understandable given that emotional and angry ex-spouse pressure-cookers are letting out steam on both sides of the table all at once.
The appellate court's decision doesn't give us sufficient facts to discern whether the mother's initial application was well-merited, but Judge Sterne's decision suggests she did not view mom's motives (or her attorney's decision-making) to be in good faith. Wife's request for 100% custody looks to be retaliatory and frankly when this is true - and too often it is, even if not here (Judge Sterne referred to Wife's prior discovery motion as a "fee sink") - trial courts need to discourage such conduct in strong ways, especially when it generates unnecessary fees for the other party or damages children. Some people only respond to monetary slaps. I can merely speculate about these proceedings without reviewing the trial briefs and reporter's transcripts, and emphasize that reading 'between the lines' cannot give the whole picture.
Still this is a published decision of the 2nd Appellate District. Following on the heals of Marriage of Fong released for publication on March 3, 2011, these decisions, along with
Marriage of Tharp, should be read together to glean the larger message. Reviewing courts are holding everyone accountable - litigants, attorneys, and bench officers. Due process and fundamental fairness require every side to cross their own t's and dot their own i's. This is welcome instruction to the entire spectrum of family court members and participants.
Be Careful What You Ask For,
and Consider Asking for Something Different
However inappropriate Ms. Duris' conduct may have been (if at all), the appellate justices ruled that due process required that she be informed in advance that the court was considering sanctions in order to have an opportunity to muster and present evidence in opposition. Husband's request for relief should have been properly placed before the Court and not have been based upon offhand arguments buried somewhere in his reply pleadings or first presented in closing argument. This is a good thing. Last year's Elkins legislation spotlights the public policy goal of ensuring transparency for self-represented and represented family law contestants alike.
Now, eighteen months later the odyssey is not yet ended - the Sterne decision is sent back to the trial court (not likely to be Judge Sterne, who can be disqualified as the judge on the next go-round) "with instructions to conduct a new hearing with proper notice." In other words, to relitigate whether sanctions should be assessed against the Wife.
In the meantime, she is awarded her costs on appeal. No appellate case costs only $10,000, the amount in controversy that led to this appeal. Hence, Husband - who won a short-lived victory at the trial court level - will now likely end up footing not only the bill for his trial attorney, but the Wife's attorney fees on appeal as well (be careful what your attorney asks for!) The saga can be now rebooted. Might it end differently this go-around? I'd wager (and I hope) the parties have had enough and that will agree that Wife will forego her appellate costs while Husband will waive a second sanction's motion. But divorce trance is stubborn stuff.
There are only losers in Marriage of Duris. The children of these two warring parents seem utterly forgotten. The take away is that using California court judges to beat up the person you now find despicable (who then smacks back) may blow up in the face of each contestant; given that people often view justice from the lens of their own desires it is a small wonder that government regulated divorce hasn't found a way to respond to such expectations, and possibly never will until the entire system is jettisoned and recreated.
In the meantime try a different tact, if you wish it and if you can. Work together to resolve your disputes collaboratively or through mediation. Even if the other side seems incorrigible, you determine how you respond. Remember, litigation induces trance - seek equanimity and send your kids to college instead!
Here is a link to Marriage of Duris & Urbany.
Thurman W. Arnold, III, CFLS
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| March 08, 2011 |
| More on Marriage of FONG: Obtaining SANCTIONS for UNCOOPERATIVE CONDUCT IN DIVORCE LITIGATION |
| Posted By Thurman Arnold |
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The March 3, 2011 Second Appellate Court decision of Marriage of Fong is so far the most important fiduciary duty case of 2011.
See my other blog on this site as it pertains to Final Declarations of Disclosure, and here is a link to an article I've written concerning its impact on Family Code section 271 sanctions.
Here is the appellate court's decision in Marriage of Fong. |
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| March 07, 2011 |
| Making DIVORCE JUDGES ACCOUNTABLE - What Is A STATEMENT OF DECISION? |
| Posted By Thurman Arnold, CFLS |
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Given the 2011 changes to the California Family Code brought about by the recommendations of the Elkins Task Force, you need to know about something called a "statement of decision". This is because many family law cases involving temporary or interim orders now require an evidentiary hearing - or a trial or 'mini-trial' - on matters that used to be decided as motions based only upon declarations and argument of the parties or counsel. California Code of Civil Procedure §632 governs this device, and it is not available in straight law and motion proceedings. It is available only on matters where there has been a trial of factual issues.
