The Oregon Court of Appeals published an opinion in Fields and Fields on March 24, 2010.  The entire opinion can be viewed here:  http://www.publications.ojd.state.or.us/A141040.htm

The case dealt with the treatment of wife’s separately held company.  Wife was given the company by her parents prior to the marriage.  She kept the company in her sole name throughout the marriage.  Husband provided a significant amount of work for the company and the parties used the company’s income during the marriage.  The trial court ruled that husband was not entitled to a award to equalize the value of the company to wife. 

The court of appeals held the the trial court was mistaken and, that while wife had rebutted the presumption of equal contribution with regard to her initial acquisition of the property that she had not done so with respect to the company’s appreciation during the marriage.  ORS 107.105(1)(f) requires that the division of marital property be “just and proper” under the circumstances.   Marital assets are subject to a rebuttable presumption of equal contribution and ownership, which applies to property acquired by a spouse by gift during the marriage.   The appreciation in value of a separately held asset is a marital asset that is also subject to the rebuttable presumption of equal contribution.  A spouse rebuts the presumption of equal contribution with respect to the appreciation of a separately held asset if he or she proves that the other spouse did not contribute either directly or indirectly to its appreciation.  Here, wife could not rebut the presumption.

The court of appeals awarded husband one half of the appreciation of the company during the marriage.

The Court of Appeals decided the case of Bolte and Bolte on February 17, 2010.  The case is an appeal from a divorce trial.  The Court of Appeals modified the spousal support award made by the trial court.

Husband and Wife were married for 22 years, and separated a few years prior to trial.  Wife gave up employment opportunities of her own to further Husband’s career.  The parties had a household income of $14,000 per month, consisting of Husband’s income of $10,700 and Wife’s income of $3,300. 

Husband argued that his income should be only $7,900 per month because the remainder was from a position that he termed temporary.  Husband also argued that Wife’s income should be presumed to be higher because she was underemployed.

Trial court awarded indefinite support in the amount of $1,500 per month. 

The Court of Appeals held that Wife was not underemployed as she was already working full time and is not, for spousal support purposes, required to work at the highest possible salary.  The amount of spousal support must be “just and equitable” under the totality of the circumstances.  Specifically, ORS 107.105(1)(d)(C) provides a nonexclusive list of factors that we consider in establishing a just and equitable support award for spousal maintenance support, which include (1) the duration of the marriage; (2) the standard of living established during the marriage; and (3) the parties’ age, income and earning capacities, training and employment skills, work experience, and financial needs and resources.  The Court of Appeals modified the support award up to $2,500 per month indefinitiely because “without a substantial award of spousal support, wife’s standard of living following the dissolution will be significantly diminished when compared to the parties’ predissolution lifestyle, which was based on a monthly household income of approximately $14,000.”

The opinion can be found here:  http://www.publications.ojd.state.or.us/A139055.htm

The Indian court system does not properly recognize divorces issued in the United States.  A divorced wife can flee on her own, or even worse with the parties’ children to India.  Once there, she can file dowry harassment charges against her “ex-husband.”  In addition, India is not yet ratified the Hague convention and will not act to send abducted children back to the United States. 

There has been a rise in the number of dowry harassment cases filed against non-residen Indians (NRIs).  India has been used as a haven for ex-wives who are disatisfied with the result of their United States divorce case.  Once in India they utilize dowry laws which are peculiar to the Indian legal system and do not have a US counterpart. 

Spouses who are NRIs or are divorcing NRIs should discuss their case with a competent attorney who understands these complex international law issues.

On December 23, 2009, the Oregon Court of Appeals filed its decision in Baker and Andrews, a dissolution of domestic partnership case.  The entire opinion can be found here:  http://www.publications.ojd.state.or.us/A135564.htm.

                Baker and Andrews were an opposite sex couple who lived together for many years.  Baker appealed the trial court’s order that no domestic partnership existed and from an order of the court awarding Andrews sanctions against both Baker and her attorney.  The court of appeals agreed with the trial court with respect to its ruling that no domestic partnership existed, but reversed the trial court with respect to its ruling on sanctions.

                They lived together for 24 years, and shared a home and bed and raised their own separate children to adulthood in the home during that time.  They maintained separate bank accounts. Baker did some work outside of the home and Andrews owned a business (that Baker did some work for without pay).  Baker also worked as a homemaker.   They had no agreement as to their financial relationship.  Andrews added Baker to the title on the house in 1994, but Baker then signed a quitclaim deed releasing her interest in the home in 2004.  She also filed for SSI disability, stating in her application that she did not expect anything from the home and that she lives financially separately from Andrews.

                The trial court did not find Baker to be credible, a finding upon which the court of appeals must rely. 

                Oregon does not recognize common law marriage.  Under the court’s decision in Beal and Beal and subsequent cases, however, Oregon has a body of case law that recognizes that where parties intend to create a domestic partnership that the court can then equitably divide their property and debts.  The court of appeals describes this as follows:  “In general, an equitable property division on dissolution of domestic partnership is appropriate where the parties’ intent to share assets and expenses is shown by evidence that they have jointly purchased, built, or maintained property, held joint accounts, and made substantial economic and noneconomic contributions to the household for mutual benefit.” There cannot be an award of spousal support, nor can there be a claim for attorney fees made in such a proceeding.

