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WEEK 7

Monday, November 8
PAGES: 685-711
CASES: None

    INTRODUCTION TO THE CONSEQUENCES OF THE DISSOLUTION OF MARRIAGE. Introductory note: In Westfall's introduction (last sentence, carry-over paragraph on page 687), he states an outdated statement of law. Since the publication of this text, Texas lifted its ban on permanent alimony.

    GLENDON ARTICLE: Hardisty: The idea that having a child impresses a lien upon all of the parents' income and property to the extent necessary to provide for the children's decent subsistence is faulty in that it fails to take into account the needs of indigent parents. If paying child support means an indigent parent does not have the ability to sustain him or herself, the parent will die and the revenue stream will dry up permanently for the child. This tracks the philosophy behind the Melson rule of determining a parent's child-support obligations. Under this system, created by Judge Melson in Delaware, the parent allows the child to share in the standard of living of the parents but only after the parents keep sufficient income to meet their basic needs based on a standard amount (usually the federal poverty level standard). The child's basic needs are met next. When income is sufficient to cover the basic needs, the basic needs are met next. This approach, called the "Delaware Child Support Formula", is in effect in Hawaii and West Virginia as well as in Delaware. For an overview, see Page 458-459 in the text.

    First line, first paragraph: " ... In barely ten years, following the example of the Uniform Marriage and Divorce Act (U.M.D.A.) as amended in 1973, nearly all American separate and community property states have abandoned their systems of fixed rules for determining how property should be allocated after divorce and have gone over to variants of systems which give the courts substantial discretion to disregard legal title (or the distinction between community and separate property) and to redistriubte the spouses' property in the manner that the judge considers fair." This is a bit of a misstatement in the case of Washington. Washington never had such a system. It adopted, during the first legislative session in 1854, a just and equitable system of property division. Thus, the state never had a system of fixed rules to abandon; judges have always had discretion in Washington.

    APPROACHES TO DISTRIBUTION OF PROPERTY IN COMMUNITY PROPERTY STATES: Three community property states are more consistent with the partnership model (as opposed to the familial or equitable distribution model) in generally mandating an equal division of the community estate, either by statute or by decision: California, Louisiana and New Mexico. Louisiana because its system of law was based on the Napoleonic code, or a civil system. New Mexico because of its historically Spanish traditions (a principle of the Spanish community is that property which is acquired by gainful activity during the marriage should be divided equally, in the absence of an agreement to the contrary). California because it changed its system in 1970, at the behest of a feminist movement that distrusted the judiciary to do right by women in dissolution cases. The California Legislature passed a law in 1970 which called for a rather automatic distribution of the community property (with provisions permitting the custodial spouse to live in the residence for as long as the child is a minor). Thus, the legislature robbed the judges of the discretion to divide the property based on fairness and the relative financial situations of the spouses. Emprical evidence has shown that, when given the power to exercise their discretion in the division of property upon divorce absent an agreement between the parties, judges tend to favor the less well-off spouse (in most cases, the woman). Therefore, this change in the law in California, passed with the vocal support of the feminist movement, has actually resulted in a lower transfer of wealth from men to women in California. Hardisty called California the most pro-man community property state in the nation in terms of family law, in part because of this change in the law 30 years ago.

    WHICH COMMUNITY PROPERTY STATE MOST FOLLOWS A PROPERTY THEORY OF DISTRIBUTION AND WHICH FOLLOWS IT THE LEAST?

    • MOST: Louisiana is the state that follows the property theory the most, that is, the community property state that most follows property principles in determining distribution. This for two reasons:
      1. Louisiana is one of the three community property states in the nation that has a partnership approach to the distribution of property. In these states, stautes mandate that all community property must be divided equally between the two spouses and that each spouse retains his or her separate property. All other 47 states, community property or common law, follow a system of just and equitable distribution.
      2. Of its two counterparts in this area (New Mexico, California), Louisiana is the only that joins non-community property states in the proposition that income on separate property is considered community property for the purposes of distribution (the others are Wisconsin, which is a marital property state; Idaho and Texas, common law states. Together, these three states spell "WILT", a handy device for remembering their significance, as in, the income from separated property WILTs into community property in these states).
    • LEAST: Of course, Washington. Courts in Washington essentially give no credence to the distinction between community property and separate property as all property is before the court for equitable distribution in the absence of the agreement of the parties.

