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New Case Law: Attorney Fees – Arbitration vs. Appeal March 22, 2008

Posted by margolinlegal in Arbitration, Attorney Fees, Dissolution, Legal Developments, Property Division.
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As a Portland Oregon divorce lawyer, it is important to keep 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 March 19, 2008, the Oregon Court of Appeals, in Ornelas and Ornelas, explained the difference between awarding attorney fees in arbitration appeals and appeals to the court of appeals.

In an Oregon divorce case where the parties have no children and no spousal support award is requested by either party the case is sent to mandatory arbitration. If either party disagrees with the result in arbitration, that party can appeal the arbitrator’s ruling for a trial de novo at the circuit court level. That means that a judge will look at the case without referring to the arbitrator’s ruling.

ORS 36.425(4)(c) provides:

“If a party requests a trial de novo under the provisions of this section, the action is subject to arbitration under ORS 36.405(1)(b), and the position of the party is not improved after judgment on the trial de novo, the party shall not be entitled to an award of attorney fees or costs and disbursements and shall be taxed the costs and disbursements incurred by the other parties after the filing of the decision and award of the arbitrator.”

This means that the trial court must make an award of attorney fees to a party who asks for a trial after arbitration and does not receive a better result.

In Ornelas, the husband was upset because his wife not only asked for trial de novo after she was unhappy with the arbitrator’s ruling, but also appealed the trial court’s ruling. She received a worse result on appeal than she did at arbitration or at the trial court level. Therefore, husband argued that wife must pay his attorney fees.

The court of appeals ruled that the attorney fee award language in ORS 36.425(4)(c) only applies to trial de novo and not to appeals. This is because the court of appeals has discretion to award or not award attorney fees on appeal pursuant to ORS 107.105. Meaning that even if you do worse on appeal that at arbitration, you can still receive an attorney fee award.

The court ended up not awarding attorney fees to either party since the final distribution of martial assets put husband and wife on roughly equal financial footing.

The entire opinion can be reviewed at http://www.publications.ojd.state.or.us/A128901A.htm.

New Case Law: how to ask for your attorney fees the right way. March 13, 2008

Posted by csstephens in Child Custody, Legal Developments.
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istock_000001836009xsmall.jpg As a Portland based firm representing divorce clients in Oregon, we are always interested in what the Oregon Court of Appeals says regarding attorney fees. We previously blogged about how in many types of family law cases you have the right to ask for fees. The Oregon Court of Appeals published a decision in Mcintyre and Freeman, ____ Or. App _____ (2008) dealing with an attorneys fee request after a custody and parenting time case. The case talks about your right to ask for fees, and your right to a hearing if you object to the other sides’ fee request.

In Mcintyre and Feeman, the parties had argued over custody, parenting time, and child support. Mother’s attorney reported that the case was very contentious. Father asked mother to pay a portion of her attorney fees, and mother objected. Mother also asked that father pay her fees. The court, without holding a hearing, ordered mother to pay a portion of father’s legal fees. We previously blogged about how in many types of family law cases you have the right to ask for fees in our post captioned “Divorce Myths: My ex will have to pay for my attorney fees.” The issue in the case was whether Mother objected properly, and whether the court wrongfully denied mother the right to a hearing. The court determined that mother had been wrongfully denied a hearing on the issue of fees. The court determined that mother had, within the appropriate time period, objected to father’s fees. (Oregon extends deadlines by three days when the original notice was served by U.S. mail.) The court then addressed whether mother’s failure to sign documentation showing the date of mailing made the objection defective. (Oregon law requires pleadings and other paper to be signed by the lawyer or client. While not discussed in the opinion, mother’ s attorney stated that the file room lost the properly filed certificate of service.) The court held that the notice was not defective just because mother’s lawyer didn’t sign the certificate of service. The court went on to say that Oregon law requires the other side to point out a lack of signature, and giving the other side an opportunity to fix it, prior to striking an unsigned pleading. One judge dissented, stating that there is no express obligation in the rules to bring a signing defect to the other side’s attention.

What does this mean to divorce and custody litigants in Oregon? Discuss with your lawyer the potential to ask for fees, and the potential to be required to pay fees. Ask for fees in your initial pleadings to preserve your rights to them. Behave appropriately in light of ORS 20.075 during your case (see our post captioned “Divorce Myths: My ex will have to pay for my attorney fees.”) Take reasonable positions. Follow the time line and procedures of ORCP 68 to the letter. And last but not least, sign your pleadings!

New Case Law: Two new Oregon spousal support cases. February 16, 2008

Posted by csstephens in Legal Developments, Spousal Support.
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istock_000001909034xsmall.jpg istock_000004621270xsmall.jpg As an Oregon divorce lawyer, I am always interested in what the appellate court says regarding spousal support.  The Oregon Court of Appeals published two spousal support decisions on February 6, 2008. Both decisions provide some guidance to husbands and wives dealing with spousal support claims at the trial court level.