Newly enacted Family Code §217 directs family court judges and commissioners to hold hearings with live testimony unless the parties stipulate otherwise, or unless the trial court finds good cause to dispense with such hearings. I've written about the Elkins changes extensively elsewhere on this Blog, so please try the search engine at the top of each page for more information about them.
A statement of decision requires the family law trial court to state, on the record, or in a subsequent written opinion, why it ruled the way it did on any questioned fact. It is essentially the same thing as a statement of the court's findings and its conclusions on any controverted issue. Judge's don't necessarily appreciate such requests, however, because they force the bench officer to expend additional time to explain at least some of the aspects of their reasoning, and some feel that it is provocative to ask them to explain their reasoning; the conventional wisdom for lawyers therefore is "don't ask unless you fear you are going to lose."
Statements of decision in family law cases, as with hearings on OSC requests and certainly bifurcated or full on trials, are most important as a tool for a potential appeal. Without them the record on appeal may be quite unclear since the appellate court will have a difficult time determining the fact basis for the trial court's reasoning. Effectively, absent a SOD, this means that the appellate court will only reverse the trial court ruling for errors at law - the reviewing court will presume that the trial court made every factual finding necessary to support its decision. This is one of the problems of asking for them - you are saying to the judge "I think you may rule against me and so I am doing this to protect the record on appeal."
There are important rules about when to request a statement of decision. Where a trial is completed in one calendar day or less (or less than eight total hours over several days), a request for a statement of decision must be made before the court issues its ruling (i.e., before the matter is submitted for decision). This means, before you hear the judge's ruling, not after! There are technical rules about how to add up these hours. This will be the typical family law OSC or Notice of Motion situation where testimony may last from 30 minutes to several hours under FC section 217. Until January 1, 2011, these situations typically included only domestic violence hearings since evidentiary hearings were already required in those cases.
The procedures for statements of decision are to be contrasted with certain statutory requirements that courts make and express their findings on the record in certain statutorily enumerated situations, whether or not these are specifically requested. I will identify those sections in the future.
Check back for further Blogs and pointers on these subjects. If you have a contested hearing with testimony, and you get the sense the judge views things differently then you do, ask for a statement of decision before you hear the decision!
Thurman W. Arnold, III
Certified Family Law Specialist
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| March 06, 2011 |
| How Do I DISQUALIFY The JUDGE Assigned to My Case? |
| Posted By Thurman Arnold |
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Q. My husband has filed for divorce and set a hearing for custody of our children. I was just served with the papers. My girlfriends tell me that the judge assigned to my case may be prejudiced against women. I don't feel safe using this judge. What can I do?
A. While most judges are inherently fair, I believe it is critical to your experience with the Family Court system that you trust that your judicial officer is unbiased. Information from friends about their experience or observations may indeed be useful, but you will never really know why their outcome was what it was and it likely has nothing to do with any kind of prejudice.
One reason why I promote mediation so vigorously it is scary to trust that any given judicial officer, or any person for that matter, to decide life-changing matters for you and your family rather than you and the other party/parent. Litigation should always be the option of last resort, to be used only when you and/or your spouse or domestic partner are so conflicted that you cannot work together. With mediation, no one but the parties decides the outcomes. How could that not always be the best solution?
California allows each party in all civil proceedings, including divorce and dissolution of domestic partnerships, to disqualify one judge within a limited time after the case is filed without any proof of actual prejudice or bias. This is called a "peremptory disqualification" and it is governed by California Code of Civil Procedure section 170.6. It requires you file an 'affidavit of prejudice' in a timely manner. The statute tells you what you need to say. Read it if you are going to use this remedy!
Procedures vary in different counties on exactly when you need to file this document with the court clerk and the timing depends on whether your county uses "all purpose assignments" when the case is first filed, or instead directs hearings to a master assignment department which then assigns the file to particular courtrooms depending upon daily availability. It also may depend on how many judges there are at your courthouse. Please check your local rules and read the section. Eastern Riverside County in Indio uses the direct assignment approach, meaning that when a case is first filed it belongs to one of our two local family law judges. This assignment is determined by the last odd/even numeral of the case and is a matter of the luck of the draw.
Failing to file the document in a proper manner will usually result in your motion being denied, and so you can become stuck with the very judge or commissioner whom you sought to get rid of - giving you a concern that he or she won't like you now for sure (probably not so, but again perceptions of fairness are critical to the orderly administration of justice).
