BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015-2016 Regular Session
SB 1255 (Moorlach)
Version: February 18, 2016
Hearing Date: May 3, 2016
Fiscal: No
Urgency: No
NR
SUBJECT
Dissolution of marriage: date of separation
DESCRIPTION
This bill would define "date of separation" for purposes of the
Family Code as the date that a complete and final break in the
marital relationship has occurred, as evidenced by a spouse's
expression of his or her intent to end the marriage and conduct
that is consistent with that intent, and would update the Family
Code to reflect this definition.
BACKGROUND
California is a community property state. Except as otherwise
provided by statute, community property is generally defined as
all property, real or personal, wherever situated, acquired by a
married person during the marriage while domiciled in
California. (Fam. Code Sec. 760.) Under a community property
system, one-half the earnings of each spouse is owned by the
other spouse. Separate property, which is property acquired
before marriage, by gift or inheritance, or after the spouses
are living "separate and apart," is the separate property of
that spouse. (Fam. Code Secs. 770-771.)
Unlike a determination of spousal support where courts are given
certain amounts of discretion to create a fair award based on
the circumstances of the parties (see Fam. Code Sec. 4320), the
disposition of separate and community property are strictly
governed by statute. Existing case law over the past 140 years
(with the exception of the Supreme Court's decision In re
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Marriage of Davis (2015) 61 Cal.4th 846) has required that to
qualify as living "separate and apart" a party must have no
intention of resuming marital relations and that the conduct of
the party evidences a complete and final break in the marital
relationship. Davis and In re Norviel (2002) 102 Cal.App.4th
1152 are the only published cases to analyze the circumstances
of a party claiming to be separated while living in the same
residence, and both cases concluded that living in separate
residences is a threshold requirement.
In Davis, the husband argued that spouses cannot be living
"separate and apart" while maintaining a single residence. He
contended that this bright-line rule served to provide clear
guidance to judges and offered predictability to litigants.
Inversely, the wife argued that the court should instead
consider the totality of the circumstances when determining the
date of separation based on the conduct of the spouse(s)
"evidencing a complete and final intent to part ways with no
plan of resuming the marital relationship, even if at that time
they are still living in the same residence." (Davis at 850.)
Both parties claimed that the other spouse's proposed
interpretation was unworkable and would lead to harsh results.
The California Supreme Court reversed the lower court's
decision, thereby affirming Norviel which held that "living in
separate residences is an indispensable threshold requirement
for finding that spouses are "living separate and apart" for the
purposes of determining what is separate, and not community,
property. (Davis at 865.) Chief Justice Tani Cantil-Sakauye,
writing for a unanimous Supreme Court, emphasized both the plain
language and historical interpretations of the statute, and the
public policy considerations behind the statutory language,
namely that a bright-line rule protects the lower earning
spouse.
This bill, seeking to restore the discretion that many courts
exercised in determining the date of separation, would abrogate
both the Davis and Norviel cases, and would define "date of
separation" as the date that a complete and final breakdown of
the marital relationship has occurred, as evidenced by a
spouse's express intent to end the marriage, coupled with
conduct consistent with that intent, and would require the court
to consider all relevant evidence when determining a date of
separation.
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CHANGES TO EXISTING LAW
Existing law provides that, except as otherwise provided by
statute, all property, real or personal, wherever situated,
acquired by a married person during the marriage while domiciled
in California is community property. (Fam. Code Sec. 760.)
Existing law provides that the earnings and accumulations of a
spouse while living separate and apart are the separate property
of the spouse. (Fam. Code Sec. 771.)
Existing law provides that the community estate is liable for a
debt incurred before or during marriage, which does not, subject
to agreement, include any period during which the spouses are
living separate and apart. (Fam. Code Secs. 910, 914, and 4302.)
This bill would define "date of separation" to mean the date
that a complete and final break in the marital relationship has
occurred, as evidenced by the spouse's expression of his or her
intent to end the marriage and conduct that is consistent with
that intent.
This bill would require a court to consider all relevant
evidence in determining the date of separation.
This bill would recast provisions of the Family Code in terms of
"date of separation" rather than any period in which spouses are
"living separate and apart."
This bill would state that the Legislature intends to abrogate
In re Marriage Davis and In re Marriage Norviel.