In Potts and Potts, ____ Or. App ___ (2008), a self employed husband challenged a $7000 monthly award of indefinite spousal support to Wife. The court denied wife’s property appeal, and reduced husband’s spousal support obligation to $5000. Husband’s main argument was that the spousal support award gave wife a much higher net income than him after he paid support. Husband argued that he faced an increase in business expenses that should be deducted from his income, and that wife could earn substantial income from the property received, thus reducing her need for monthly support. The court didn’t buy husband’s “increased business expenses” argument, and found that wife’s potential for investment income should be reduced by the cost of the home she would purchase with her property award. The court still reduced husband’s support to $5000 per month for an indefinite term, holding that the goal of enabling the parties to live separately at a standard of living similar to the marriage could be met at this amount. The court calculated husband’s after tax income to be $139,671, and wife’s to be $88,744. The court considered these figures roughly equal in part because husband received the riskiest, most volatile assets, with wife’s property award being more stable.

In Van Riesen and Cross, ____ Or. App. ___ (2008), the court considered husband’s argument that he should have been awarded maintenance support. The court agreed, holding that husband was entitled to both temporary and indefinite support from wife.

The parties were married in 1979 and divorced in 2004. They have two children. Husband worked full time during the marriage, and was fired from Intel in 1996 after a bad review. He took time off to recover from the emotional blow, and after an 18 month employment hunt, did not seek new employment because his investments were doing well, and he anticipated a $2,000,000 payment from Intel from his employment grievance with Intel for lost compensation. His employment grievance was ultimately denied. Husband then developed diabetes, dyspepsia, and depression. Wife filed for divorce in 2003. At that time she earned about $120,000 per year.

At trial, husband and his experts argued he was unemployable based on his personality, age, and health conditions. The trial court awarded husband $25,000 in transitional support, and the “long half” of the property. (Really not that much more than half, only $31,565 more than wife in a $1,600,000 marital estate) Wife argued on appeal that husband had skills, and that he could work but had voluntarily retired. Husband argued that he could not work based on his age, health, and time out of the workforce. The appellate court found husband capable of work, but not at his previous salary (approximately $120,000 including bonuses.) The court also found that husband’ s unemployment was not voluntary as wife claimed. The court awarded husband maintenance support of $2,500 per month for 4 years until he could draw on his retirement, and that a lesser amount be paid after that time.

There is no magic formula for spousal support. The court considers each claim on a case by case basis, applying the statutory factors in ORS 107.105(1)(d) and existing case law. Both cases are interesting, and informative to parties with similar issues and claims.

Introducing Domestic Partnerships February 14, 2008

Posted by shelleycm in Domestic Partners, Legal Developments.
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Last May, we blogged about the passage of a bill granting same-sex Oregon couples many of the rights of heterosexual married couples.  After a few hiccups in federal court, Oregon counties are now open to register same-sex couples as domestic partners (occasionally not the way the legislature intended).

Other than giving a boost to Oregon’s diamond and wedding supply retailers, what was the legislature’s intent with this bill? What are the rights of married people that a registered same-sex couple now also possesses?  What is the difference between a same-sex domestic partnership and a heterosexual domestic partnership?  What happens when same-sex or heterosexual domestic partnerships break up?  If children are involved, how exactly would a court determine custody?

In the following posts, we’ll examine these questions and explain the differences between types of domestic partnerships.  We’ll look at the rights married people receive automatically at the time of marriage, and how an unmarried couple (of any configuration) can duplicate those rights using other legal means.

New Case Law: Property division, inherited property, and a clear trial court record. February 14, 2008

Posted by csstephens in Dissolution, Legal Developments, Property Division.

istock_000004820705xsmall.jpg On February 13, 2008, the Oregon Court of Appeals decided an interesting real property and equalizing judgment issue in Olson and Olson, ____ Or App _____ (2008). As a Portland, Oregon-based divorce attorney (Based in Oregon’s most populous county, Multnomah County), I am always interested in how the Oregon Court of Appeals adjusts trial court’s property divisions. The Olson decision addresses the issue of the division of inherited property, the division of appreciation on separately held property, presumptions regarding property division, the effect of credibility findings by the trial court, and the definition of what is a “just and proper” in dividing assets and liabilities.

The Olson decision dealt with husband’s appeal from a trial court ruling equally dividing husband’s inheritance (an 80 acre estate consisting of timber and a residence.) The trial court (in Lane county) treated the 80 acres as a marital asset and divided the inherited value and post-inheritance appreciation equally between the parties. Husband appealed in light of the Oregon Supreme Court’s ruling in Kunze and Kunze, 337 Or 122, 92 P3d 100 (2004), arguing the court should have excluded the inherited property from division, or awarded wife only a small fraction of the property’s value.

Wife and husband married in 1995, and divorced in 2006. In 1995, husband’s father (“grandfather”) lived on an 80 acre timber property. Father’s relationship with grandfather was strained, but father was closer to grandfather than other family members. The parties jointly considered buying the property from grandfather, but did not complete the purchase. They spent $3000 investigating the purchase. Husband and wife’s relationship with grandfather soured in 1997, and the parties shelved their plans to move to the property. Husband’s relationship with grandfather improved, but cwife’s did not.

Grandfather died in 2000, and husband inherited the entire estate. Husband transferred the 80 acres to himself in his sole name (the property was worth $330,000 at the time.) Wife was not put on title. Other proceeds of the estate were mixed with the parties’ finances. Husband sold equipment and deposited it into a joint account, and the parties spent $10,000 in joint funds on an attorney for the estate. Husband and wife continued to file joint income taxes. At the time of trial in 2006, husband’s inherited property was worth $465,000.