In all purpose assignment jurisdictions you must file your peremptory disqualification no more than least 15 days after you are served with the pleadings (assuming they contain notice of the assignment), or if you've not yet appeared in the proceedings then within 15 days of notice of the assignment.
There is a different set of rules for attempting to disqualify a judge for cause, something that you can try at any time, but this is an uphill battle and judges have an interest in resisting these motions since a finding of actual prejudice does not reflect well upon them. C.C.P. section 170.3 governs those requests. Most jurisdictions have county counsel review and oppose them and it is the judge himself or herself who decides whether to recuse or disqualify themselves - we naturally all think we are fair and how many people can admit prejudice?
Good luck!
Thurman W. Arnold, III, CFLS
www.PeacemakingDivorce.com
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| March 05, 2011 |
| SANCTIONS For Failure to Complete the FINAL DECLARATION OF DISCLOSURE |
| Posted By Thurman Arnold |
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The Preliminary Declaration of Disclosure
I've recently blogged the importance of complying with Family Code section 2103 and
section 2104, which obligate both parties to a pending dissolution, legal separation, or annulment proceeding to exchange a preliminary declaration of disclosure using Judicial Council Forms FL-140, FL-141 and FL-142 (please see our Form Library for the PDF's]. Its purpose is to ensure a "full and accurate disclosure of all assets and liabilities in which one or both parties may have an interest" and it is a prerequisite to successfully performing one's fiduciary obligations in the course of such proceedings. The exchange is supposed to occur "early on" in the proceedings, whatever that means.
No case can be settled and a marital termination agreement or stipulated judgment cannot be accepted by the court clerk for filing or transmittal to a judge for signature unless both parties have exchanged their PDD's. There is a single exception where the other party does not appear in the action (i.e., file a Response and pay the fees) and so the case is resolved by way of a "default judgment." Moreover, where both litigants have formally appeared and either wants to move the case to a trial status so that it can finally be resolved (where for instance agreement is not occurring), a settlement conference or trial date will not be set by the court unless both parties have each complied with the preliminary declaration exchange and have first filed proof of that with the court.
However, beyond simply concluding your case, there are other extremely important consequences for failing to do your half of the heavy lifting in terms of identifying and attempting to value all community and separate property assets by way of PDD. In my practice I find that many client's resent the work that completing these documents entails, and yet there is no way around it. Inadequate or inaccurate disclosure declarations can create grounds for the other party to attempt months or even years later to set aside a judgment or settlement agreement. They can form the basis for breach of fiduciary duty claims. They must be dealt with in good faith. They are critical documents that must not be treated casually.
The Final Declaration of Disclosure
However, there is an arguably greater obligation that is addressed by what is called the Final Declaration of Disclosure. This is a second and final disclosure that is required in all dissolution or similar proceedings, assuming it is not waived by both parties by agreement (not a good idea for reasons I will separately blog). Where the case winds its way to trial on any aspect of it, the Final Declaration cannot be waived and it must be served prior to trial. Family Code section 2105 governs what it must contain and when it can be avoided. It is even more burdensome to fill out and comply with because supporting documents must be attached and it has to bring current all of the information regarding community and separate property not just as of the date of separation or at the time the PDD was filed, but also up to the date that it is prepared.
Based upon an Second District appellate decision issued March 3, 2011 entitled Marriage of Fong, other consequences for disclosure noncompliance are now apparent. The Fongs are one of those unfortunate couples where one or both parties seem conflicted enough that they will litigate on for years that exceed the entire length of their marriage.
Family Code section 2107 authorizes courts to award monetary sanctions for failing to comply with the disclosure obligations. It is often used in conjunction with a request for attorney fee sanctions under
Family Code section 271.
In the Fong case the trial court hit the husband with $200,000 in non attorney fee sanctions under section 2107(c) for "breach of fiduciary duties" relating to nondisclosures in the property declarations, among other things, and heaped on an additional $100,000 in fees and costs per section 271 because it concluded that his side engaged in discovery gamesmanship. Wife had contended that Husband had failed to comply with his statutory disclosure obligations regarding his assets, that he failed to respond to formal discovery, and that at trial he surprised her with documents he'd failed to earlier provide despite requests for them. Husband's alleged behavior is not unusual in high conflict divorce litigation, and so it is important that an aggrieved party, possibly like the Wife in this case, have a meaningful remedy.
