BILL ANALYSIS Ó
SB 1255
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Date of Hearing: June 8, 2016
ASSEMBLY COMMITTEE ON JUDICIARY
Mark Stone, Chair
SB
1255 (Moorlach) - As Amended June 1, 2016
SENATE VOTE: 35-0
SUBJECT: Dissolution of marriage: date of separation
KEY ISSUE: SHOULD THE "DATE OF SEPARATION" FOR PURPOSES OF
PROPERTY DIVISION IN A DISSOLUTION BE BASED ON ALL RELEVANT
EVIDENCE AND NOT JUST ON THE DATE OF PHYSICAL SEPARATION, WHICH
MAY NOT ALWAYS BE POSSIBLE TODAY DUE TO THE HIGH COST OF HOUSING
IN CALIFORNIA?
SYNOPSIS
California is a community property state. As a general rule,
property acquired during a marriage is community property, with
one-half the earnings of each spouse owned by the other spouse.
Separate property is property acquired before marriage, by gift
or inheritance, or after the spouses are living "separate and
apart." Case law had 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. However,
In re Marriage of Norviel (2002) 102 Cal. App. 4th 1152 and the
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recent California Supreme Court case of In re Marriage of Davis
(2015) 61 Cal.4th 846 both concluded that living in separate
residences is a threshold requirement for living "separate and
apart" and thus community property rules will continue to apply
at least until the parties live in separate residences. As a
result, courts now have no discretion on community vs separate
property when couples live together even after they have had a
final break in their marital relationships. However, a couple
may remain in the same house not because they have not
definitively separated, but because they are unable to afford
two homes or because they may choose to do so to aid in
co-parenting or some other reason. But, without any discretion,
courts will be unable to reach a just result in particular
cases.
This bill, seeking to restore the discretion that many courts
had previously exercised in determining the date of separation,
abrogates both the Davis and Norviel decisions, and defines the
"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 requires the court to
consider all relevant evidence when determining the date of
separation. The author notes that under this bill "nobody is
forced to either continue in a bad marriage, or face being
thrown out in the streets." This bill is supported by the
family law bar and has no reported opposition.
SUMMARY: Defines "date of separation" for purposes of property
division in a dissolution. Specifically, this bill:
1)Defines "date of separation" to mean the date that a complete
and final break in the marital relationship has occurred, as
evidenced by a spouse's expression to the other spouse of his
or her intent to end the marriage and conduct that is
consistent with that intent.
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2)Requires a court to consider all relevant evidence in
determining the date of separation.
3)Recasts provisions of the Family Code in terms of "date of
separation" rather than any period in which spouses are
"living separate and apart."
4)States the intent of Legislature to abrogate the recent
California Supreme Court decision In re Marriage of Davis and
the 2002 appellate court decision In re Marriage of Norviel.
EXISTING LAW:
1)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. (Family Code Section 760.
Unless stated otherwise, all further statutory references are
to that code.)
2)Provides that the earnings and accumulations of a spouse while
living separate and apart are the separate property of the
spouse. (Section 771.)
3)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. (Sections 910, 914, and 4302.)
4)Provides that a new law in the Family Code will apply
retroactively, unless, among other things, the new law would
substantially interfere with the rights of the parties or
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other interested person in connection with an event that
occurred or circumstances that existed before the operative
date of the new law. (Section 4.)
FISCAL EFFECT: As currently in print this bill is keyed
non-fiscal.
COMMENTS: California is a community property state. Except as
otherwise provided by statute, community property is generally
defined as all property acquired by a married person during the
marriage while living in California. (Section 760.) Under
California's community property system, one-half the earnings of
each spouse is owned by the other spouse. Separate property is
property acquired before marriage, by gift or inheritance, or
after the spouses are living "separate and apart," and is the
separate property of each spouse. (Sections 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, the disposition of separate
and community property is strictly governed by statute. There
is no discretion. Existing case law 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. (See, e.g., In re Marriage of Hardin (1995) 38
Cal. App. 4th 448; In re Marriage of Baragry (1997) 77 Cal. App.
3rd 444; In re Marriage of von der Nuell (1994) 23 Cal. App. 4th
730.) However, In re Marriage of Norviel (2002) 102 Cal. App.
4th 1152 and the recent California Supreme Court case of In re
Marriage of Davis (2015) 61 Cal.4th 846, which appear to be the
only published cases to analyze the circumstances of a party
claiming to be separated while living in the same residence,
both concluded that living in separate residences is a threshold
requirement for living "separate and apart" and thus community
property rules will continue to apply at least until the parties
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live in separate residences.
This bill, seeking to restore discretion that many courts had
previously exercised in determining the date of separation,
abrogates both the Davis and Norviel decisions, and defines the
"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 requires the court to
consider all relevant evidence when determining a date of
separation.
In support of the bill, the author writes:
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.
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
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nobody is forced to either continue in a bad marriage, or face
being thrown out in the streets.
Recent California Supreme Court case creating a bright line rule
for "living separate and apart" appears to unnecessarily limit
judicial discretion and to create difficulty for courts seeking
to make just decisions. No court had required that spouses
actually live in separate residences in order to be "living
separate and apart" until In re Marriage of Norviel in 2002.