In Oregon, property division at trial is controlled by ORS 107.105(1)(f). Under the property division statute, property received by a party during the marriage (by inheritance, gift, wages, or otherwise) is considered a “marital asset”, which means the court assumes both contributed equally to earning the asset, and that the asset should be divided equally. This is a “rebuttable” presumption, meaning that either spouse can challenge the other spouse’s contribution to an asset (and thus argue to receive a larger share of the asset.) Herein lies the main dispute in Olson. The trial court held that wife, through her labor on the property, and the use of the joint account in maintaining the property, had established that the property was “marital” and subject to equal division. The trial court equally divided both the premarital value of the property, and the appreciation on the property during the marriage. The trial court did not make specific findings as to WHY it had exercised its’ discretion in awarding wife half of the inherited value and the appreciation on the property during the marriage.

In reducing wife’s property award, the Oregon Court of Appeals quoted the Oregon Supreme Court’s construction of ORS 107.105(1)(f):

In dividing the parties’ property, we follow ORS 107.105(1)(f), as construed in Kunze, 337 Or at 134-36. Under that case, we undertake a series of inquiries, described by the Supreme Court:

“If a party establishes that the property at issue is a marital asset * * *, then the court must apply the rebut table presumption of equal contribution under ORS 107.105(1)(f) as its next step in the analysis.* * * [T]he presumption directs the court that, unless proven otherwise, the court must find that both parties have contributed equally to the acquisition of marital assets. When the statutory presumption is not rebutted, this court has determined that, absent other considerations, the ‘just and proper’ division of the marital assets is an equal division between the parties. * * *

“Because the presumption of equal contribution under ORS 107.105(1)(f) is rebut table, either or both of the parties may seek to overcome it. If a party seeks to overcome that presumption, then that party has the burden of proving by a preponderance of the evidence that the other spouse’s efforts during the marriage did not contribute equally to the acquisition of the disputed marital asset. In assessing whether a party has satisfied that burden, ORS 107.105(1)(f) requires the court to consider both economic and non-economic espousal contributions, including the contributions of a spouse as a homemaker. ORS 107.105(1)(f) (court shall consider contribution of spouse as homemaker). If a party ultimately rebuts the presumption that the other spouse contributed equally to a disputed marital asset, then the court decides how to distribute that marital asset without regard to any presumption and, instead, considers only what is ‘just and proper in all the circumstances,’ including the proven contributions of the parties to the asset. When a party has proved that a marital asset was acquired free of any contributions from the other spouse, however, this court has determined that, absent other considerations, it is ‘just and proper’ to award that marital asset separately to the party who has overcome the statutory presumption.

“After the court makes its preliminary determination of the appropriate division of the marital assets by applying the statutory presumption, ORS 107.105(1)(f) next requires that the court consider what division of all the marital property–that is, both the marital assets and any other property that the parties had brought into the marriage–is ‘just and proper in all the circumstances.’ By contrast to the focus upon the parties’ respective contributions under the statutory presumption, the court’s final inquiry as to the ‘just and proper’ division concerns the equity of the property division in view of all the circumstances of the parties. * * * The trial court’s ultimate determination as to what property division is ‘just and proper in all the circumstances’ is a matter of discretion.”

The Oslon court held that for Wife to benefit from the premarital value of the property, she must show that her contribution to the property influenced the inheritance, and that grandfather intended for her to receive the estate. Wife did not show that her work on the property influenced the inheritance, or that she was the intended recipient of the estate. The court thus concluded that she did not influence the inheritance and also did not contribute equally to the acquisition of the property.

The Oslon court next considered whether Wife was entitled to a portion of the appreciation on the property during the marriage. The Olson court held that it must consider both economic and non-economic contributions in considering whether the presumption of equal contribution has been rebutted. Wife, without compensation, had primarily raised the partes’ children. She contributed her earned income to the family. She made substantial contributions of labor to grandfather’s property. The Olson court held that husband had not rebutted wife’s contribution to the appreciation on the 80 acres.

The court went on to award wife 25% of the pre-inheritance value of the property because it was “just and proper in all the circumstances.” In awarding wife a portion of the pre-inheritance value of the property, the court primarily considered that the property had been treated as “commingled” by the parties. While held in husband’s name alone, the parties had intermingled the property with their personal affairs, and jointly labored on the property. Wife has separately researched whether they were eligible for a Ballot Measure 37 claim. In considering what was “just and proper” the court found that some fraction of the inherited value, less than half, should be awarded to wife. The Court of Appeals awarded wife 25% of the inherited value, and 50% of the appreciation between inheritance and divorce. The Court of Appeals then reduced wife’s equalizing judgment.

The Court of Appeals went out of its way to explain that the trial court’s decision had been modified because the rationale for the decision was not clear in the court’s record. Normally, the Appellate court respects the lower court’s rulings as to husband and wife’s credibility, both express and implied. If the trial court record does not reflect why it made a credibility decision, it is subject to adjustment at the appellate level.

