Proper Service and Default Judgments
Minor Children Testifying: Law Amended
Financial Fallout in Today’s Economy
Emotional Challenges to the Dissolution Process
A spouse who makes separate property contributions to the acquisition of community assets is entitled to be reimbursed for the contributions, at the time of division of the assets, unless there was a transmutation of the separate property asset before the contribution (Section 852 of the California Family Code). The question that must be answered is: How much of the separate property contribution can the contributor anticipate receiving? The answer to the question will depend upon the net value of the community property asset in which the separate property contribution was made. Section 2640 (c) of the Family Code of the State of California provides, in pertinent part, as follows:
“The amount reimbursed shall be without interest or adjustment for change in monetary values and may not exceed the net value of the property at the time of the division.”
The final answer is that you cannot receive more than the initial separate property investment, even if the community asset increases substantially. However, you can receive less than the initial separate property investment, depending upon the net value of the community asset in which the separate property asset was invested.
Section 852 (a) of the California Family Code provides as follows:
“A transmutation of real or personal property is not valid unless made in writing by an express declaration that is made, joined in, consented to or accepted by the spouse whose interest in the property is adversely affected.”
Section 852 (c) of the California Family Code provides:
“This section does not apply to a gift between the spouses of clothing, wearing apparel, jewelry, or other tangible articles of a personal nature that is used solely or principally by the spouse to whom the gift is made and that is not substantial in value taking into account the circumstances of the marriage.”
What does this language mean? Essentially, gifts can be made between spouses as long as it is personal in nature and not of substantial value based upon the standard of living of the parties. This leaves us with a general definition that may or may not be applicable in your case. Is a car a gift, if it was given by one spouse to the other spouse, and not substantial in value relative to the overall wealth of the parties? The answer is probably no, since a car is not considered an article of personal nature. What about a gift of golf clubs? What about a gift of a golf cart? The golf clubs probably would be considered a gift as an article of a personal nature, but probably not a golf cart. Suppose you gave a birthday or anniversary gift to your spouse consisting of a washer and dryer. Your spouse is the primary user of the equipment. Is it a gift? I would say no, because a washer and dryer are not “personal.”
Even a gift of a piece of jewelry given as a gift may be questioned. If the jewelry is valuable and substantial – again, when taking into account the circumstances of the marriage – it may not qualify as a gift.
Suppose the gifting spouse used separate assets to pay for a gift; would the gifted spouse be entitled to reimbursement in the dissolution? If the gift is personal, then probably not.
Epstein Credits apply to payments on community debts (debts existing as of the date of separation) after separation by you or your spouse. This concept arose out of the case of In re Marriage of Epstein (1979) 24 Cal 3rd 76, which states in pertinent part:
“A(s) a general rule, a spouse who after separation of the parties, uses earnings or other separate funds to pay preexisting community obligations should be reimbursed therefore out of the community property upon dissolution.”
This concept provides the paying spouse with a reimbursement potential for separate funds used to pay any community debts after separation. Some of the exceptions to this concept are:
- Debt for the purchase or acquisition of an asset such as an automobile that was used by the paying spouse after separation;
- Agreement reached between spouses that payments would be made without reimbursement;
- Payments made in lieu of child support, spousal support, or both, by the paying spouse;
- Payments made as a gift.
The judge, as you can imagine, has discretion, depending on the facts presented, to grant or deny reimbursement. This concept can provide the paying spouse with an opportunity to retrieve money or other assets of the community. Keep accurate records of the payments made on community debts after separation and be prepared to prove to the judge, when required, that you in fact made payments on community debts from separate property after your separation.
One tenet in our system of justice is that a party involved in litigation is entitled to know when a legal step has been taken by the other side. This concept is called fundamental due process. Due process is satisfied when a party is given (served with) a copy of any legal paperwork prepared by the opponent, a process called proper service.
In family law actions, a party that files moving papers with the court must serve a copy of the papers with the other party, and if the other party prepares responsive papers, those papers must be likewise served in return. Service of the moving papers must be by personal service, even if the receiving party agrees to acknowledge service in another way. Personal service means that the party or parties named in the family law action must personally receive the moving papers. Furthermore, personal service requires that papers be served by an individual over 18 years of age who is not legally involved in the action. Once that person has successfully given the papers to the receiving party, he or she must prepare proof of service, sign it, and file it with the court under penalty of perjury.
