BAPCPA is still relatively a new law, so there is some uncertainty about how BAPCPA will apply in some situations. In addition, the process to protect your rights can be complex if your former spouse files for bankruptcy. If your former spouse owes you money and is filing for bankruptcy, it is important to consult with an experienced attorney. The lawyers are Stephens Margolin PC have substantial experience in cases involving support obligations and bankruptcy.

This case deals with a parent’s ability to modify child support through the Support Enforcement Division while the divorce judgment is being appealed.  Mother had appealed the trial court’s decision in the divorce case and, while her appeal was pending, Father requested a modification of child support.  There followed a number of different administrative and Circuit Court hearings related to Father’s request to modify child support, and Mother eventually appealed the final decision.  The Court of Appeals stated that the Support Enforcement Division did not have the authority to modify child support while the appeal was pending.

It is important to note that, under ORS 19.275, the trial court can modify child support while an appeal is pending based on a substantial change of circumstances.  This decision only limits administrative changes to child support.

The entire opinion can be found here.

In this case, the parties signed a stipulated general judgment which awarded child support to Mother.  The judgment included a provision preventing either party from modifying child support in the future based on changes in income or any other change of circumstances, such as a change in parenting time.  Four years later, Father attempted to modify his child support obligation based on a decrease in his income, and the trial court upheld the agreement not to modify.  Father argued that the provision violated public policy because it deprived the state of the right to set child support according to the support guidelines and deprived the court of its authority to modify child support.  The Court of Appeals found the agreement did not take away the court’s authority to modify child support, but rather was an agreement between the parties waiving their right to seek modification.  The Court found that such waiver provisions are enforceable, unless the circumstances of a particular case make enforcement of the agreement contrary to public policy.  The Court left the open the possibility that it would not enforce such an agreement if doing so would negatively impact the children in a particular case.

Parties to a divorce should generally avoid provisions which limit their ability to seek future modifications which would be allowed under Oregon law.

The entire opinion can be found here.

You can see the full opinion here.

Children of married couples have no legal right to money for college.

Children of divorced couples have more rights. A child  of divorced parents who qualifies as a “child attending school” under ORS 107.108 has the right to receive support between the ages of 18 and 21.  Child support is calculated based on a formula based on factors laid out in ORS 20.275, which includes the educational needs of a child.  While the court can deviate upwards on the amount of child support ordered to include college expenses, the court has no authority to order that a parent pay for college as an obligation separate from child support.

Many divorcing parents negotiate deals where one party, or both, pay for college beyond the statutory obligation, however, parents are not required to do so. If funding for college is an issue important to you in your case, make sure to talk through with your lawyer what the court can order, and what is achievable only by agreement.

Husband is in the military and receives BAH and BAS payments which are included in his monthly paychecks.  He argued that the court should not consider those benefits as income for child support purposes since they are non-taxable.  The court of appeals did not agree and held that pursuant to OAR 137-050-0340 which defines gross income as “income from any source including, but not limited to, salaries, wages, commissions, advances, bonuses, dividends, severance pay, pensions, interest, honoraria, trust income, annuities, return on capital, Social Security benefits, workers’ compensation benefits, unemployment insurance benefits, disability insurance benefits, gifts, prizes, including lottery winnings, and alimony or separate maintenance received,” that the BAH and BAS payments were gross income.  It did not matter that those payments were non-taxable.

Husband, as a member of the military, is entitled to a military pensiion after 20 years of service.  At the time of the divorce he had not completed 20 years of service, but testified that he would complete said service.  Under Oregon law, the marital portion of husband’s pension must be calculated as a fraction of the entire actual pension, rather than as a fraction of a hypothetical pension amount.  The trial court had awarded wife a potion of the pension based upon a hypothetical retirement date prior to his full srevice.  The “time” rule is typically used to calculate the marital portion of benefits under a defined benefit retirement plan.  Under that rule, the marital portion is determined by multiplying the total actual pension benefit by a fraction, the numerator of which is the number of years (or months) of service during the marriage and the denominator of which is the total years (or months) of employment.  Wife’s interest in the pension should be based on the total pension benefit as of the date of retirement, determined either by way of an actuarial present value or through a division of benefits as they are distributed.