What lesson does Olson offer for a husband or wife facing a divorce trial in Oregon? First, present the court in a trial memorandum with the proper property division analysis under ORS 107.105(1)(f) and the Kunze case. Second, make sure the court’s ruling is clear in the final judgment (see our earlier post on well drafted judgments.) Third, make sure the court’s record and the divorce judgment includes findings as to WHY the court is making the specific property division. Make sure your lawyer asks the court to make specific findings of fact! If the trial court exercises discretion in dividing property, but does not explain why, you are leaving your decision open to reconsideration by a higher court.

New Case Law: Circumcision as the basis for custody modification? January 28, 2008

Posted by csstephens in Child Custody, Legal Developments, Modification.
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1440008_06caf3e411.jpg On January 25, 2008, the Supreme Court of Oregon issued a fascinating opinion in Boldt and Boldt, ___Or ____(2008). The Supreme Court in Boldt addressed a custodial parent’s authority to make religious and medical decisions for a child. The court also addressed whether a child’s objection to an elective medical procedure (circumcision) constituted a “change of circumstances” that would allow the court to modify custody if in the child’s best interests.

Mother and farther divorced in 1999. Mother was awarded custody of M, then 4 years old. The parties continued the fight over custody, and father was awarded custody of M when he was 9. In this proceeding, Mother filed for a change custody on the grounds that father intents to have M circumcised as part of M’s conversion to the Jewish faith. In the alternative, mother sought an injunction against father circumcising M as a condition of father retaining custody. The trial court denied mother’s motion to modify custody, but prevented father from circumcising M pending mother’s appeal. The Court of Appeals affirmed the trial court ruling without opinion. The Supreme Court heard mother’s petition for review, reversed both lower court rulings, and remanded the matter to the trial court for additional testimony regarding M’s preference.

Mother is a member of the Russian Orthodox Church, and M was raised in that faith. Father took interest in Judaism in 1999 (about the time of the divorce), and began teaching his children about the faith. Father converted to Judaism in 2004, and told mother that M may convert, and would have to be circumcised as part of the conversion.

On June 1, 2004, mother filed a motion for a temporary restraining order to prevent M from being circumcised, alleging that M objected to the procedure. Father countered that Oregon lacked jurisdiction to hear mother’s motion because M had lived in Washington state almost two years. He additionally argued that as the custodial parent, he had the authority to make the decision to have M circumcised. The court restrained father from circumcising M pending a hearing on jurisdiction and custody.

On June 4, 2004, mother filed for temporary custody under ORS 107.139 (alleging M was in immediate danger), or an alternate order barring M’s circumcision. Mother also filed a motion to change custody under ORS 107.135. Mother’s basis for both motions was an affidavit alleging that father was circumcising M against M’s wishes. Father again raised a jurisdictional challenge, and filed affidavits from family members asserting M consented to the circumcision, and from M’s doctor stating there were medical benefits to the procedure. At hearing, the circuit court found (1) it had jurisdiction to hear the matter, (2) that the decision for a child to have elective surgery is reserved to the custodial parent, (3) that in any event, mother had not alleged sufficient grounds for an emergency change of custody, and (4) issued an order preventing the parties from circumcising M until mother’s appeal was heard.

The Court of Appeals affirmed without opinion. The Supreme Court of Oregon allowed review. The court explained that Oregon requires a two-step inquiry to determine whether a court should modify custody. First, a parent seeking a custody change must show that (1) after the original judgment or the last order affecting custody, circumstances relevant to the capacity of either the moving party or the legal custodian to take care of the child properly have changed, and (2) considering the asserted change of circumstances in the context of all relevant evidence, it would it would be in the child’s best interests to change custody from the legal custodian to the moving party. Ortiz and Ortiz, 310 Or 644 at 649 (1990). The question of a change of circumstances is a factual one, and can be shown by a change that has injuriously affected the child, or a change in the other parent’s ability or willingness to care for the child in the best possible manner. If the moving party cannot establish a change in circumstances, the court does not consider the second step of the analysis (the “best interests” test.)

The Supreme Court agreed with the trial court that the custodial parent has the authority to make elective medical decisions for his or her child. Father asserts that mother’s rights regarding medical care are limited by ORS 107.154, and that his medical decision on behalf of M cannot be the basis for a change of custody.

Outside medical and religious groups took interest in the case, and Mother was supported by amicus curiae briefs (briefs filed by a “friend of the court,” someone not a party to a case, who volunteers to offer information to assist the court in deciding a matter before it) from Doctors Opposing Circumcision (DOC). Father was supported by amicus curiae briefs from the American Jewish Congress, American Jewish Committee, Anti-Defamation League, and Union of Orthodox Jewish Congregations of America. Father and his supporters argued father has a constitutionally protected First Amendment right to circumcise his son, as it is a fundamental and sacred part of the Jewish religions tradition.