COMMENT
1.Stated need for the bill
According to the author:
Currently, under the California Family Code, in order to
establish date of separation in anticipation of dividing
property through divorce proceedings, a couple must
demonstrate that they are "living separate and apart." In the
recent case of In re Marriage of Davis (2015), the California
Supreme Court ruled that in order to be living separate and
apart, a couple must have separate residences.
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The Court's ruling removes the ability for a divorcing couple
to continue to co-parent their children in the same house
during the divorce proceedings and still keep their finances
separate. This forces at least one spouse to find and pay for
alternative housing in order to establish a date of separation
earlier than the final court order date at a time when
families are trying to closely monitor their spending and
transition the family unit through a trying time.
Often, one spouse cannot afford to move to a separate
residence, and can only afford such a move once a divorce is
finalized. This bill would remedy this situation, ensuring
nobody is forced to either continue in a bad marriage, or face
being thrown out in the streets.
2.This bill would require a court to evaluate parties' opposing
evidence in determining a date of separation
This bill would require a court to look at the particulars of a
situation and determine a date of separation that reflects both
a party's express intent and actions supporting that intent. If
courts are required to determine the date of separation based on
evidence, the parties may benefit from the court's ability to
apply the facts of the case to the law and determine what is
fair given the parties' unique circumstances. However, creating
a rule which relies heavily on judicial discretion encourages
parties to litigate the facts of each case, which results in
more litigation and higher attorney's fees. Money spent on
these disputes often comes out of the community estate, thereby
reducing the award to both parties.
In addition, discretionary rules arguably also open the door for
manipulation of the facts. Unless a physical separation is
required for a married couple to be "living separate and apart,"
one spouse may be able to manipulate the finances by
"back-dating" the date of separation upon filing for dissolution
to a date during which the parties continued to reside together
but the marriage was rocky and difficult. Thus the
higher-earning spouse may continue to reap the benefits of
living in the home - eating meals, doing laundry, and receiving
mail - and then years later, upon filing for dissolution, refer
back to other, more subtle conduct as evidencing a breakdown in
the marriage and claim that all earnings form that day forward
are separate. (See, e.g., In re Marriage of Baragry (1977) 73
Cal.App.3d 444, 446-448.)
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The proposed legislation would also affect cases falling outside
the Davis scenario (see Background). Specifically, existing law
provides for a "period of separation" where the parties are
living separate and apart and have the requisite intent to make
a final and complete break. Nothing in the existing law,
however, has been interpreted to foreclose the possibility of
multiple periods of separation. For example, Family Code Section
4336 refers to "periods of separation" in determining whether a
marriage is of long duration. By requiring that a court pinpoint
a final break in determining a "date of separation," this bill
could inadvertently prevent a court from finding multiple
periods of separation. This could arguably require parties, who
have separated but later reconcile, to account for all of their
earnings and accumulations that they may have spent or given
away, based on a genuine belief that they had the right to do
so, during "separation." A party may also end up being liable
for debts incurred by the other party during the period they
believed that they were separated. This may have the unintended
consequence of discouraging separated parties from reconciling,
which is contrary to California's stated public policy of
preserving marriages. Additionally, this bill would not account
for "conditional separations," such as where one spouse
separates in all respects not intending to return unless the
other spouse corrects some undesired behavior (substance abuse,
infidelity, gambling, inattention, etc.).
3.Judicial discretion versus bright-line rule
This bill would abrogate both In re Davis and In re Norviel,
which established a bright-line rule that required parties to
live separately in order for income to be considered separate
property. The bill would instead define "date of separation" to
mean the date that a complete and final break in the marital
relationship has occurred as evidenced by a party's express
intent to end the marriage and conduct consistent with that
intent.
In 2002, the Sixth District in Norviel created a bright-line
rule that parties cannot live together and yet be separated. The
court specifically held that, in the absence of what it termed
unambiguous, objectively ascertainable conduct amounting to a
physical separation under the same roof, parties could not be
deemed living separate and apart under Family Code Section 771
while they still lived in the same house. (Norviel at 1164.)
Bright-line rules generally provide clear directives and
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guidance to judges and a measure of predictability to attorneys
and litigants. They create uniformity among courts in the
dispensing of justice and the enforcement of statutes.