    Glendon says this about the three states (Page 688, last sentence, only full paragraph): Traditional community property systems had the defect that a flat, equal division of acquests often requires the sale and division of the proceeds of the family's only substantial asset, the marital home, with resulting hardship to the children and the custodial spouse." Of course, this applies only to New Mexico and to Louisiana because of the provision in California law that permits the custodial spouse to postpone the sale of the marital home until after the children reach the age of majority.

    O'CONNELL: Error: Page 694, first sentence, third full paragraph: "The earliest equitable distribution statute was that of Kansas, passed in 1889." This of course is wrong, because Washington's system of equitable distribution was mandated by statute in the state's very first legislative session, in 1854. Incidentally, Washington instituted a system of no-fault divorce in the same session.

    SO WHY IS WASHINGTON SO LEFTY ON FAMILY LAW? Throughout the course, we have learned how Washington is to the left of any other state in the nation in terms of certain aspects of family law. We learned that nonmarital cohabitants can invoke community property law upon breakup (Connell v. Francisco, 127 Wash.2d 339 (1995)) (at the end of a meretriciuos relationship, what would have been before the court in dissolution to be considered for equitable distribution); that state guidelines for determining financial support obligations for noncustodial parents are among the most generous to custodial parents (Washington, and 32 other states, follow the "income shares model" of calculating child support. It is detailed at RCWA 26.19 App.); that it was the first state in the nation to adopt no-fault divorce and equitable distribution (in 1854). So why is Washington so damn progressive? Hardisty said this was due to a couple of factors, namely a tradition of pro-women legislation in the Nineteenth Century. In the 1850s, around the time the state legislature met for the first time, one of the most pressing concerns of those who lived here was the lack of women in the area. It was the frontier, a rough place, and men outnumbered women by about 9 to 1. Washington wanted to do everything it could to make certain that the women who did decide to come West would come to Washington instead of to California or Oregon. Legislative history suggests that legislators were specifically fearful of the threat of California's progressive legislation to the migration of women West in drafting their bills. Additionally, this was the era of the suffragette movement.


Tuesday, November 9
PAGES: 711-733
CASES: Walter Beam v. Bank of America; Marriage of Esther and Richard Mix; Robert L. Jensen v. Burlene P. Jensen;
Don J. Simplot v. Sharidon L. Simplot; Jacklynn N. Price v. Harold Price

    REVIEW FROM MONDAY: Two divisions of community property states:

    1. "WILT" states: Wisconsin, Idaho, Louisiana and Texas. In these states, income earned from the separate property of the individual spouses WILTs away, in that income from separate property is considered community property.
    2. "WANNC" states: Washington, Arizona, Nevada, New Mexico and California. In these states, the opposing spouse gets WANNCed because income received from separate property is considered separate property. This has little significance in Washington, however, because, in Washington, all property, separate or otherwise, is before the court for just and equitable distribution.

    ADVANTAGES, DRAWBACKS OF COMMUNITY PROPERTY: Community property is said to be more fair than common-law systems, but is also considerably more complicated that the common-law schemes.

    BEAM: Opened with a question about why the grounds for this divorced were cruelty rather than irreconcilable differences. The answer is that this divorce judgment was handed down in 1968; California adopted irrconcilable differences as the only ground for divorce in 1970.

    Why not recrimination?

    Recrimination is a term from the ecclesiastical courts. Under this system, there was no divorce, just annulments (called divorce a vinculo matrimonii, or "divorce from the chains of marriage"). The modern equivalent to legal separation was called divorce a mensa et thoro or "divorce from board and bed". Grounds for this were adultery and cruelty, which was the modern eqivalent to domestic violence. The theory went that you should not be forced to live with somebody who is beating you.