If responsive pleadings are not filed and properly served by the other party within the time allotted, a default judgment may be entered. The key here clearly revolves around “proper service.” What happens if service is not properly completed and a default judgment is entered against the other party? Is this akin to failure by that party to answer the allegations in the moving papers? The answer is yes.
In addition, any judgment rendered against the other party may be void if it turns out that party was not served properly. If void, any judgment rendered against that party is subject to a motion to set aside. The consequences could be devastating. Suppose a judgment was entered for child or spousal support, and years later the party against whom the judgment was rendered moves to set the judgment aside because of improper service and is successful. In that case, no money is owed for child or spousal support and no arrears of support have accrued.
Bear in mind that a default judgment cannot be entered unless an additional, valid proof of service is filed with the court showing that more than 30 days have passed since the original paperwork was served on the respondent (the summons and petition, proposed judgment, and all required notices). California Family Code Sections 17430 (a) and (b) (see below) describe this requirement as it applies to a local child support agency versus a defendant in litigation.
False proof of service, whether attached to a return of summons or filed separately, could make all future proceedings in a family law case void. Judgment obtained based upon false service should cause the court to find any action taken in the case to in default and set it aside. This is the case even if a long time has elapsed since the false claim of personal service was represented to the court.
Be careful when requesting an entry of a default against the respondent in a family law action. The original summons and petition as well as other supporting pleadings must themselves have been served properly on the respondent. Neither Section 473 of the Code of Civil Procedure nor Section 3691 of the Family Code (see below) will save the day. If you are defending yourself against a judgment of default for lack of proper service, it is possible that a default judgment is void for lack of the court’s jurisdiction over you. A judgment of default that is void for lack of personal jurisdiction over the respondent is void from the beginning, and should be set aside if the proper motion is filed.
This is fundamental due process at work and will be jealously guarded by the courts.
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Section 17430 of California Family Code
(a) Notwithstanding any other provision of law, in any action filed by the local child support agency pursuant to Section 17400, 17402, or 17404, a judgment shall be entered without hearing, without the presentation of any other evidence or further notice to the defendant, upon the filing of proof of service by the local child support agency evidencing that more than 30 days have passed since the simplified summons and complaint, proposed judgment, blank answer, blank income and expense declaration, and all notices required by this division were served on the defendant.
(b) If the defendant fails to file an answer with the court within 30 days of having been served as specified in subdivision (d) of Section 17400, or at any time before the default judgment is entered, the proposed judgment filed with the original summons and complaint shall be conformed by the court as the final judgment and a copy provided to the local child support agency. . . .
Section 473 of the Code of Civil Procedure
(a) (1) The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.
(2) When it appears to the satisfaction of the court that the amendment renders it necessary, the court may postpone the trial, and may, when the postponement will by the amendment be rendered necessary, require, as a condition to the amendment, the payment to the adverse party of any costs as may be just.
(b) The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. However, in the case of a judgment, dismissal, order, or other proceeding determining the ownership or right to possession of real or personal property, without extending the six-month period, when a notice in writing is personally served within the State of California both upon the party against whom the judgment, dismissal, order, or other proceeding has been taken, and upon his or her attorney of record, if any, notifying that party and his or her attorney of record, if any, that the order, judgment, dismissal, or other proceeding was taken against him or her and that any rights the party has to apply for relief under the provisions of Section 473 of the Code of Civil Procedure shall expire 90 days after service of the notice, then the application shall be made within 90 days after service of the notice upon the defaulting party or his or her attorney of record, if any, whichever service shall be later. No affidavit or declaration of merits shall be required of the moving party. Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney's sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney's mistake, inadvertence, surprise, or neglect. The court shall, whenever relief is granted based on an attorney's affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties. However, this section shall not lengthen the time within which an action shall be brought to trial pursuant to Section 583.310.
(c) (1) Whenever the court grants relief from a default, default judgment, or dismissal based on any of the provisions of this section, the court may do any of the following:
(A) Impose a penalty of no greater than one thousand dollars ($1,000) upon an offending attorney or party.
(B) Direct that an offending attorney pay an amount no greater than one thousand dollars ($1,000) to the State Bar Client Security Fund.
(C) Grant other relief as is appropriate.