The Supreme Court declined to base its decision on the medical risks or benefits of circumcision. The Supreme Court held that circumcision is a decision is commonly and historically made by parents, and that the decision to circumcise a male child falls within a custodial parent’s authority, despite medical or religions objections by the non-custodial parent. Had mother only asserted an objection to circumcision as the basis for her motions, her case would have been dismissed. However, mother asserted that M objects to the circumcision. M is now 12. The Supreme Court remanded the case to the trial court to take testimony regarding M’s preference, because father’s circumcising M against his will could affect the relationship between M and father, and thus could have a pronounced effect on father’s capability to properly care for M. If M consents to the procedure, mother’s motion to change custody should be denied. If mother is correct that M objects, the trial court could consider changing custody, the trial court must determine if M’s opposition will affect father’s ability to properly care for M. If the answer is yes, the court can address modification of the existing custody arrangement, or whether conditions should be imposed on father’s custody of M.

Clients ask us regularly what is the scope of their custodial authority. Can the non-custodial parent make medical decisions for the child? (Maybe, per the limits of ORS 107.154). What if the non-custodial parent wants to pierce the child’s ears? What decisions regarding the child might make custody at issue? Boldt tells us that if you are the custodial parent, you can make medical decisions without input from the non-custodial parent. However, if the medical procedure is elective, and the child objects, your decision may constitute a “change of circumstances” that would allow a trial court to consider changing custody.

Collaborative Divorce January 24, 2008

Posted by margolinlegal in Dissolution, Domestic Partners, Legal Developments, Property Division, settlement, Spousal Support.

Having a trial is a way, but not the only way to resolve your case. There are many tools available for resolving your case other than a trial. Good family law lawyers are problem solvers, and the good ones recommend that their clients try to resolve their disputes outside the courtroom. Many jurisdictions have mandatory mediation (without lawyers) for parenting time and custody issues. Many good lawyers recommend their clients use private (for a fee) attorney guided mediation for property and custody and parenting time issues. Many participate in judicial settlement conferences where a judge attempts to guide the parties towards a cooperative resolution. If successful, the benefit of these tools to the client is usually lower cost, less conflict, and an agreement they chose, rather than having a judge tell them what the result is.

Some specially trained lawyers are using a new process called “Collaborative Divorce” designed to keep clients out of the courthouse from the beginning. Collaborative Divorce is a non-litigious party based settlement process in which a husband and wife or domestic partners work together to dissolve their relationship. The process can result in less cost, stress and judicial involvement than a litigated divorce or domestic partnership dissolution. The main idea is for the parties to work together to end their relationship in a manner which allows for each party to be self-sustaining financially and that serves the best interest of their child.

In a Collaborative Divorce case, the parties use a team of professionals to work on specific areas of their case. For example, if a child is involved, then the parties would have a child specialist on their team. In all cases, a financial specialist trained specifically in divorce finance and a mental health practitioner will be used. One benefit of the collaborative divorce process is that it can produce much more creative methods of property division and spousal/child support than a judge in a litigated case would order.

At the beginning of the case, the parties sign a collaborative practice agreement or participation agreement, which outlines the essential principles of the collaborative process. The agreement limits the parties’ attorney-client confidentiality and sets forth the rule that if the collaborative process is unsuccessful, then all of the professionals involved in the case, including both parties’ lawyers, will no longer work on the case. In addition, any materials or information produced in the process will not be admissible in court.

This process is very popular in Canada, Australia, and in some states in the US. It has not taken off yet in Oregon at a substantial level. There are, however, a number of collaboratively trained lawyers and team professionals in the Portland area. This is a growing field, and something to seriously consider if both you and your spouse wish to avoid the expense, stress, and frustration of traditional, adversarial litigation. Our office maintains a list of family law lawyers trained in the collaborative process.

New Case Law: Bankruptcy and divorce don’t mix well. December 8, 2007

Posted by csstephens in Dissolution, Legal Developments, Property Division.
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bankruptcy_714eace06a_m1.jpgOn December 5, 2007, the Oregon Court of Appeals in Cam and Cam, _____ Or App _____ (2007) upheld a trial court’s ruling setting aside a divorce judgment, but said the court got the result right but the reasons wrong. The case explores the tension between bankruptcy and divorce law.

Mr. Cam and Ms. Cam were trying to settle their divorce. Mr. Cam thought there was a complete deal, but Ms. Cam did not. Mr. Cam’s lawyer drafted and submitted a judgment, which the court then signed. The judgment awarded Ms. Cam real estate and a money award ( a judgment for money.) Less than a month prior to filing the judgment, Mr. Cam filed for bankruptcy, but did not submit all the necessary paperwork to the bankruptcy court, and his petition was dismissed. Unknown to the divorce court (and probably Mr. Cam’s divorce lawyer), the bankruptcy case was active when the judgment was entered.

Ms. Cam then moved to set aside the judgment, and the court granted her motion on the basis that there was no a complete agreement, and that Mr. Cam had concealed assets.

The Oregon Court of Appeals upheld the trial court’s ruling, but said that the trial court was “right for the wrong reason.” When someone files for bankruptcy, an “automatic stay,” or prohibition on all creditor activity goes into effect. The court upheld the trial court ruling because the entry of the divorce judgment dealing with property violated the “automatic stay,” not because Mr. Cam may have hidden assets or the settlement was not complete. The trial court had the right result, but for the wrong legal reason. The court further ruled that the trial court did not err in setting aside the non-void (or non-stayed) portions of the judgment because of the court’s broad authority under ORS 107.105.