Unfortunately, Wife had waited three years from the date the action was filed to serve her Preliminary Declaration of Disclosure, and at the time of the trial that led to these sanctions against the Husband (seven years after the case began) she still had not prepared and served her Final Declaration of Disclosure. Lawyers for "out-spouses" sometimes delay completing the FDD because they fear that they lack sufficient information to do them properly and so are reluctant to have those documents completed and so held against their clients as "judicial admissions" (statements under oath in the pleading files) until later in the proceedings - after they've first gotten the disclosures from the "in-spouse" who probably controls all the information.
In the first reported California appellate decision squarely construing compliance with FC section 2105 together with 2107 sanction's requests, the Second District reversed the trial court's award under section 2107. I can only guess that Wife's efforts cost she and her attorneys between $500,000 and $1,000,000 in attorney fees.
The appellate court did uphold the sanctions award per Family Code section 271 for the $100,000. That part of the ruling is also important, but this blog will be way too long if I cover it here so I will write about it separately.
The Court determined that Wife's failure to have first served her Final Declaration of Disclosure before seeking sanctions by way of motion against the Husband, on the theory that he was himself out of compliance, deprived her of the right to complain. It interpreted section 2107(a) as permitting only a "complying party" to seek the sanction remedies. By the time of a trial on a motion for a sanctions for alleged disclosure misconduct, a party is not in compliance IF she has only served their PDD and therefore not entitled to maintain a sanctions' request.
This case reminds lawyers and parties that the California disclosure statutes mean what they say. It provides useful guidance to attorneys representing the disadvantaged spouse in terms of what they must do in getting their ducks in a row before going off half-cocked. IMHO. Both sides in a California family law case have equal burdens to meet their fiduciary duties. Please take them seriously.
Here is a link to Marriage of Fong.
Thurman W. Arnold, III, CFLS
www.PeacemakingDivorce.com
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| March 02, 2011 |
| Must I Submit My TAX RETURNS to the COURT or to the OTHER PARTY? |
| Posted By Thurman Arnold |
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Q. I have a hearing coming up involving my ex-wife's request to modify spousal and child support. I've received a letter from her attorney demanding I bring my 2010 tax returns to court, and I do have them since I always file early. However, I don't want to produce these. I've always thought that these documents are confidential and that I cannot be made to produce them if I am not trying to borrow money or something like that. What are my rights?
A. The Revenue and Taxation Code sections 14251 and 19542 do declare that our income tax records are generally privileged from disclosure. However, in California that privilege does not bar production and consideration of your income tax records according to
Family Code §3552 in proceedings involving any kind of support requests.
They are always available in discovery proceedings prior to the hearing itself.
However, what I do recommend is an agreement with the other party or their attorney that while the records may be voluntarily exchanged that they be disposed of or returned after the hearing. Always redact your social security number. Note that Family Code §3665(b) prohibits the other side from disclosing the contents of your tax returns to anyone except:
- the court
- the party's accountant
- some other financial consultant providing assistance with the case
- anybody else the court specifically approves
Of course, once you lose possession of them there is little practical way to enforce these limitations. This is a good reason to not simply hand them over in response to an informal request without safeguards in place.
Since you report that you were asked to bring them in a letter request rather than in response to a subpoena or some other form of discovery request that seek the returns prior to the hearing itself, you might hold on to them until the hearing. If they are to be discussed at the hearing (or if you don't exchange them before because no agreement can be reached on how to protect their confidentiality), then bring them but ask the court under FC section 3552(c) to seal them in the file if the court retains them, or to turn them back to you at the conclusion of the hearing. An advantage to you in handling it this way is that the other party won't have the benefit of reviewing them before the hearing, or have the prior opportunity to have them looked at by their expert.
Obviously, for parties who want to see the other side's returns they are better off obtaining them prior through a demand for production (assuming enough time exists since without a court order shortening time production demands don't have to be answered earlier than 35 days from the date of mailing), and receiving on the date of the hearing might justify asking the court to continue the matter to review them if they are complicated.
By the way, the rules are a little different if you file joint returns, or if your returns contain information that relates to a non-party like a new spouse or possibly a family corporation or LLC that you are only one of several participants of, since their information remains privileged and can only be produced under certain circumstances and using specific procedures - which is another Blog.
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