(2) However, where the court grants relief from a default or default judgment pursuant to this section based upon the affidavit of the defaulting party's attorney attesting to the attorney's mistake, inadvertence, surprise, or neglect, the relief shall not be made conditional upon the attorney's payment of compensatory legal fees or costs or monetary penalties imposed by the court or upon compliance with other sanctions ordered by the court.
(d) The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.
Section 3691 of the Family Code
The grounds and time limits for an action or motion to set aside a support order, or any part or parts thereof, are governed by this section and shall be one of the following:
(a) Actual fraud. Where the defrauded party was kept in ignorance or in some other manner, other than his or her own lack of care or attention, was fraudulently prevented from fully participating in the proceeding. An action or motion based on fraud shall be brought within six months after the date on which the complaining party discovered or reasonably should have discovered the fraud.
(b) Perjury. An action or motion based on perjury shall be brought within six months after the date on which the complaining party discovered or reasonably should have discovered the perjury.
(c) Lack of Notice.
(1) When service of a summons has not resulted in notice to a party in time to defend the action for support and a default or default judgment has been entered against him or her in the action, he or she may serve and file a notice of motion to set aside the default and for leave to defend the action. The notice of motion shall be served and filed within a reasonable time, but in no event later than six months after the party obtains or reasonably should have obtained notice (A) of the support order, or (B) that the party’s income and assets are subject to attachment pursuant to the order.
(2) A notice of motion to set aside a support order pursuant to this subdivision shall be accompanied by an affidavit showing, under oath, that the party's lack of notice in time to defend the action was not caused by his or her avoidance of service or inexcusable neglect. The party shall serve and file with the notice a copy of the answer, motion, or other pleading proposed to be filed in the action.
(3) The court may not set aside or otherwise relieve a party from a support order pursuant to this subdivision if service of the summons was accomplished in accordance with existing requirements of law regarding service of process.
Should minor children be called upon to testify in custody proceedings?
Twenty or more years ago, judicial officers handling divorce or paternity cases in which child custody was an issue would routinely interview the minor children before rendering a custody decision. The judicial officer would give due weight to the information received from the minor children.
California Code Section 3042 gave this authority to the judicial officers, providing as follows:
“(a) If a child is of sufficient age and capacity to reason so as to form an intelligent preference as to custody, the court shall consider and give due weight to the wishes of the child in making an older granting or modifying custody.”
The next paragraph, Part B of Section 3042, provides the court with the control of the examination of the child witness by giving the court the authority to exclude calling the child as a witness. However, Part B seems to limit that authority by granting to the court alternative means of ascertaining a child's preference.
Then around twenty years ago, for reasons entirely unknown to the author, the practice of including minor children in a custody proceeding was discouraged. The belief was that the child custody issue was between the parents and should not directly involve the children. This was in spite of Section 3042. As an alternative, obtaining information from trained professionals such as psychologists or therapists or appointing an attorney to represent the interests of the minor children became the more acceptable methodology in contested custody cases.
We now appear to have come full circle. New legislation has been enacted that will require trial courts, in making or modifying custody or visitation orders, to consider and give due weight to the wishes of a child who is of sufficient age and capacity to form an intelligent preference. The legislation also requires the trial court to provide alternative means of obtaining input from a child if it bars calling the child as a witness. This new legislation amends Section 3042 of the Family Code. The amended code section became operative January 1, 2012.
What is “discovery”? And how can you benefit from the use of discovery in your family law litigation?
Discovery is the process of obtaining information relating to matters involved in a court case. In a dissolution of marriage, for example, discovery allows you to acquire information about assets and liabilities accumulated during the marriage by forcing the other party (your spouse in this scenario) to give you his or her description of those assets and liabilities. With these details, you can analyze whether there is a question of separate, as opposed to community, property.
Discovery is not limited to parties to the proceedings. It can also involve third parties or entities (such as a bank) that may either have information regarding specific assets or liabilities that you may believe are part of the community estate or are holding an asset you may believe to be part of the community estate. Details that are discoverable include bank account balances, real property investments, brokerage house investments, bonuses, profit-sharing money held for the benefit of one of the parties, and so forth.
In addition, you may be able, through the discovery process, to acquire information about domestic violence or paternity through the knowledge of third persons. You may also wish to discover the state of your spouse’s health, if support is an issue, by obtaining your spouse’s medical records.
As you can see, the use of the discovery process has wide application in family law matters and should therefore be used regularly and consistently by you to gain the information that would otherwise not be available to you.