                Here the court of appeals found that there was insufficient evidence of financial commingling sufficient to support Baker’s claim of the existence of a domestic partnership.

                Even though a party has no entitlement to attorney fees in this form of proceeding, if the other party files a frivolous case then the offended party can seek sanctions under Oregon Rule of Civil Procedure 17.   The court of appeals did not reach the issue of whether the filing was in fact frivolous, because it decided that the trial court’s manner of assessing sanctions was legally improper.  The matter was remanded to the trial court to decide if sanctions were warranted under ORCP 17.

Time magazine ran an article on the use of social networking sites like Facebook in divorce cases. The article can be reviewed here.
When going through a divorce or custody case it is very important to be careful about what is posted on social networking sites, in Twitter posts or in emails and letters sent to the other party. All of these can be used against the poster/sender in court. Also, scrutinizing the other party’s posts and correspondence can be very helpful in a case.
Stephens Margolin P.C. prides itself on keeping up with technology and its role in family law matters. For more information, contact the firm.

The New York Times published an article regarding a top London divorce attorney named Raymondy Tooth. The article describes how Mr. Tooth makes a living representing the wives of wealthy British men.
The article describes a case in which Mr. Tooth represented Ms. Myerson, whose husband was worth around $44 million at the time of the divorce. Ms. Myerson elected to take less than half of the assets in case and some properties, while Mr. Myerson received $21.7 million worth of stock in his investment fund. Mr. Myerson was very disappointed when, some months later, the global economic downturn reduced his stock holdings by 90%. He filed a petition with the court to overturn the property distribution and make his ex-wife return the property that she received. The court declined to do so.
Under Oregon law, property distributions in a divorce cannot be modified post-judgment, as opposed to support awards and custody/parenting time determinations. It is crucial to have competent legal counsel’s advice in deciding on a strategy for division of assets. Mr. Tooth considered the volatility of the market, while Mr. Myerson just looked at the bottom line, to his misfortune.
If you have questions about the division of assets and property awards in an Oregon divorce, contact Stephens Margolin P.C. for a consultation.

I wrote a post a few weeks ago about the effect of the current enconomy on child support modification. The State of Oregon has taken note of the problem. Margaret Olney with the Oregon Attorney General’s Office sent out the following email with regard to the changes being made effective today, May 7th. Please contact Stephens Margolin P.C. to see how the changes may affect your child support situation.

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 a Portland Oregon divorce law firm, Stephens Margolin P.C. is dedicated to keeping up to date on Oregon Court of Appeals and Oregon Supreme Court opinions. As a service of The Oregon Divorce Blog, we will be providing updates as new opinions come out.

On April 15, 2009, the Court of Appeals ruled in the case of McLauchlan and McLauchlan.

Husband appealed from the trial court’s ruling in his divorce with regard to the division of property and the award of spousal support to his ex-wife.

As part of the division of assets, the court awarded the “Butte Falls” property to wife provided that she could come up with a plan to refinance the property in order to pay to husband his equalizing judgment. On appeal, husband argued that the trial court did not have the authority to incorporate wife’s refinance plan into the divorce judgment, and that the trial court should have ordered the property sold rather than awarding it to wife. At issue was husband’s claim that wife, and thus the trial court, undervalued the property at trial. The court of appeals held that husband did not property preserve the error at the trial court level because he did not argue that the court lacked authority to do what it did and further that husband had the opportunity to present evidence regarding the value of Butte Falls but did not.

With regard to spousal support, the trial court ordered that husband pay spousal support to wife and reduced the amount of support to a “lump sum present value.” Husband disagreed witht both the amount and the reduction to a present value. Despite the fact that wife agreed with husband that it was error for the trial court to provide for a lump sum present value for spousal support, the court of appeals held that the parties misunderstand the law and that the trial court acted properly.

ORS 107.105 provides that a divorce judgment may provide for spousal support both “in gross or in installments or both.” The trial court awarded wife $1,000 per month for a period of five years and also provided that as part of the refinance of Butte Falls, she can deduct $54,000 (which the court deemed as the present value of the spousal support award). The court of appeals held that it was proper for the trial court to provide for alternative awards, both of which are proper under the terms of the statute.

The entire opinion can be viewed here: http://www.publications.ojd.state.or.us/A134002.htm

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

Clients often feel very upset about having to provide a life insurance policy to secure their spousal or child support obligation. The most common complaint is with regard to the beneficiary designation for securing child support. Generally the other parent is designated as the trustee over the proceeds of life insurance for the benefit of the children. Clients feel upset that the other parent will receive a good sum of money at the time of their death.

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.

     Clients often ask me about what remedies they have against an abusive spouse. In a divorce action, the issue of abuse is often completely irrelevant, especially in a case where there is no dispute over the parties’ rights with regard to children. I always advise clients to obtain a restraining order if their spouse has abused them within the last 180 days. For many clients, abuse has happened, but outside of the statutory window necessary for obtaining a restraining order, and their is no issue regarding children. In these situations, I normally tell clients that they are out of luck. There is, however, one other option, a tort claim for spousal abuse.

     The Beaverton, Oregon law firm Case and Dusterhoff, LLP recently obtained a verdict for their client in a spousal abuse case in which they alleged Assault and Battery along with Intentional Infliction of Emotional Distress. The jury’s award was not very large, but the result was certainly a large moral and legal victory as such claims are rarely seen.