Uniformity, in turn, encourages a general understanding that
laws are applied fairly, without an undue subjectivity that
would allow certain people to be treated differently than
others. Pointing out practical benefits of bright-line rules in
the Davis controversy, the petitioner argued that "family courts
have enough difficulty trying to determine date of separation in
contested cases without the standard for 'living separate and
apart' to include couples who continue to live together. While
the existence of separate residences is easy enough to prove,
the existence of objective conduct evidencing 'a final break in
marriage' and trying to determine when that occurred based upon
the totality of the circumstances is not." (Petitioner's Opening
Brief On the Merits (2014) WL 1674529, p. 6.)
However, in support of this bill, the Executive Committee of the
Family Law Section of the State Bar (FLEXCOM) argues that a
bright-line rule creates harsh results. FLEXCOM writes:
The Supreme Court's ruling removes the ability for a divorcing
couple to continue to co-parent their children in the same
house during the divorce proceedings and still keep their
finances separate. This forces at least one spouse to find
and pay for alternative housing in order to establish a date
of separation earlier than the final court order date at a
time when families are trying to closely monitor their
spending and transition the family unit through a trying time.
Often, one spouse cannot afford to move to a separate
residence, and can only afford such a move once a divorce is
finalized. This bill would remedy this situation, ensuring
nobody is forced to either continue in a bad marriage, or face
being forced out of the residence.
While the reasoning noted by FLEXCOM supports a discretionary
rule in a situation where both parties have adequate income to
support themselves because both parties would be equally
effected by the division of community property, a question
remains as to whether a discretionary rule best protects a lower
earning (or unemployed) spouse when the breadwinner decides to
"separate" but remains in the home. A discretionary rule in
this situation allows the breadwinner, who presumably has
resources to attain an attorney, to backdate the "date of
separation" without the knowledge or consent of the economically
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vulnerable spouse. The further back in time the "date of
separation," and the longer it takes to resolve the disputed
"date of separation,"the more community property an economically
vulnerable spouse stands to lose. Thus, if a divorce is not
finalized until years later, the economically vulnerable spouse
(who arguably contributed to the household with domestic
activities and caretaking) may lose a significant amount of
money that would otherwise have been community property and
could have helped her establish a new residence after
dissolution.
At the same time, a discretionary rule would allow a court to
protect a party against a spouse that refuses to contribute or
to move out, and thereby drains the community estate. That
being said, staff notes that the court in both Norviel and Davis
did not foreclose on the possibility that a couple may live
"separate and apart" even though they continued to share a
residence. (See, e.g., In re Davis, fn. 7, stating: "Under the
facts presented by this case, we have no occasion to consider,
and expressly reserve the question, whether there could be
circumstances that would support a finding that the spouses were
'living separate and apart,' i.e., that they had established
separate residences with the requisite objectively evidenced
intent, even though they continued to literally share one roof;"
see also In re Norviel at 1164.)
Ultimately, either approach will, in at least some situations,
yield unfair or harsh results. As a matter of public policy,
the Legislature should seek to approve the method by which fair
and just results are most often achieved, taking into account
the growing percentage of self-represented litigants in family
law and the continuing stress on judicial resources.
4.Retroactivity
This bill would apply retroactively to cases pending on January
1, 2017. Proponents argue that Norviel was an "outlier" and
courts typically looked to a "totality of the circumstances" in
determining the legal date of separation, and therefore
retroactivity is necessary to provide uniform treatment to cases
filed prior to the Supreme Court's decision in Davis through the
enactment of this bill.
As a matter of public policy, it is preferable to ensure that
bills apply prospectively, so as not to change the outcome of
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ongoing litigation in favor of one party. Looking specifically
at marital property classification, applying this bill
retroactively will affect thousands of cases and awards that
would have otherwise been governed by the holdings in Norviel
and Davis. Such retroactive application could unconstitutionally
affect property rights. Given the concerns that arise with
retroactive application of any bill, the Committee may wish to
consider whether the bill should be limited to apply
prospectively only. The following amendment would remove the
retroactive language, as well as the language that would affect
pending litigation.
Author's amendment:
Section 6 reads: This act shall apply to all cases filed on or
after January 1, 2017.
Support : American Academy of Matrimonial Lawyers, Southern
California Chapter; Association of Family Conciliation Courts;
Executive Committee of the Family Law Section of the State Bar;
Family Law Section Beverly Hills Bar Association
Opposition : None Known
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation : None Known
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