Divorce – Case Law Update – Child Support Modification

free-vector-scales-of-justice_099380_Scales_of_justiceIn Handley and Handley, 282 Or App 255 (2016), the Oregon Court of Appeals issued an opinion regarding modifying child support when the minor child voluntarily began living full-time with one parent.

Pursuant to the underlying divorce judgment (and subsequent supplements to the judgment), Mother had legal custody and 59 percent of the parenting time (leaving 41% for Father).  Because her income was higher than Father’s, Mother paid father child support of $186 per month.  In 2014, Mother and Father both filed motions to modify the parenting aspects of the underlying judgments.  The parties reached an agreement that there would be no set parenting plan and the child would “be entitled to determine if and when she wants to spend time with either parent,” and that parent would have sole legal and physical custody.  Id. at 257.  Since the child had been living with Father exclusively by her own wishes for several months at the point the agreement was reached, the agreement provided that, at that time, Father had sole legal and physical custody.  The only matter left for the court to determine was whether child support would be modified to reflect the fact that Father had sole custody at the time the agreement was made.

The trial court found that there had not been a “substantial change of circumstances” (see ORS 107.135(3)(a)) because there was no set parenting plan in place to determine how much time the child would spend with each parent.  Therefore, the trial court denied Father’s request to increase his child support award.

The Oregon Court of Appeals reversed the trial court’s denial of Father’s request to modify his child support upward.  The Court of Appeals noted that, in fact, the time the child was living with Father had more than doubled (from 41% to 100%), and that there was no indication that the child was going to move out:  “The possibility that she might [move out of Father’s home] at some unspecified point in the future was not a proper basis for declining to reconsider mother’s child support obligation in light of the fact that the child had been living with father on a full-time basis and was continuing to do so.”  Handley at 258.

The child support issue was reversed and remanded to the trial court to determine the proper amount of child support that would be awarded to Father.

Divorce – Case Law Update – Prenuptial Agreements

free-vector-scales-of-justice_099380_Scales_of_justiceOn September 21, 2016, the Oregon Court of Appeals issued an opinion regarding the enforceability of prenuptial agreements.  In Porter and Porter, 281 Or App 169 (2016), the trial court found that the prenuptial agreement was unenforceable and Husband appealed.  The Court of Appeals reviewed the relevant factors to determine whether a prenuptial agreement is enforceable, which are as follows:

1.  the proximity of the document’s presentation to the time of the wedding;

2.  any surprise in its presentation;

3.  the presence or absence of legal counsel;

4.  inequality of bargaining power;

5.  disclosure of assets;

6.  understanding of rights waived; and

7.  awareness of the intent of the document.

In the underlying case, the evidence established that before the parties discussed marriage, Husband, who had been married twice before, told Wife that he was having his attorney prepare a prenuptial agreement in the event that the parties decided to get married. Wife told Husband she had never heard of a prenuptial agreement and Husband explained that it is something people sign before they get married and he wanted to make sure Wife was not in the relationship for Husband’s money.

The parties did not discuss the prenup further until December 24, 2002.  At that time, the parties were running errands and Husband pulled up to a bank, explaining that they were going to sign the prenup.  Husband presented Wife with the document to sign and notarize.  That was the first time Wife saw the agreement or the list of Husband’s assets attached, and she did not understand much of the agreement.  She trusted Husband and believed, based on Husband’s explanation of prenuptial agreements, that the document was “rather insignificant.”  After the agreement was signed, Husband sent a copy to his attorney.  The parties got engaged that evening and were married four months later.

An appeal, Husband correctly noted that the party seeking to negate the prenuptial agreement bears the burden of proving it was not executed voluntarily or was unconscionable.  ORS 108.725.  Nevertheless, the Court of Appeals found that the agreement in this case was not executed voluntarily.  The Court explained that the following factors contributed to its decision:

1.  Wife was less sophisticated than Husband in matters of this nature.  She was born in Germany and, while she was fluent in English, it was not her first language.  Further, she lacked personal experience with divorces in the United States.