Parties to a dissolution action are generally poorer today than they were three or four years ago. The economy is weak. Unemployment is high. Housing values have fallen. Earnings are not keeping up with the cost of living. Taxes are constantly threatening to increase at the local, state, and federal levels. Most people will confirm that they are less well-off now than they were a few years ago.
New questions for the dissolution process arise in this economy. What should be done with a family residence that is underwater, that is, worth less on the market than you owe on the mortgage? Should you try to retain the property in the expectation that it will return to its previous price? Is it feasible to retain the family residence for your children, even if you owe more money now on the house than its current value? Is there enough potential support so that you can maintain the mortgage payments? How much will an increase in taxes affect your ability to keep your child or children in private school or provide them with daycare? These questions must be explored and answered. Understanding the evolving economy is a requirement to an accurate analysis of what is really available to you financially through the dissolution process. Do what is necessary to recognize not only the present financial fallout from your dissolution but also how the economy, as it trends over time, will affect the future for you and your children.
The emotional fallout can be palpable in divorce, especially if you are the spouse on the receiving end of the dissolution action. Your life as you know it is being torn apart. Focusing on the issues can be difficult, if not impossible, when you are distraught. Outright hysteria is not uncommon.
Unfortunately, a strong emotional reaction, however understandable, will impede your ability to deal rationally with the issues involved in the dissolution process. If this occurs – if you are experiencing an emotional meltdown or outright depression -- care must be taken to analyze your decision-making capabilities. Seek and follow the advice of a professional in the mental-health field who is trained and able to deal with divorce issues in a rational and dispassionate way. Discuss with them your potential approach to the divorce and all of its ramifications before making decisions that will affect your future. Otherwise, you could pursue regrettable options that are based on emotion rather than careful consideration. Instances where this occurs include custody (such as seeking revenge against your spouse by withholding exposure to the children without insight about what would be most healthy for your family); assets (perhaps disposing of property or assets without proper thought as to whether it should be retained); and support (for instance quitting a job you have had for a number of years in order to punish your spouse by eliminating the support option, regardless of the impact on your own future). Let the outcome of your dissolution be guided in whole or in part by third-party, objective advice from a mental-health professional. Remember: it is much more difficult to set aside an agreement reached in a dissolution action once the judicial officer approves it than to have it handled properly (that is, dispassionately) in the first instance.
My experience in the divorce arena has provided me with insight that the emotional experience is temporary, and the end result for you will be a happy and more balanced future. A future filled with exploration and an expansion of your universe. But do not try to “go it alone,” psychologically speaking, as you navigate the dissolution process. You will be far better served by the approach set forth above.
Children are the innocent victims of a divorce. They are unable to process the reality that their parents no longer want to remain together, so they blame themselves for instigating the breakup, which makes more sense to them. Especially for children approximately aged six to thirteen, memories of their own misbehaving are somehow the cause or the motivation for the parents separating. Usually their sense of guilt disappears with time and counseling. And if the child is old enough to understand the complicated dynamics of a breakup, frank discussions often assist in navigating the unchartered waters of the breakup.
However, an unhealthy approach to the custody issue will further traumatize your children and may lead to a lifetime legacy of emotional challenges.
The law provides for the awarding of primary custody of minor children to the parent based upon the “best interest” of the children. The issue, however, is far more complicated in practice. What constitutes best interest? Is it one main factor or a variety of minor factors? Generally speaking, all facets of how you and your spouse have participated in the lives of your children should be considered as you prepare your case, such as the history of school participation, education assistance, discipline, and guidance. In addition, what about your behavior and habits? Does a parent use tobacco or consume alcohol to excess? Is one parent away from the family residence for extended periods of time? Indeed, these questions should be explored as they will surely have an impact on the lives of your children and will clearly influence the judicial officer when considering which parent should have primary placement. Bear in mind that the officer will also consider that children should be placed in the custody of the parent who is best able to share frequent and continuing contact of the children with the other parent.
Will you seek sole or joint legal custody? Joint legal custody invests in both parents decision-making authority involving the minor child or children, and the parents must work in concert. Sole legal custody provides for one parent to make the important decisions in areas of health, education, and general welfare of the minor children. Consideration must also be given to the recommendation you provide relating to the timeshare each parent will have with the children.
You should be able to present a parenting plan to the judicial officer handling your case with appropriate reasons for your position. To have the most support from the officer, embrace the scenario of “best interest” in your approach to the issue of child custody. Do not seek to punish the other parent out of hatred, bitterness, or a desire to seek revenge. Be careful in this area!