The moral of the story? If you are filing for bankruptcy, TELL YOUR DIVORCE LAWYER! The federal filing trumps most state court legal actions, and you may make your expensive, hard won judgment moot.

New Case Law: Restraining orders, easy to get, but harder to keep? November 30, 2007

Posted by csstephens in Domestic Violence, Legal Developments.

Oregon’s “Family Abuse Prevention Act” protects victims of domestic violence and allows victims of recent abuse to obtain protection from an abuser. ORS 107.700 et seq. While this is a necessary and valuable statute, it is also frequently misused as a custody tool, as obtaining a Family Abuse Prevention Act Order (FAPA order, or restraining order) against someone seriously impacts an alleged abuser’s claim for sole custody of children. Restraining orders are easy to obtain, as the initial application is done without notice to the opposing party. At the hearing to determine if a restraining order will continue, my experience has been that many circuit courts, out of an abundance of caution, tend to uphold restraining orders.

The Oregon Court of Appeals is a harder place to win a restraining order case. On November 28, 2007 the Oregon Court of Appeals reversed a trial court’s upholding of a restraining order in Baker v. Baker, ____ Or App ____ (2007). In the Baker case, the parties obtained mutual restraining orders against each other. Each party testified to a different version of events on the day of the incident that resulted in dueling restraining orders. The facts were ugly, and involved a pellet gun, a dog, and being dragged by the hair. Unfortunately for the petitioner, the testimony did not involve being threatened, or a fear of that the abuse would re-occur. The trial court upheld both restraining orders. The order upholding the dueling restraining orders issued by the court after hearing correctly identified the statutory test. To obtain a FAPA restraining order, the petitioner must show that he or she:

“has been the victim of abuse committed by the respondent within 180 days preceding the filing of the petition, that there is an imminent danger of further abuse to the petitioner and that the respondent represents a credible threat to the physical safety of the petitioner * * *[.]”

“Abuse” is defined in ORS 107.705(1):

“(a) Attempting to cause or intentionally, knowingly or recklessly causing bodily injury.

“(b) Intentionally, knowingly or recklessly placing another in fear of imminent bodily injury.

“(c) Causing another to engage in involuntary sexual relations by force or threat of force.”

ORS 107.718(1)

The trial court erroneously upheld the restraining order without meeting all of the above elements. There was no testimony that the respondent had threatened petitioner. There was additionally no evidence that the petitioner feared a repeat of the incident, as required by ORS 107.718(1). The appellate court, finding error, reversed and vacated Petitioner’s restraining order.

The moral of the story is when faced with keeping or defending a restraining order, you need a lawyer that knows the appropriate statutory test. With the same facts, a different (better) series of questions by Petitioner’s lawyer could have potentially made the restraining order bulletproof in the eyes of the Oregon Court of Appeals. Also, quick analysis by defense counsel could have resulted (correctly, based on the testimony) in the restraining order being denied at the trial court level.

New Case Law: Custody and Adolescent Angst October 24, 2007

Posted by shelleycm in Child Custody, Legal Developments, Modification.
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On October 17, 2007, the Oregon Court of Appeals decided an interesting child custody modification issue in Connelly and Connelly, ____ Or App ____ (2007). When a custodial parent faces adolescent behavior problems, can he or she lose custody of the children in favor of the non-custodial parent?

In initial child custody determinations and subsequent modifications, a court will look at the “best interest of the child” standard. Often a professional child custody evaluator will be hired to assess the situation and to make recommendations to the court.

In the Connelly case, Mother and Father married in 1989, had two children, S and T, and then divorced in 1995. Mother had been the primary caregiver for the children, and she received custody of S and T. Father had typical parenting time: weekends, holidays, summer vacations.

Ten years after the divorce, Father went back to the court to ask for custody of both children, arguing that because Mother left the children unsupervised, they had become “violent and disruptive” and were doing poorly in school.

The court ordered a custody evaluation. After her interviews with the family, the evaluator determined custody should remain with Mother, although both parents were inappropriate with each other as regarded the children. Both children preferred to live with Mother, and if they moved to Father’s, they would have to change schools and friends.

However, the court transferred custody to Father, finding that there had been a substantial change in circumstances and that a change would be in the children’s best interests. The court told father that he hadn’t “had a chance yet, and something dramatically different has to happen here.”

Mother appealed, arguing that any substantial change in circumstances must relate to “the capability of one or both parents to care for the child.” State ex rel Johnson v. Bail, 325 Or 392, 398, 938 P2d 209 (1997).

The Court of Appeals agreed, saying that the record did not indicate that Mother’s “lifestyle or circumstances” had significantly changed. The Court rejected the contention that because Mother did not communicate well with Father, that this was a substantial change sufficient to modify custody, because both Father and Mother had communications issues, with the bulk of the problems tracing back to Father. (However, in the past, the Court has found that poor communication by the custodial parent may be sufficient.)

The Court also wrote that although the children had been experiencing social and psychological problems while living with Mother, it is “not the child’s conduct – but instead the custodial parent’s effort – that determines whether the parent” has inadequately cared for the child.