2.  The parties never discussed the specific terms of the agreement.

3.  Wife did not understand the agreement’s legal significance or practical effect.

4.  Wife did not have sufficient time at the signing to become educated as to the effect of the agreement.

Based on the above, the Court of Appeals affirmed the trial court’s ruling that the prenuptial agreement was unenforceable.

Family Law – Case Law Update – Restraining Orders

free-vector-scales-of-justice_099380_Scales_of_justiceOn October 5, 2016, the Oregon Court of Appeals issued an opinion regarding the findings necessary to uphold a temporary restraining order.  In  TK v. Stutzman, 281 Or App 388 (2016), the Court reviewed the validity of a temporary restraining order issued under the Family Abuse Prevention Act (FAPA).  To support such an order, a petitioner must establish that (1) respondent had abused petitioner within 180 days before the petition was filed, (2) there was an imminent danger of further abuse to petitioner, and (3) respondent presented a credible threat to the physical safety of petitioner.  ORS 107.718(1).

In the underlying case, Petitioner was Respondent’s 28-year-old niece.  The two were estranged and Respondent believed Petitioner had a drug problem.  The event that led to the restraining order took place after a church service attended by both parties and Petitioner’s fiancee.  Petitioner testified that after the service Respondent approached her and accused her of using drugs and being involved with pornography.  Petitioner began to walk away and Respondent grabbed her by the arm.  Petitioner pulled away and continued walking.  Respondent then stood in front of Petitioner’s car door in the parking lot and told Petitioner “If we weren’t at church, you’d be dead right now.”  Petitioner pushed Respondent out of the way and drove the car out of the parking lot while Respondent continued to yell at her.  Petitioner testified that she was “very fearful for [her] life.”  According to Petitioner, three months prior to this incident, Respondent had come onto Petitioner’s property and then left when Petitioner walked outside.

The Court of Appeals expressed some reservation regarding whether the incident after the church service constituted “abuse,” but focused its inquiry on whether (1) Petitioner was in imminent danger of further abuse and (2) Respondent represented a credible threat to Petitioner’s physical safety.  In holding that those two elements were not met, the Court noted that “[a] petitioner’s subjective fear is insufficient to support a FAPA restraining order.”  The Court further explained that this case involved “an isolated incident of aggressive, primarily verbal, conduct;” there was no evidence that Respondent made any effort to harm Petitioner during the incident; and there was no evidence that Respondent had ever harmed, or attempted to harm, Petitioner or anyone else.  The Court concluded that “although he church incident caused petitioner fear, in context, it was insufficient to show that respondent posed an imminent danger and credible threat to petitioner’s physical safety.”

The Court of Appeals reversed the trial court’s continuance of the temporary restraining order.

 

Divorce – Case Law Update – Child Support

free-vector-scales-of-justice_099380_Scales_of_justiceOn October 21, 2015, the Oregon Court of Appeals issued an opinion regarding how child support is calculated.  In Adams and Adams, 276 Or App 423 (2015), father was ordered to pay $805 per month in child support based on his monthly income at the time of trial of $4,885 as an instructor for the United States Army.

Subsequently, Father was discharged from his job and stopped paying child support, and remarried.  He moved to modify his child support obligation based on the fact that he had been discharged from his job and had been unable to find another job.  Unable to find work, Father borrowed $25,000 to start a CrossFit gym, but at the time of the hearing on the motion to modify child support, the gym was not generating income.  Father’s only income at that time was $400 per month for service in the National Guard.

At the hearing, Father also testified about his monthly personal and business expenses, which totaled $4,880.  Father testified that he had been able to meet those expenses by using his savings account, which was nearly empty.  At the time of the hearing, Father was being supported by his new wife, whose military disability benefits paid his expenses.

The trial court used Father’s expenses of $4,880 to set his new child support payments at $1,158.  Father appealed, arguing that the the trial court should have set his child support payments based on his actual or potential income, rather than his expenses.

The Court of Appeals agreed with Father.  Presumptive child support payments are calculated based on the requirements of the Oregon Administrative Rules (OAR 137-050-0700 to 137-050-0765) (Oregon provides a calculator to determine presumptive child support amounts under these rules here).  Under, OAR 137-050-0715, a parent’s income can include only the parent’s own actual or potential income (potential income may be used if it is greater than the actual income).  The Court of Appeals held that the trial court erred in relying on Father’s new wife’s income to determine Father’s income for the purposes of calculating the presumptive child support amount.  The case was reversed and remanded to the trial court for redetermination of Father’s child support obligation.