    Defenses to these two grounds were:

    1. RECRIMINATION: A charge made by an accused person against the accusser, especially a charge of adultery or cruelty made by a spouse charged with the same in a divorce suit. If both parties are guilty of adultery or cruelty (presumably the case in Beam), then a divorce cannot be granted.
    2. CONDUATION: If the innocent spouse forgives the offending spouse (as it, has sex with him or her), a divorce may not be granted
    3. COLLUSION: Where parties would get together in the divorce suit in order to manipulate a divorce (with manufactured testimony, for example), no divorce could be granted.
    4. CONIVANCE: Where the parties make up the grounds for divorce. For instance, there could be no divorce where a woman was having an affair with the chauffer, where the husband knew about her attraction to the chauffer and where he failed to fire him.

    RECRIMINATION was still a statutory defense to divorce in California in 1968, but it had been restricted by the California Supreme Court in the case of DeBurgh v. DeBurgh. In this case, the court read the mandatory language of the statute (if recrimination, then there must not be divorce) as giving the courts discretion over the question.

    HOLDING: The trial court did not err in concluding that there was no net community property accumulated during the marriage from the earnings of Mr. Beam's separate property where the property was an inheritance to the husband and where the return on the property was less than the annual legal interest rate and, therefore, not the result of the man's skill and effort.

    In this case, the Court said the lower court had the choice of two methods for determining whether and how much of the income from separate property should be considered community property.

    1. Pereira v. Pereira, 103 P. 488 (1909): "To allocate a fair return on the [husband's separate property] investment [as separate income] and to allocate any excess to the community property as arising from the husband's efforts." In applying the Pereira in this case, the trial court applied the legal interest rate of 7 percent simple interest as the "reasonable rate of return" on Mr. Beam's separate property. Had Beam earned this amount on his inheritence, it would have been worth about $4.2 million. Rather, it was worth, after 29 years, $1,850,507.33. Thus, the entire increase in the estate's value over the 29-year period would be attributable to the normal growth factor of the property itself, and, thus, using this formula, all income would be designated as separate property.

    2. Van Camp v. Van Camp, 199 P.2d 885 (1921): To determine the reasonable value of the husband's services, allocate that amount as community property, and treat the balance as separate property attributable to the normal earnings of the separate estate. While it was not unreasonable for the court to not use this formulation in determining how much of the income on Mr. Beam's separate property should be community, it is clear that she would lose under this formulation as well because of community expenditures, to be charged against the community income. Mrs. Beam contended that she should be entitled to one half of the amount he would have paid an investment professional. She contended that this would amount to $17,000 per year. This amount would be subject to the "family expense presumption," under which the court deducts the community's living expenses from community income to determine the balance of the community property. It was established that the family's living expenses were $24,000 per year. Therefore, there was never any positive balance of community property which could have been built up throughout the marriage.

    Hardisty noted that Mrs. Beam was awarded $1,500 per month in alimony under this judgment. To the extent that this alimony comes from Mr. Beam's separate property, alimony is a way of undermining the idea that Mrs. Beam is not entitled to separate property. Of course, in Washington, Mr. Beam's inheritance and all the rest of his separate property would be before the court for equitable distribution.

    INDEX: Divorce and the law (1999 World Almanac)

      30 Number of states in which adultery is still a grounds for divorce.
      28 Number of states in which cruelty and desertion are still grounds for divorce.
      20 Number of states in which irreconcilable differences is a ground for divorce.

Wednesday, November 10
PAGES: 733-746
CASES:
Marriage of Lydie D. and David E. Moore; Sylvester E. Harper v. Amaryllis M. Harper

    MIX: Mistake on page 713, last sentence in the introduction: "In the Mix case, p. 718, the wife overcame the presumption that acquisitions during marriage are community property by tracing the source of funds used to pay for them and by proving the amount of family expenses, for which the community estate was primarily liable." Mrs. Mix never proved the amount of family expenses, as the court noted on Page 720 (last sentence, first full paragraph): "We are satisfied from our review of the evidence that Esther failed to keep adequate records to show that family expenses had exhausted community funds at the time of the acquisition of any of the property here in dispute."

    The fact that the woman made a schedule in which she attempted to show that she could trace the funds from separate expenditures was not good enough, but testimony of her intention to keep her separate property separate from the community property to supplement the records provided sufficient evidence to overcome the community property presumption.

