Recent Posts in New Mate Income Category

Marital Privileges Not To Testify Against Spouse or Domestic Partner

Sometimes married persons who are in litigation with third parties (i.e., former spouses and co-parents) are asked to reveal communications in deposition, through written discovery, or at trial between them that are protected from disclosure. It may help you to know when to assert an objection to such inquiries, and how to avoid answering such questions altogether.

California recognizes both a "testimonial privilege" and a privilege protecting "confidential marital communications". These privileges are codified in Evidence Code section 970, Evidence Code section 971 and Evidence Code section 980. They are distinct privileges, and the one that most often applies to family law are sections 970 and 980, where one's current spouse is embroiled, for instance, in litigation with a former spouse (or in paternity cases, the other parent). These privileges apply equally to registered domestic partners pursuant to the general application of Family Code section 297.5. Limitations on the marital privilege are generally found at Evidence Code section 972. 

These privileges serve two important public policy goals: 1) to preserve and promote marital harmony and 2) to encourage and preserve confidences between husband and wife. Essentially, the assumption is that society has more to lose from the disruption of the marital relationship that might be caused by encouraging spouses to testify against one another, or to disclose secrets, than it has to gain by learning what was said. This makes sense - however, unrepresented parties often lack an understanding about their rights and privileges, which can be waived if not properly asserted. Hence today's Blog.

The testimonial and confidential marital communication privileges require the existence of a valid marriage or domestic partnership. Keep in mind that they do not apply between you and the spouse or domestic partner whom you are litigating against - these privileges cease to exist as between parties to a dissolution or related family law proceeding. In addition, where no valid marriage existed (i.e., a marriage that was void at its inception (bigamous, incestuous, lack of proper solemnization and the like)), the privileges never arise. In contrast, where a marriage is voidable (minority, fraud, physical incapacity) the privilege exists unless and until a final judgment of annulment has issued.

Testimonial Privilege

• The privilege applies only during existence of valid marriage or domestic partnership
• A married person has a privilege not to testify against his or her spouse in any proceeding. Evidence Code § 970.
• A married person, whose spouse is a party to a proceeding has a privilege not to be called as a witness by an adverse party without the witness spouse's prior express consent. Evidence Code § 971.
• Both testimonial privileges belong to the witness spouse.
• The 970 privilege permits a spouse to refuse to answer questions requiring testimony about the other spouse, whether or not they are a party to a proceeding.
• The 971 privilege only permits a spouse to refuse to answer (or be called) in proceedings where the other spouse is a party.
• The 970 privilege belongs only to the spouse who has been called as a witness - in such cases (i.e., where the other spouse is not a party) the other spouse has no standing to prevent their spouse from voluntarily testifying.
• The 971 privilege belongs to both spouses. Thus, even if spouse B is willing to answer questions about spouse A in pending proceedings involving spouse A, spouse A can assert the privilege to bar the testimony that otherwise might have been obtained.
• Once the marriage is terminated by Final Judgment (for instance, even a "status termination" on bifurcated proceedings where other issues remain reserved and therefore open - like property division or custody), the privilege evaporates (but see the confidential marital communications privilege below).
• The privileges do not apply to proceedings brought by one spouse against the other.
• They do not apply to certain types of hearing, including competency or commitment/conservatorship proceedings (since alleged mental or physical condition may be in issue).
• These privileges do not apply to juvenile court proceedings. [EC section 972(d)].
• Trial courts are not required to inform spouses of their rights not to testify - being uninformed and then giving testimony that could have been avoided does not operate to permit the testimony to be stricken.
• There are critical exceptions to the privilege that apply in family court proceedings [EC section 972(g)]. These include:
  • A married person cannot claim the testimonial privilege to refuse to answer questions about issues relating to income, expenses, assets, debt and employment of either spouse.
  • An action brought against the spouse by a former spouse to establish, modify or enforce a child, family or spousal support obligation arising from the marriage to the former spouse.
  • An action brought against a spouse by the other parent to establish, modify or enforce a child support obligation for a child of a nonmarital relationship between the parties.
  • In proceedings brought by a guardian of a child against a spouse relating to a child support obligation.
• Note that the testimonial privilege in the exceptions above (disclosure of income and assets, etc.) remains intact if other information is sought beyond the scope of these finance related exceptions, as to the requested disclosure of such other information.
• There are two exceptions in which a spouse may be deemed to have waived their marital privilege to refuse to testify or be called as a witness:
  • Unless erroneously compelled to do so, a married person who testifies in a proceeding to which his or her spouse is a party, or who testifies against the spouse in any such proceeding, waives their section 970 and 971 privileges in those proceedings for all purposes. 'Erroneously compelled' means under circumstances indicating "irresistible force", for instance where a judge orders the spouse to answer the question.
  • A married person cannot assert these privileges in a civil proceeding which they themselves have brought, or are defending, for the "immediate benefit" of his or her spouse, or both jointly. In such cases the privileges are effectively waived. [Evidence Code § 973(b)]. A common example would include an action for personal injury damages against a third party.