Divorce – Summary of Types of Spousal Support

BooksSpousal support is often a hotly-contested topic in divorce cases.  While the parties argue over the amount and duration of the support, it is easy for parties and attorneys alike to forget about the importance of identifying the type of support to be awarded.  Distinguishing between the types of support is necessary not just in advocating to a court or mediator, but in ensuring that the terms of the divorce will stand up to scrutiny if the case is appealed.

Oregon courts may award three types of spousal support, which are explained in ORS 107.105(1)(d)(A), (B) and (C):

  1. Transitional spousal support as needed for a party to attain education and training necessary to allow the party to prepare for reentry into the job market or for advancement therein.
  2. Compensatory spousal support when there has been a significant financial or other contribution by one party to the education, training, vocational skills, career or earning capacity of the other party and when an order for compensatory spousal support is otherwise just and equitable in all of the circumstances.
  3. Spousal maintenance as a contribution by one spouse to the support of the other for either a specified or an indefinite period.

Each type of spousal support has a different non-exclusive list of factors that must be considered in awarding that type of support.  It is crucial that the proper factors be considered and that any dissolution judgment includes findings addressing those factors.  As the Court of Appeals made clear in DeAngeles and DeAngeles, 273 Or App 88 (2015), it is reversible error to award support based on the wrong factors.

Transitional support is generally appropriate if the recipient’s income is expected to increase in the near future due to returning to work, increased income at work, or a new job or career.

Compensatory support is generally appropriate when the recipient has contributed to the other spouse’s career.  This is often awarded when one party helped to pay for the other party’s education.

Spousal maintenance or “maintenance support” is generally awarded after longer marriages.  It is often indefinite or for a longer duration than the other types of support.  Maintenance support is the only type that includes “the standard of living” of the parties during the marriage as one of its enumerated factors.

Divorce – Case Law Update – Spousal Support

free-vector-scales-of-justice_099380_Scales_of_justiceOn August 20, 2015, the Oregon Court of Appeals published a new opinion regarding spousal support in divorce cases.  In DeAngeles and DeAngeles, 273 Or App 88 (2015), Husband and Wife were married for 17 years.  The trial court awarded Husband transitional spousal support of $1,000 per month for two years.  The limited period of support was based on evidence that Wife’s job would only last two more years.

On appeal, Husband argued that spousal support should have been higher and for a longer duration.  The Court of Appeals remanded the case for reconsideration of the spousal support awarded because the trial court made no findings to support an award of transitional support.

There are two items of note in this opinion.  First, the trial court likely intended to award maintenance spousal support instead of transitional spousal support.  In its written opinion, the trial court specified that it was awarding maintenance support, but the Judgment that the court signed specified transitional spousal support.  This was likely simply an error on the part of the parties who created the Judgment, but it highlights the importance of consistency between the Judgment language and the court’s orders.  An explanation of the differences in the types of spousal support a court may award in Oregon can be found here.

Second, the Court of Appeals suggested that the trial court on remand review the decision to award support that terminates after two years.  The Court of Appeals expressed concern over the duration because it was based on a “speculative contingency.”  Specifically, that Wife would no longer have a job in two years.

Divorce – Case Law Update – Asset Disclosure

free-vector-scales-of-justice_099380_Scales_of_justiceOn July 30, 2015, the Oregon Supreme Court published an opinion about the disclosure of assets in a divorce.  In Pollock and Pollock, 357 Or 575 (2015), Wife filed a motion to compel the production of documents from Husband, and the trial court ordered that some documents should be produced but withheld ruling on other documents to see if the parties could reach a settlement.  The parties reached a mediated agreement before trial; however, Wife contested the validity of the settlement before it was approved by the trial court, arguing that Husband should produce additional records pursuant to the motion to compel.  The trial court did not order Husband to produce additional records and instead enforced the settlement agreement.