    JENSEN: Mistake on page 722. Income from the separate property is still separate and not community, but the community is eligible for reimbursement. In this case, the court held that when property that is owned by one spouse before the marriage and gains value during the marriage because of the efforts of one spouse, the property remains the separate property of the spouse who first owned it, but the community is entitled to reimbursement for the effort.

    Hardsity thought the court was being soft-hearted here, that it should have told the wife that her lawyer was incompetent at the lower level rather than giving the woman another bite at the apple on remand. A more hard-nosed approach (which Hardisty says he would have taken) would have been to tell the woman that she was out-of-luck.

    For the second time during the course, Hardisty made reference to the Charles Dickens novel Bleak House. From the Merriam Webster Encyclopedia of Literature: "Novel by Charles Dickens, published serially in 1852-53 and in book form in 1853. Considered by some critics to be the author's best work, Bleak House is the story of several generations of the Jarndyce family who wait in vain to inherit money from a disputed fortune in the settlement of the lawsuit of Jarndyce v. Jarndyce. It is pointedly critical of England's Court of Chancery, in which cases could drag on through decades of convoluted legal maneuvering."

    Bleak House can be purchased in most any used bookstore for about $3, or can be downloaded for free from an ftp server, courtesy of the The Guttenberg Project.


Thursday, November 11
PAGES: None
CASES: None

    No class, Veterans Day Holiday

Friday, November 12
PAGES: 746-766
CASES: Duane Ablamis v. Gay M. Roper; Elise Gunn v. United Airlines; Gerald E. Mansell v. Gayle M. Mansell

    SIMPLOT: The court ruled that the retained earnings of a corporation are not rents, profits or income for the purposes of the community property provisions of the Idaho Code, where the retention of earnings was not fraudulent or an attempt to deprive the community of income. Hardisty saied Sharidon made a silly argument, that she had no chance of winning on these grounds and that she should have selected better arguments. She ultimately won for remand on the issue of disposition of property (a ruling that would not effect Don Simplot's separat property, of course).

    Hardisty pointed out that the gist of the court's argument is that the retained earnings are not property acquired by the husband, for the purposes of the staute. Therefore, Hardisty said, the court did not even have to reach the question of whether the retained earnings were the income of the husband's separate property, they could have rested on the notion that the retained earnings were not actually property.

    PRICE: The terms "contributions or efforts" in the statute includes the indirect contributions of the non-titled spouse as a parent and a homemaker. Hardisty pointed out that the bar is rather high in New York, and used California as an example to illustrated the differences. She would have been better off in California, he said, because it follows the community interest theory rather than the reimbursement theory. In New York, the woman had to prove two things: 1)The value of the husband's separate property increased during the marriage due to his labor and contributions (not natural increase in the value of the property); and 2)that she contributed her husband's efforts in increasing the value of the separate property. Then, she is entitled only to reimbursement to the extent of her efforts. In California, by contrast, all she would have to prove is that the husband's separate property increased due to his efforts during the marriage. Then, she would be entitled to one-half of the amount of the increase in the separate property during the marriage.

    Hardsity said that empircal evidence has shown that homemakers get far less in New York, under equitable distribution, than do homemakers in California. Washington is also a community interest state.

    STEPS IN THE DISTRIBUTION OF PROPERTY UPON DISSOLUTION OF MARRIAGE:

    1. Accounting for the property of the parties (determing what is property).
    2. Determining whether federal laws preempt on any particular areas (like pensions, for instance).
    3. Characterization of the property as community or marital or separate (depending on the state).
    4. Determine the value of the property.
    5. Disposition of the property (who gets what).

    MOORE: The trial court did not err in not basing the community property interest on the full amount of payments made, which includes interest, taxes and insurance, rather than only on the amount by which the payments reduce the principal. However, the trial court did employ a disfavored formula in calculating the community property interest in the house by not crediting the separate property with the down payment and the full amount of the loan less the amount by which the community property payments reduced the principal balance of the loan.

    The trial court's calculation benefitted the party who appealed in this case, so the court did not upset the judgment (even though it was wrong).

    HARPER: Maryland adopts the source of funds theory, rejecting the transmutation theory (Illinois) and the inception of title theory. California follows the source of funds theory, Washington follows the inception of title theory.


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