Confidential Marital Communications' Privilege

Absent a waiver or an exception, a married person, whether or not they are a party to proceedings, has a privilege to refuse to disclose confidential communications between the married person or their spouse made while they were married or domestic partners. Evidence Code section 980. 

Here are some general points to understand as to the limitations of this privilege:

• There must be a valid marriage or RDP at the time of the communication.
• This privilege survives the dissolution of the marriage itself.
• Each spouse or former spouse holds and can assert the privilege.
• Only "confidential communications" are exempted from disclosure. A "communication" means a written or oral statement or act intended to convey a message.
• As to the existence of assets and debts, it doesn't prevent disclosure of the fact of the existence of same - it only protects communications about those subjects.
• The communication must have been made in a setting that reasonably implies a confidence. There is a presumption that communications between spouses were made in confidence, but that presumption can be overcome upon a proper showing.
• If a third person was present, then there may not be a presumption that the communication was intended to be "confidential" or the presumption may be rebutted.
• The privilege will not exist where the party asserting it is abusing the "mantle of confidentiality", for instance where it is part of an assault by one spouse upon the other.
• It cannot be asserted where its application would serve to enable or aid a crime or fraud that is being attempted (although the privileges under EC sections 970 and 971 may apply).
• It does not apply to proceedings against the spouses themselves, and there are other limited exceptions (juvenile court proceedings, for instance).

Thurman Arnold, CFLS

    "(a) At a hearing on any order to show cause or notice of motion brought pursuant to this code, absent a stipulation of the parties or a finding of good cause pursuant to subdivision (b), the court shall receive any live, competent testimony that is relevant and within the scope of the hearing and the court may ask questions of the parties.

    (b) In appropriate cases, a court may make a finding of good cause to refuse to receive live testimony and shall state its reasons for the finding on the record or in writing. The Judicial Council shall, by January 1, 2012, adopt a statewide rule of court regarding the factors a court shall consider in making a finding of good cause.

    (c) A party seeking to present live testimony from witnesses other than the parties shall, prior to the hearing, file and serve a witness list with a brief description of the anticipated testimony.

If the witness list is not served prior to the hearing, the court may, on request, grant a brief continuance and may make appropriate temporary orders pending the continued hearing."

Family Code section 217 will cause a sea-change in day to day family court proceedings across our state, unless family court judicial officers ignore it to the limited extent possible by court rules.  It will likely have immense financial and resource consequences upon not only the courts but upon parties to family court proceedings.  It will force the state government in coming years to study whole new paradigms for resolving divorce and domestic partnership dissolution outside the adversary template, including those currently practiced in New Zealand and southern Australia. 

It will also pressure parties to consider mediation, and collaborative processes which occur outside congested courthouses, much more carefully.  The costs of adversary litigation are about to sky-rocket, making mediation even more appealing from a financial perspective (I have written extensively about the emotional and psychological benefits here an elsewhere).  There simply is no governmental money available to absorb the coming Elkins Onslaught. For more information about an alternative method for resolving family disputes, please visit us at www.DesertFamilyMediationServices.com.
  
At the same time, at least in the short run taken together with some of the other revisions that become effective next month, it may encourage more people to litigate more stubbornly and so make mediation seem less attractive than it did before the changes (just the reverse will be true).  Some folks will mistakenly assume that this invites the use of court hearings as a live-testimony forum for sharing unresolved complaints relating to their marriage or domestic partnership dissolution with the other party in open court.  Instead, judges will sustain objections to such irrelevant material and parties who seek to use Family Court as a platform to air relationship grievances will find themselves alienating the trier of fact in ways that will have adverse consequences to them beyond just the time and expense of the exercise. 