The Oregon Supreme Court reversed the trial court on the issue of whether additional documents should have been produced after the parties reached a mediated agreement.  The Supreme Court explained that the asset disclosure requirements of ORS 107.105(1)(f)(F) obligated the trial court to rule on Wife’s motion to compel prior to approving the settlement.  The statute creates a duty for the court, not the parties, to determine whether assets have been sufficiently disclosed.  That requirement is not waived by the parties’ actions in settling the case.

Divorce – Case Law Update – Property Division

free-vector-scales-of-justice_099380_Scales_of_justiceOn July 25, 2015, the Oregon Court of Appeals published an opinion relating to the division of marital property.  In Fine and Fine, 272 Or App 307 (2015), several pieces of real estate and one business were divided.  The Court of Appeals found error in two facets the trial court’s division of assets.

First, the trial court failed to account for roughly $140,000 in withdrawals Wife made from a joint account immediately before the parties separated and about two years before trial.  The trial court found that Wife “did not account for her disposition of these funds,” but noted that Wife had been maintaining the marital residence during the separation.  The mortgage, insurance, and taxes for the marital residence during the separation totaled about $49,000, but the remainder of the funds were unaccounted for.  Husband asked that he be reimbursed for half of the funds withdrawn, but the trial court denied the request.  The Court of Appeals sent the issue of the disposition of those funds back to the trial court, finding that there was no evidence to support the trial court’s findings that all of the funds were used to maintain the marital residence.

In it’s second finding of error, the Court of Appeals examined $165,000 that was paid from a joint account during the marriage toward debts of Wife’s business, which was awarded to Wife in the dissolution.  Husband argued that he should be reimbursed for half of joint funds used to pay the business debt.  The trial court denied the request, but the Court of Appeals disagreed, remanding to the trial court for reconsideration of the award of the business to Wife without any compensation to Husband.

Family Law – Marriage

US Supreme Court Legalizes Same-Sex Marriage

red-equal-signs-marriage-equalityjpg-0fababd8b362bf7cIn what can only be described as a landmark ruling, the Supreme Court of the United States ruled on June 26, 2015, that states cannot ban same-sex marriage.  The case came before the Supreme Court on appeals from lower courts’ rulings in Michigan, Tennessee, Kentucky and Ohio.  Justice Anthony Kennedy wrote the opinion for the 5-4 majority, finding that:

“No union is more profound than marriage, for it embodies the highest ideals of love, fidelity, devotion, sacrifice, and family. In forming a marital union, two people become something greater than once they were. As some of the petitioners in these cases demonstrate, marriage embodies a love that may endure even past death. It would misunderstand these men and women to say they disrespect the idea of marriage. Their plea is that they do respect it, respect it so deeply that they seek to find its fulfillment for themselves. Their hope is not to be condemned to live in loneliness, excluded from one of civilization’s oldest institutions. They ask for equal dignity in the eyes of the law. The Constitution grants them that right.”

Obergefell et al. v. Hodges (US Sup Ct, June 26, 2015)

http://www.supremecourt.gov/opinions/14pdf/14-556_3204.pdf

Divorce – Case Law Update – Life Insurance Insuring Support

free-vector-scales-of-justice_099380_Scales_of_justiceOn June 17, 2015, the Oregon Court of Appeals published two opinions addressing requirements that spouses paying child and/or spousal support maintain life insurance policies for the benefit of the payees to secure support.

In Moyer and Moyer, 271 Or App 853 (2015), Husband filed a motion to terminate or modify the spousal support he was previously ordered to pay, based on his retirement.  The court modified the support award to be stepped down each year and terminate after three years.  The life insurance policy requirements, however, were not modified.  The Court of Appeals reversed and remanded the trial court’s decision to modify Husband’s life insurance obligation, holding that the obligation “must be commensurate with the ordered spousal support.”

In Mitchell v. Mitchell, 271 Or App 800 (2015), the trial court did not provide an explanation for why it chose to require Husband to maintain a $750,000 life insurance policy while he was paying support and then a $250,000 policy for the rest of his life.  The Court of Appeals, which reversed the trial court’s ruling regarding support amounts as well, requested that the trial court on remand to articulate its decision regarding life insurance.