New Case Law: A promise is a promise October 3, 2007

Posted by shelleycm in Dissolution, Legal Developments, Property Division.
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Last month, the Oregon Court of Appeals ruled an agreement to settle a case was binding under a very unusual set of circumstances.

John and Diane Baldwin divorced in 1993. As part of the divorce, the court divided John’s PERS account. The next year, John married Karen. In 2005, John died, and Karen became his estate’s personal representative.

Diane and Karen disagreed about how to handle the marital portion of John’s PERS benefits. Karen asked the court that dissolved John and Diane’s marriage to clarify its 1993 order. When the court declined to clarify, Diane was left with 100% of John’s marital portion of his PERS benefits.

Karen filed a notice of appeal from the trial court’s order. After a settlement conference, Diane and Karen’s attorneys worked via email for months towards a resolution of the case. Finally, Karen hired new counsel and decided to go ahead with the appeal.

Diane moved the court to dismiss Karen’s appeal, because Diane said the women had reached a settlement agreement that should be enforced. Karen disagreed.

The court sided with Diane. It wrote that a settlement agreement is a contract and is governed by contract law. Baldwin and Baldwin, ____ Or App ____ (A130180). The issue of whether or not a contract exists is an issue for the court to decide. Id. The court wrote:

As often stated, Oregon subscribes to an objective theory of contracts, which means that whether the parties entered into a contract does not depend on the parties having the same subjective understanding of the agreement. Rather, it depends on whether the parties agreed to the same express terms of the contract. Newton/Boldt v. Newton, 192 Or App 386, 392, 86 P3d 49, rev den, 337 Or 84 (2004).

In this case, the court concluded the parties had agreed to the same express terms, and that the parties had haggled over some of the details was immaterial to the actual agreement. The email exchanged between Diane and Karen’s attorneys is what made the contract. Baldwin, supra. The court wrote that a different result would have been reached if Diane and Karen had disagreed about the primary issues at stake. However, because the material issues had been agreed upon, the women had formed a settlement contract. Id.

The moral of the story? This case shows just how important it is for a client to know what his or her attorney is doing on his or her behalf. It also demonstrates for attorneys that even an informal discussion via email can give rise to a binding settlement agreement for their clients.

New Case Law: Satisfying the original purpose behind support, Part II June 27, 2007

Posted by shelleycm in Dissolution, Legal Developments, Spousal Support.
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In a case decided the same day as Cheever, discussed below, the Court of Appeals determined that a support order should not be terminated — even after the remarriage of an ex-spouse — where the original purpose of the support award remains unfulfilled.

In Lenhart and Lenhart, ____ Or App ____ (2007), a couple split after a 30-year marriage, during which the husband was employed (making $11,000 per month) and the wife remained at home.  As part of the dissolution, the husband was ordered to pay transitional, compensatory, and maintenance spousal support.

The wife in this case eventually remarried (wisely to an attorney) and moved to Missouri.  She was unsuccessful in finding employment, even after completing a bachelor program in English.

The husband moved to terminate the maintenance spousal support award (and the insurance policy he was required to maintain while he was obligated to pay support), based on substantial change of circumstances due to her remarriage.

The trial court disagreed, finding there was no substantial change of circumstances in the wife’s remarriage (even to an attorney) and her potential earning capacity.

The Court of Appeals agreed with the trial court.  The original finding in favor of a support order was that the wife “require[d] spousal support in order to have a standard of living that is not disproportionate to the one which she enjoyed during the marriage.” Here, given that she continued to be unemployed, this factor didn’t change her circumstances, even though she now had a bachelor degree in English.  The husband also argued that because of her remarriage, wife’s new husband’s income should be imputed to her and this was a substantial change of circumstances.  The Court of Appeals disagreed with husband here, as well, finding that even if half of her new husband’s income was imputed to her, it was not enough to merit a finding of a substantial change to modify or terminate the spousal support order.  The original purpose of the order — to support wife in a lifestyle roughly commensurate to that of the marriage — would not be fulfilled if the support order terminated.

As in Cheever (and discussed here earlier in Deboer), this case demonstrates just how important it is for a judgment to explicitly lay out the reasons behind a support order: if, for example, the judgment had been clear about support terminating at remarriage, or when other conditions had been met (such as the completion of her degree), the husband might have been successful in getting the spousal support order terminated.

New Case Law: Satisfying the original purpose behind support, Part I June 27, 2007

Posted by shelleycm in Dissolution, Legal Developments, Spousal Support.
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Very often people expect that there is one hard-and-fast formula that courts apply to awarding spousal support in every case. While there are statutes that outline the factors that a court should look at when determining if spousal support is necessary, these determinations are always very fact-specific. It’s a good idea for the judgment to set out exactly what the reasons behind support are, in case one party might want to modify the support order later.

Last week the Court of Appeals decided a case which demonstrates just how important individual circumstances are to a spousal support case. In Cheever and Halperin ____ Or App ____ (2007), the court was faced with a very particular set of facts. In Cheever, the husband was a physician and his wife a technician at OHSU. When they divorced in 1999, the husband was ordered to pay spousal support through 2022, when the wife turned 65.

A year after the divorce, however, the wife remarried a retired dentist, with whom she lived on a sailboat, sailing around the world. She agreed that her ex-husband’s spousal support payments should terminate, and the court approved the modification.