The court used the date of the parties’ separation to determine the marital portion of the pension.  The court of appeals held that the proper date is the date of dissolution, not the date of separation.

The court of appeals also held that in view of the fact that wife is entitled to a share of the marital portion of husband’s retirement benefits, and because those benefits would terminate if husband were to predecease her, it is appropriate that wife’s interest be protected by the provision of survivor benefits in an amount sufficient to cover wife’s share of the marital portion of the pension, with the parties to share equally in the cost of the annuity. 

The trial court ruled that husband satisfied his pretrial child and spousal support obligation via payment of the parties’ credit card debt.  Under Oregon law, a court cannot forgive a past-due support obligation.  Wife was awarded temporary spousal and child support in order to provide her with assistance in meeting her monthly expenses during the pendency of the proceeding as sset forth in ORS 107.095.  The trial court should not have credited husband’s obligation by his payment of credit card debt.

This case shows that a trial court can make myriad errors in its decisions.  In this case, the divorce was finalized by the trial court years prior to the court of appeals rendering its decision.  The issues in this case were complex.  In complex cases, the parties are frequently unable to reach a settlement due to their lawyers not being sure of a proper result.  Obviously, the alternative of throwing the issue into the hands of a trial court was not helpful in this case.  It is important to make sure that your lawyer has a firm grasp of the law and is able to property understand its application to the facts of your case and to the trial court.

Here is the letter:

Greetings,

As you know, the Attorney General has initiated a special project to respond to current economic crisis. The goal of this project is to speed the entry of fair and enforceable orders. We are also hoping to use the project as an opportunity to try out some other changes in the guidelines and procedures.

There are two important changes that will become effective May 7, 2009. First, at the request of the Division of Child Support, the legislature has enacted and the Governor signed emergency legislation and rules authorizing the temporary modification of existing orders based upon employment related loss of income to either parent. HB 2275A. These temporary modifications are only available through the child support program, either through the Division of Child Support (DCS) or through District Attorneys offices. Private attorneys and the court cannot independently issue temporary modifications. DCS has established a specialized unit in Salem called the “Recession Response Team” (RRT) to handle these modifications, using streamlined procedures designed to encourage consent and expedite modifications. Parents can access this team through the DCS interactive telephone system, by dialing 1-800-850-0228 and listening to the instructions.

The second change is to the child support guidelines themselves. The most significant changes include a cap on child care costs, adjustments relating to medical support orders and the establishment of a presumption $100 minimum order.

More details regarding the changes follow. The proposed rules are currently posted on the DOJ/DCS website in draft form. http://www.dcs.state.or.us/oregon_admin_rules/child_support_rules/draft.htm. In addition, a training module will be available through the DOJ-DCS website.

Statutory Change:

HB 2275A was signed by the Governor on May 5 and makes a number of changes to ORS 416.400 through ORS 416.465. It authorizes the Attorney General to declare that we are in a period of significant unemployment (an unfortunately easy decision to make in this economy), during which time existing orders can be suspended and replaced with a temporary modification based upon actual income. These temporary modifications automatically expire six months from the date of entry in court, but may be renewed. HB 2275A also authorizes alternate forms of service designed to speed the modification process.

Regular Division Rule Changes:

OAR 137-055-2140 (Delegations to Administrative Law Judge): this change allows an administrative law judge (ALJ) to enter a final order by default on employment-related modifications. It also allows the ALJ to dismiss the temporary modification request if the requesting party fails to appear for the hearing.

OAR 137-055-2165 (Request to Reschedule): this change requires requests to reschedule a hearing to be filed within 60 days of the notice of hearing cancellation.

OAR 137-055-3420 (Periodic Review): this change clarifies that a temporary modification does not affect the time period for a periodic review and adjustment of the order that is suspended.

OAR 137-055-3430 (Change of Circumstance Review): this change amends the change of circumstance rule to:

• Provide a definition of an “temporary modification” pursuant to HB 2275
• Define “employment-related change of income”
• Allow for a verbal request for temporary modifications
• Allow for alternative service methods on temporary modifications

The online calculator will be modified and ready with the changes outlined above on May 1, 2009.