The purpose of today's Blog is to introduce you to section 217 and the new changes.  I will follow up with more articles in coming weeks.  Without a doubt the new rules will make all the information I provide on my websites more relevant and timely for my readers. 

Q.  If my wife is living with a male renter, and I suspect they are boyfriend-girlfriend, does this affect the amount of spousal and child support that I have to pay?


A.  The supported party's cohabitation with a person of the opposite sex gives rise to a rebuttable presumption affecting the burden of proof of decreased need for spousal support. FC § 4323(a)(1).  It has no impact on child support obligations, however.

FC § 4323 states:

As stated in Marriage of Schroeder (1987) 192 Cal.App.3d 1154, 238 Cal.Rptr. 12, the policy underlying section 4323 [former Civil Code section 4801.5]

Schroeder involved a post judgment modification of a permanent support order by the payor, not an initial pendente lite request by the supported spouse. The evidence was the former wife had been living with a man of the opposite sex for 18 months, that he didn’t pay rent, that he was regularly employed, that he did not contribute to utilities, but that he did contribute to joint vacations. The appellate court found those facts to strongly suggest a cohabitation. Even then, the issue on remand was not a termination of the support obligation but a determination of the value of the benefits incurred by the former wife which might reduce her needs.

Cohabitation has been loosely defined as not necessarily holding oneself out to be Husband and Wife, but is more than a simple roommate or "boarding arrangement." There must be a showing of a sexual, romantic or at least a "homemaker-companion" relationship. Marriage of Regnery (1989) 214 CA3d 1367, 263 CR 243.

Marriage of Geraci (2006) 144 Cal.App.4th 1278 reversed a trial court failure to consider the effect of an admitted cohabitation lasting several years with the following comments:

* * *

In Marriage of Bower (2002) 96 Cal.App.4th 893,117 Cal.Rptr.2d 520 there were two permanent support modification hearings filed by the payor husband, one held in 1997 and the second in 2000. At the 1997 hearing the evidence was that the Wife was sharing expenses and living full time at a residence with a man described as a ‘roommate.’ The Bower court noted that the Husband had been wise in not appealing that order. However, by the time of the second application over three years later in 2000, there was evidence that she was sharing at least one bank account with her "roommate," and she even stipulated she was cohabitating.

Under those circumstances, together with evidence of an increased income from her employment, it was not an abuse of discretion to reduce the Wife’s spousal support and then terminate it at the end of one year.

Bower and those cases cited herein regarding cohabitation are dealing with modifications of Permanent Spousal Support orders. They all are based upon the "two can live more cheaply than one" theory or upon actual expenses of the supported party being regularly paid for by the cohabitant beyond loans and gifts. There is no reported case that upholds a trial court refusal to provide spousal support at the temporary hearing stage.  However, I suspect most courts will apply the presumption there as well.

The philosophy underlying the cohabitation statute is that parties who share a household and live in a meretricious relationship should not benefit by continuing to receive spousal support without consideration of the reduced need this sharing produces.

Finding cohabitation just allows for the aid of a statutory presumption to assist in the presentation of factual evidence. The effect is the same without the presumption even for mere roommates, as those contributions to the obligee's living expenses may also support a factual finding sufficient to modify spousal support since rent is income.

Nonetheless, cohabitation is offensive to some judges and they be willing to terminate the spousal support obligation instead of merely reducing it.

Note that once you prove a cohabitation the burden of proof shifts to the supported party to show that they still need support. That is their problem, not yours.  Nonetheless, if you can show a substantial reduction or the end of any need for alimony you would be well advised to present that evidence.

Finally, you are not entitled to know the income of the other party as new-mate income cannot be considered by the Courts. 

For domestic partnerships, even though the statute speaks in terms of opposite sex couples it is highly unlikely that a trial court would not reduce or terminate partner support with a same-sex couple where male former partner is cohabiting with a male and so on.  Since 2005 the California Family Code is to be interpreted as applying evening to same sex couples.