It is normal to have concerns about your financial future.
Section 4320 of the California Family Code (see below) sets forth the factors the judicial officer explores when asked to decide the issue of spousal support in a dissolution proceeding. If you are seeking spousal support, be prepared to provide the judicial officer with pertinent evidence on the various factors that may be applicable to your case, such as lifestyle and the ability of your spouse to provide support. Failure to do so can be very damaging to your request.
The trend today in the law is to encourage both parties to become self-supporting within a reasonable length of time, typically half the length of the marriage for marriages of fewer than ten years and a reasonable period of time for longer-term marriages. However, judicial officers are still mindful of the need for spousal support during the transition period in order to maintain the supported spouse in the lifestyle enjoyed during the latter portion of the marriage.
In awarding spousal support, two of the factors the court considers are employability and medical condition of the supported spouse. These as well as other factors may limit or prevent any sort of employment or self-employment now and in the future for the spouse seeking support. The medical condition issue may require the presentation of expert testimony to equate the condition with restriction of employment or self-employment opportunities for the supported spouse.
In certain instances, spousal support can be ordered paid to the supported spouse without a time limit. This may be the case, for example, in the dissolution of long-term marriages, where the supported spouse has been out of the work force for possibly decades and may not be able to compete with younger applicants in entry-level positions.
Even if you have a short-term marriage (fewer than ten years), you must be alert to the factors set for in Section 4320 of the Family Code in seeking (or defending against the payment of) spousal support, even if on a very limited term. For marriages of extremely short duration, a pre-set calculation is generally used by the court to determine a temporary spousal support award.
If you are the supported spouse with a time limit to your spousal support, you would be well advised to explore employment opportunities available based not only on your experience but also on your interests. Education to learn applicable skills is also an excellent idea to gain employability, but your education must not be fanciful; it must follow the path towards the generation of income, whether through employment or self-employment. In other words, the education you seek must have a financial goal. Otherwise, your spouse can take you back to court to revisit the spousal support award, claiming that you are not dedicated to becoming self-sufficient, and the spousal support award can be reduced. Bear in mind also that not seeking employment or self-employment can be used against you as a factor, that is, as a “character flaw,” that indicates you are not deserving of spousal support.
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Section 4320 of the California Family Code (2010)
In ordering spousal support under this part, the court shall consider all of the following circumstances:
(a) The extent to which the earning capacity of each party is sufficient to maintain the standard of living established during the marriage, taking into account all of the following:
(1) The marketable skills of the supported party; the job market for those skills; the time and expenses required for the supported party to acquire the appropriate education or training to develop those skills; and the possible need for retraining or education to acquire other, more marketable skills or employment.
(2) The extent to which the supported party's present or future earning capacity is impaired by periods of unemployment that were incurred during the marriage to permit the supported party to devote time to domestic duties.
(b) The extent to which the supported party contributed to the attainment of an education, training, a career position, or a license by the supporting party.
(c) The ability of the supporting party to pay spousal support, taking into account the supporting party's earning capacity, earned and unearned income, assets, and standard of living.
(d) The needs of each party based on the standard of living established during the marriage.
(e) The obligations and assets, including the separate property, of each party.
(f) The duration of the marriage.
(g) The ability of the supported party to engage in gainful employment without unduly interfering with the interests of dependent children in the custody of the party.
(h) The age and health of the parties.
(i) Documented evidence of any history of domestic violence, as defined in Section 6211, between the parties, including, but not limited to, consideration of emotional distress resulting from domestic violence perpetrated against the supported party by the supporting party, and consideration of any history of violence against the supporting party by the supported party.
(j) The immediate and specific tax consequences to each party.
(k) The balance of the hardships to each party.
(l) The goal that the supported party shall be self-supporting within a reasonable period of time. Except in the case of a marriage of long duration as described in Section 4336, a "reasonable period of time" for purposes of this section generally shall be one-half the length of the marriage. However, nothing in this section is intended to limit the court's discretion to order support for a greater or lesser length of time, based on any of the other factors listed in this section, Section 4336, and the circumstances of the parties.
(m) The criminal conviction of an abusive spouse shall be considered in making a reduction or elimination of a spousal support award in accordance with Section 4325.
(n) Any other factors the court determines are just and equitable.