Guideline Rule Changes:

OAR 137-050-0320 (Definitions): this change provides that when a parent must self-enroll in medical coverage in order to enroll his/her child(ren), the providing party’s portion of the health care coverage premium may be deducted from modified gross income. The coverage must still be found to be appropriate before it can be ordered. The child’s portion of the cost is still handled as set out in OAR 137-050-0410.

OAR 137-050-0330 (Computation): this change clarifies that when the self-support reserve lowers the child support obligation, the reduction is applied first to the cash medical support amount and then to the cash child support amount.

OAR 137-050-0340 (Gross Income): this change moves the requirement that gross income must be attributed to the parent who is a recipient of TANF to the “Income Presumptions” rule.

OAR 137-050-0360 (Potential Income): this change renames the rule to “Income Presumptions” and provides that a rebuttable presumption of actual income is to be used for temporary modifications and potential income for all other modifications.

OAR 137-050-0420 (Child Care Costs): this change caps child care costs based on the age of the child and where the care is provided. The figures used for the cap are captured from the Department of Human Services administrative rules, averaged across the board.

OAR 137-050-0430 (Cash Medical Support): this change creates the priority of cash child support over cash medical support when the self-support reserve lowers the obligation amount. It also prohibits entry of an order for cash medical support if the obligor’s income is less than Oregon minimum wage.

OAR 137-050-0475 (Ability to Pay): this change provides that where the self support reserve is presumed to be the correct obligation amount, any reduction in the obligation amount applies first to the cash medical support amount, if any, and then to the cash child support amount.

OAR 137-050-0485 (Minimum Order): this new rule authorizes a rebuttable $100 per family minimum order, except in certain situations.

Looking to the Future

The Attorney General is extremely committed to making the Oregon Child Support Program effective and fair to all participants. DCS staff have worked extraordinarily hard to develop and implement this Recession Response project on a very short timeline. I am confident that many families will benefit from the program and that we will be able to learn from this project. Some aspects will work, others not, so please let us know your experience and thoughts.

If you have questions, you may contact me directly and I will attempt to answer you question or point you in the right direction.

Margaret Olney
Special Counsel
Office of the Attorney General
margaret.olney@doj.state.or.us

1162 Court Street, NE
Salem, OR 97301
503.378.6002
971.673.1880 (Portland)
503.367.4017 (fax)

As part of any life insurance provision in a judgment, a clause is always added stating that a “constructive trust” will be established over the life insurance proceeds. On April 15, 2009, the Oregon Court of Appeals ruled on this issue in the case of Tupper v. Roan v. Tupper.

Jerry Tupper and Heather Tupper divorced in 2004. As part of the divorce, Jerry was required to provide a life insurance policy in the amount of $100,000 to secure his child support obligation. In addition, the judgment stated that a constructive trust would be established over the proceeds of any life insurance policy if a party designates a different beneficiary on the policy.

Jerry started living with Danette Roan shortly after the divorce and designated her as the beneficiary on his life insurance policy in direct violation of the terms of the judgment. Jerry died in 2006 and the proceeds of his policy went to Danette. Danette received $600,000 and no money went to Heather to secure Jerry’s child support obligation.

Heather sued Danette claiming that she improperly kept $100,000 in violation of the terms of the judgment. Danette’s response was that she was not aware of Jerry’s obligation to maintain a life insurance policy for child support before he died. Danette further asserted that the court could not impose a constructive trust over the $100,000 because Heather could not prove that Jerry transferred property to Danette that rightfully belonged to Heather and that Danette either knew or should have know of that wrongful conduct.

The court of appeals ruled in Danette’s favor, holding that since Jerry created the life insurance policy after the divorce, Heather did not have an interest in it at the time of the divorce and it was therefore never her property.

For clients, this case creates a difficult situation. Unless a party has a life insurance policy in place at the time of the divorce, the other spouse will likely have a very difficult time obtaining the funds from that policy unless the other spouse follows the requirement to maintain the beneficiary designation required by the terms of the judgment.

If you have questions about life insurance provisions in divorce, custody, or other support situations, the lawyers at Stephens Margolin P.C. would be happy to answer your questions. The entire opinion can be viewed here: http://www.publications.ojd.state.or.us/A136095.htm.