If a homosexual (as opposed to bi-sexual male) is now living with a female should the opposite sex presumption be applied?  The answer would seem to turn on whether the relationship is romantic and/or intimite.  Similarly, if a former wife is now living with a female roommate and it can be established that relationship is intimate, then the same reasoning as in the above cases will likely apply.  We await appellate court pronouncements on these interesting questions.

Q.  I remarried in August, 2009, and my new wife is a doctor.  She has one child from her prior marriage and I have two.  I am still paying my former wife alimony and child support even though the kids we have together live at our home 40% of the time.  I have been hit hard by the economy and we largely depend upon my wife's medical income to make ends meet.  Now my ex is threatening to take me back to court to increase my support based upon my new wife's income, while my own income is down from when the court last decided it.  My new wife is upset at the idea that my ex can learn anything about the medical practice or income.  What should I do?

A.  If there has been a material decrease in your income since the time of your last order, you may safely file a support modification motion to lower your child support and to lower or possibly terminate your spousal support.  Whether that is advisable based upon your numbers has nothing to do with your new mate's income, and should not cause you to hesitate - but again, it does depend on the actual respective numbers between you and Wife 1, which you did not provide me.  You also need not worry about W1 filing a motion to increase (you can't stop her, but she will not win based on W2's earnings).  Maybe you should give her this link so she will think twice.

California law is quite clear that new mate income cannot generally be considered against you in ordering or modifying child or spousal support.  The controlling California Family statute is section 4057.5.

In the normal situation, Family Code section 4057.5 leaves the Court no discretion to consider your new wife's earnings, period.  You do not need to report those earnings on your FL-150 (Income and Expense Declaration). This is a statement of California legislative policy effective in 1993 when this section was added to the Family Code.  This is true for both spousal and child support.

However, section 4057.5 does contain an exception for the "extraordinary case" which the statute makes clear is intended to address situations where "where excluding that income would lead to extreme and severe hardship to any child subject to the child support award" or where "a parent ... voluntarily or intentionally quits work or reduces income, or who intentionally remains unemployed or underemployed and relies on a subsequent spouse's income."  Even if the court were to find a severe hardship on the children of marriage number one, it would be required not to impose a severe hardship on your wife's child by reallocating her income to you for purposes of supporting your two children. 

In practice, so far, Courts almost never find facts sufficient overcome this clear statutory prohibition.  So far there is no published California appellate decision defining these extraordinary circumstances.  No doubt one day someone will so abuse this protection and hide behind it that we will get a reported decision that fleshs out how bad someone needs to behave before the protection is lost.  But "extraordinary" means really extraordinary.  In the average case, your new Wife has nothing to be concerned about. 

With regard to attorneys fee awards, however, there is authority for an argument that new mate income may be considered in granting or denying an attorney fee request, but the odds are against a judge doing that.

Incidentally, this section also applies to income from nonmarital partners as well as new spouses.  In one reported case (IRMO Loh), a trial court was reversed for inceasing dad's child support obligation after the mother produced photos of the father's "lifetyle" to show imputed nontaxable income in the form of his new girlfriend's contributions to him, since she paid for all his toys. 

The new mate question is a subset of the "imputed income" situations where a father or mother may quit work or reduce hours because they are relying on their new mate to contribute the difference.  That is not likely going to be an extraordinary case, but  W1 can separately seek to impute income to you on the basis that you have a higher earning capacity than you are exercising.  Earning capacity and imputed income is a blog for another day.  Also, I will mention here that another argument exists in favor of W1 that has nothing to do with the right to obtain the records or income of W2:  Equalizing the lifestyle's of the two households where yours is rich and grandiose and W1 is impoverished (an extreme example) pursuant to FC section 4057(b)(4).

The tax returns are privileged as they relate to your new wife's medical practice.  For instance, if she is a medical corporation (which I recommend be set up), she will almost never be forced to divulge those records.  Even as to your joint returns, you may be entitled to redact the information concerning your new spouse or have the Court review them in camera (meaning they are not turned over to the other side).  Your former mate is entitled to see your side of the tax returns, however, and they are not insulated from scrutiny simply because you filed joint with the Doctor Wife.  If you don't file jointly, your former wife will almost certainly never get her hands on your new wife's Married Filing Separately (MFS) returns.  Structuring things this way may or may not be advisable and you should consult a tax accountant.