However, when the wife’s new marriage did not work out and she returned to Oregon, she asked the court to reinstate her spousal support payments, arguing that the purpose behind the original spousal support order had not been satisfied.

Not surprisingly, the husband objected, based on the notion that his ex-wife had deliberately chosen a new, bohemian (and less expensive) lifestyle – not the high standard she’d become accustomed to during her first marriage. Because the support order was one of maintenance, which is designed to support a spouse with lower income in a “not disproportionate” lifestyle than that of the marriage, the husband argued that he didn’t have any burden to support her in that lifestyle now that she had lived more frugally.

The trial court didn’t agree with husband: it found the original purpose of the support award hadn’t be satisfied, and so the original order was reinstated. The trial court rejected the husband’s position, and said that the husband got “a four year break” in his payments, but that he must continue to pay through 2022.

The husband appealed, claiming the trial court erred in four separate ways. The most important argument he made were that the trial court placed an undue emphasis on the wife’s past and current circumstances, but not the reason the support was terminated.

The Court of Appeals rejected the husband’s argument. The trial court had the power to reinstate the award based on statute (ORS 107.136); the court didn’t place any undue emphasis on any one factor in its decision, and the gist of the husband’s argument – that it simply wasn’t fair for him to have to resume support after his wife’s remarriage and lower standard of living – just wouldn’t fly. The reason for support at the time of the dissolution and at the present time were the same, and the wife’s position now and then were also the same. The support order would continue until 2022.

Common Divorce Myth: Courts Always Keep Kids Together May 30, 2007

Posted by shelleycm in Child Custody, Dissolution, Legal Developments, Myths.
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There is a fair amount of truth to this myth, actually. Placement of children in a dissolution action (and in any custody proceeding) is based on the “best interest of the child,” and often keeping siblings together does serve the best interests of children. McBrayer v. Randolph, 191 Or App 553, 559-62, 83 P3d 936 (2004). (We’ve discussed the “best interest of the child” standard previously in a post on this blog.)

But keeping children together is only one factor to consider.  Recently, the Oregon Court of Appeals heard a case originally from Washington County, where it determined it wasn’t in the child’s best interest to be placed with his sibling. In Morales and Morales, 213 Or App ___ (2007), a child, E, was subjected to negative comments and attitudes about his father by his mother and sibling and was criticized for wanting to live with his father. Id. When living with his father, E made healthy choices and lost weight (he had been an overweight child to begin with) and father encouraged him to exercise. Id. E missed school when he lived with his mother, but his father was in frequent contact with E’s teachers at school. Id.

The Court determined E was better off with his father, because the siblings weren’t close, E expressed a preference for living with his father, and because the Court did not find the mother’s testimony to be credible and because the Court had misgivings about the mother’s tendency to involve the older child in her disputes with the father. Despite the fact his father in the case had physically assaulted the older child of the relationship at one time in the past, the Court found the father was appropriately remorseful, had taken steps that this would not happen again, and found E would be better placed with his father than his mother. Id.

The moral of Morales appears to be that an appropriate child custody placement involves far more than a simple “keep the kids together” determination, and that a parent’s concern, caretaking, and involvement in a child’s life can overcome powerful arguments — including past domestic violence — to give custody to the other, less involved parent.

To sell or not to sell? May 15, 2007

Posted by shelleycm in Dissolution, Legal Developments, Property Division.

In 2003, the Oregon legislature passed a bill that automatically prevents parties in a dissolution of marriage case from engaging in certain activities once the case is filed, for the petitioner, or after service of the petition on the respondent, for the respondent. Practitioners (who often sought these sorts of restraining orders on their own, before they became automatic) tend to refer to it as the “statutory restraining order.”

What exactly does the statutory restraining order prevent the parties from doing? Neither party can cancel, modify or allow insurance policies to lapse — these include heath, homeowner, renter, or auto policies — for the other party or a child of the parties. ORS 107.093(2)(a). The parties can’t change the beneficiaries to any insurance policy, either. ORS 107.093(2)(b).

Once the divorce case is underway, the parties can’t sell or encumber “any property” in which the other party has an interest unless the other party consents or the court allows the sale or encumbrance. There’s an exception to this provision, though for deals made for usual course of business or necessary life expenses. ORS 107.093(2)(c).

One of the more confusing provisions is that which prevents either side from “making extraordinary expenditures without providing written notice and an accounting” of the expenses. ORS 109.093(2)(d)(A). The question is — well, what’s an extraordinary expenditure? I recently researched this, and don’t have any good answers to it. In listening to the hearings and committee meetings at the legislature, it’s clear that the Senate and House were more interested in other provisions of the legislation — those dealing with the selling and encumbering of property, and making changes in insurance policies — than in the last bit about extraordinary expenditures. This issue hasn’t come up in the court of appeals, and so we don’t have court guidance yet, either.

Either party can request a hearing to ask the court to waive or modify certain provisions of the restraining order. ORS 107.093(3).

If you’re worried about whether the statutory restraining order is going to apply to transactions you’d like to conduct after your divorce action has been filed (if you’re the petitioner) or after you’ve been served (if you’re the respondent), make sure you talk to your attorney first.