On February 18, 2009, the Oregon Court of Appeals published an opinion in Talik and Talik. The case is an appeal from a divorce judgment. Husband objected to the trial court ruling on three issues: 1. That the court erred in calculating child support; 2. That the court erred in not awarding him compensatory spousal support; and 3. That the court erred in limiting his parenting time.

The parties were married for 16 years. During the marriage, Husband worked for a period of time while Wife attended medical school. The parties moved around in order to meet Wife’s needs. The parties had three children.

With regard to the limitations on Husband’s parenting time, the court of appeals agreed with the trial court. There was evidence at trial that husband hit and kicked two of the children. The trial court found that Husband’s behavior negatively affected the children. In addition, a custody evaluator made recommendations regarding parenting time that the court agreed with. Husband provided no compelling argument to the court of appeals to deviate from the court’s decision.

With regard to Husband’s argument that he should have been awarded compensatory child support, the court of appeals disagreed with Husband and agreed with the trial court. The court explained that compensatory spousal support is available where the party requesting the support shows that they made a “significant financial or other contribution” to the factors set forth in ORS 107.105(1)(d)(B)(i) to (vi). The significant contribution is not limited to enhancing the earning capacity of the other party because that is only one of the “areas to which a spouse may contribute in order to meet the threshold requirement for compensatory spousal support.” A contribution to the education, training, or career of the other party is sufficient. If a party meets the initial threshold, then the court must determine whether a compensatory spousal support award is “otherwise just and equitable in all of the circumstances.” Here, the court of appeals found that while Husband had met the threshold requirement of a significant contribution that such and award would not be just and equitable in the circumstances of this case.

With regard to Husband’s claim that the court erred in calculating child support, the court of appeals disagreed. The trial court had the opportunity to hear witnesses and obtain a clear understanding of the parties’ finances.

The entire opinion can be found at http://www.publications.ojd.state.or.us/A134376.htm

The case teaches us that trial court factual findings are key in any appellate case. While the court of appeals does review these cases de novo, it relies on the court’s factual findings.

The lawyers, including Daniel Margolin, who focuses part of his pratice on family law appeals, at Stephens Margolin P.C. can assist parties going through a divorce or appeal from a divorce judgment. As this case shows, it is crucial to have a competent attorney at the trial court level. If you have any questions about Oregon appellate law please contact Daniel Margolin or C. Sean Stephens at Stephens Margolin P.C.

Client’s ask me all the time about taping conversations and other forms of snooping in the opposing party’s life.  There are legal and illegal methods for doing so.  For instance, taping a phone call between yourself and your ex-wife without her consent is a misdemeanor in Oregon. 

The laws in Oregon regarding wiretapping are as follows:

Or. Rev. Stat. §§ 165.535, 165.540: It is illegal to obtain or divulge a telecommunication or radio communication, unless one is a party or has obtained consent from at least one party to the conversation. It is illegal to obtain or divulge an oral communication unless all parties to the communication are informed that their conversation is being obtained. Certain enumerated exceptions apply. Violations are punishable by a maximum sentence of $5000 or one year in jail.

Or. Rev. Stat. § 165.543: It is also a misdemeanor to intercept a wire or oral communication where one is not a party to the communication, and none of the parties to the communication have consented.

Under the statute, consent is not required for the taping of a non-electronic communication uttered by a person who does not have a reasonable expectation of privacy in that communication. See definition of “oral communication,” Or. Rev. Stat. § 133.721.

The state’s highest court ruled in1996 that interception, without consent of any of the parties, of the radio portion of a cordless telephone call through use of a police “scanner” is illegal under Oregon’s wiretapping laws. Oregon v. Carston, 913 P.2d 709 (Or. 1996).

Using a hidden camera to record another person “in a state of nudity” without consent when the person has a reasonable expectation of personal privacy is a misdemeanor. Or. Rev. Stat. § 163.700.

Before taking any action like this, it is best to consult an attorney to find out whether the evidence you gained would be admissible in court, whether the method of gaining that evidence is legal, and how such behavior could affect your case, either negatively or positively.