An interesting twist here is that because you marry a higher, wealthy earner, your taxes actually increase because under federal IRS (and the California FTB), you are responsible for one-half of your new mate's income - and this is true even if you don't file jointly.  One case (County of Tulare vs. Campbell) has held that this additional tax you become liable for can form the basis for a reduction in your support because you have less net income available for support after the tax hit is deducted.  Hence, based on these tax consequences you may have an additional argument for decreased support - although a Court may try to deny you some discretionary offset to even the score since this feels a bit unfair to the spouse who is  primarily supporting the children and so lessen the downward modification.

The take-away:  So long as you are not playing games, have not intentionally reduced your income by relying upon your new mate's income, and there is no really extraordinary difference in the two households, your new wife's income is just not relevant and so it is protected.

Q.  I have two children from a previous marriage.  I remarried two years ago, and my new spouse earns $8,500 month.  While my hours have been reduced during this recession and my monthly gross averages $3,500.  The ex is threatening to take me back to Court to increase child support based upon my new mate's income.  Can she do this?

A.  Of course ex-spouses can always take the other back to court, but that doesn't mean they will win.  We call these support modification proceedings.  In order to obtain a new order, she must prove there has been some material change of circumstances with regard to her needs, the childrens' needs, or your ability to pay a greater sum in support.

The key California statute on when and how new mate income can be considered is Family Code section 4057.5.  The basic rule is that courts cannot consider new mate or nonmarital partner income in the context of making child support or support spousal orders.  This means as a general proposition that your new wife's income of $8,500/month is not to be inputted into the support guideline formulas. 

There are two exceptions where new mate income may need to be disclosed and where it can be considered in setting child support:  1) Where there are "extraordinary circumstances" that would cause the exclusion of this income to create an extreme or severe hardship to a supported child.  However, if this hardship is shown, the court must first consider the effect of inclusion of new mate income on any other children including the new mate's children, and so that their interests trump the hardship to the child for which support orders are being sought.  2) By marrying somebody with high earnings, a spouse will pick up additional taxes based upon the other's income.  Since as far as the IRS and California Franchise Tax Board (FTB) is concerned, you are liable under community property laws for one-half of your new mate's income, regardless whether you file jointly, the added tax consequences upon this additional income can actually be the basis for a downward decrease in child support (County of Tulare v. Campbell) since there is less after tax income available to you from which to pay support.

There are very few reported California appellate decision on new mate income or which explain how FC section 4057.5 is to be applied.  In Marriage of Loh (93 CA4 325) a mother/former spouse convinced a trial court, based upon photos of the father's extravagant lifestyle (homes, cars, etc.) which were funded by his girlfriend's income and assets, to impute income to him for purposes of basing a child support award.  The appellate court reversed, stating "Evidence of lifestyle, particularly a lifestyle subsidized by a new 'nonmarital partner', is not a cheap substitute for proper discovery of income reported on tax returns."

In a very recent appellate decision (Marriage of Knowles (Oct. 2009) 178 CA4 35) a trial court was reversed after it accepted the former wife's argument that the community property income and assets of both he and his new wife should be used to determine his income available for support.  The trial court's mistake was include the half that belonged to the new wife, although it could have included just the half that belong to him.   There was no evidence of extreme hardship that justified considering the new mate's half. 

We’ve waited a long time for another case dealing with consideration of new-mate income under Fam C §4057.5. One of the few cases that has, In re Marriage of Wood (1995) 37 Cal.App.4th 1059 is cited here, but it came down in 1995. Neither the statute nor the cases provide any definitive answer regarding what actually constitutes either an “extraordinary case” or an “extreme and severe hardship,” although Wood seems to say that new-mate income can be considered where one of the parents is voluntarily unemployed or underemployed.

Rather than arguing for NMI (new mate income), a party seeking to have income assigned to a person who has remarried or is living with a nonmarital partner may find more success by arguing that income should be imputed to that spouse on the basis that they have an earning capacity which is not being realized.  For instance, if because your new spouse had sufficient income you chose to quit work or take a lower paying job it might appear you are shirking your support responsibilities.  Rather than charging you with NMI, a trial court could find that you had the ability to earn X dollars a month and so charge you for this phantom income by making that the basis for a support award.  Then, the community property (including your new mate's share) could be tapped to satisfy this obligation.

Incidentally, a California prenup can be an effective way to limit this exposure.