In that case, a couple whose marriage had "always been
difficult" finally discussed divorce, with the husband
announcing the marriage was over and immediately taking steps to
prepare a rental house for his occupancy. The court determined
that, in absence of moving out, such steps were not sufficient:
"[L]iving apart physically is an indispensable threshold
requirement to separation, whether or not it is sufficient, by
itself, to establish separation." (Norviel, 102 Cal. App. 4th
at 1162.) The court noted that any different result required
legislative action. The court did leave open the possibility
that there might be some case that satisfied separation while
the couple lived under the same roof, but that "unambiguous,
objectively ascertainable conduct amounting to physical
separation" must be demonstrated. (Id. at 1164.)
In Davis, the wife announced in June 2006 that she was "through"
with the marriage and began to keep separate finances, though
the couple had years earlier begun living separate lives.
However the couple continued to live in the same house, and
continued to do so even after the wife filed for divorce in
December 2008. The wife finally moved out of the house in July
2011. 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. The
wife, however, argued that the court should instead consider the
totality of the circumstances when determining the date of
separation based on the conduct of the spouses "evidencing a
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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, 61 Cal.4th at 850.) Both
parties claimed that the other spouse's proposed interpretation
was unworkable and would lead to harsh results. The trial court
found that the "date of separation" was June 1, 2006, and the
appellate court affirmed.
The California Supreme Court reversed the lower court's
decision, thereby affirming Norviel's holding 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. (Id. 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. The
Court also noted that the Legislature had a decade post-Norviel
to amend the "separate and apart" statutory language and "has
failed to do so," thus convincing the Supreme Court "that the
Legislature intended the statutory phrase 'living separate and
apart' to require both separate residences and accompanying
demonstrated intent to end the marital relationship." (Id. at
863-64.)
It is important to note that the Davis Court did not completely
rule out the possibility that a couple living under the same
roof could be found to be living separate and apart. In a
footnote, the Court stated that 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." (Id. at 864,
footnote 7.) However, given the strong facts of the Davis case,
it is difficult to imagine a fact pattern that would satisfy the
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Court's requirements, short of building a wall down the center
of a couple's home.
This bill provides courts with more discretion instead of a
bright-line rule. This bill abrogates both Davis and Norviel,
and instead requires that a court 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,
basically the law before both Davis and Norviel. Requiring
courts to determine the date of separation based on a totality
of the evidence should benefit the parties by ensuring the court
apply the facts of the case to the law and determine what is
fair given the parties' unique circumstances. While this could
increase litigation costs, it will increase just outcomes.
Moreover, families may definitively separate, but be unable to
move to separate residences because of the high price of housing
here in California, where an average two-bedroom apartment in
Los Angeles rents for almost $2,500 a month
(https://www.rentjungle.com/average-rent-in-los-angeles-rent-tren
ds) and the median house price in the Bay Area is over $650,000
(http://blog.sfgate.com/pender/2016/01/21/median-bay-area-home-pr
ice-rose-barely-in-december). Alternatively, couples may choose
to divorce, but remain in the same house for other reasons, such
as more effective co-parenting. The Supreme Court's bright-line
rule does not allow courts to recognize these realities and
better assist these families. The law should be sufficiently
flexible so that trial courts can address the various factual
situations that will arise and issue just decisions. The
Supreme Court, in Davis, acknowledged that the bright-line rule
its ruling requires "may work hardship in some specific
situations," but "if there are other policy concerns that now
advise the adoption of a different rule, it is up to the
Legislature to craft one." (Id. at 865.) This bill takes up
that challenge and sets forth a different rule that provides
courts with broader discretion to properly consider each
particular case.
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Bright-line rules, like the rule established in Davis and
Norviel, generally provide clear directives and 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. However, bright-line rules and uniformity often fail to
achieve a just result. This is particularly troubling in family
law where courts are given significant flexibility to provide
just results in each unique fact pattern in, for example, child
custody and spousal support cases. This bill provides slightly
greater flexibility with property division.
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. It goes without saying that the option that considers all
relevant evidence allows for a more just result than a
bright-line rule that cannot necessarily do justice in
particular cases, even if the facts warrant it. And this bill,
by choosing the all relevant evidence option, will provide for
the most just results.
Retroactive effect of new family law statutes. This bill, as
amended, does not address retroactivity, so the bill's impact on
existing cases is based on Section 4 of the Family Code, which
provides that a new law in the Family Code will apply
retroactively, unless, among other things, the new law would
substantially interfere with the rights of the parties or other
interested person in connection with an event that occurred or
circumstances that existed before the operative date of the new
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law. The Davis case in 2015 changed the law on date of
separation in all but the Sixth Appellate District (which
already had the Norviel case). This bill changes the law
effectively back to what it was before both Davis and Norviel
and that change will impact existing cases (cases where the date
of separation has not yet been determined by a court), unless
doing so would substantially interfere with the rights of the
parties. This general retroactive effect, unless there is
substantial interference with a party's rights, provides the
court with sufficient flexibility to protect the rights of all
parties, as appropriate under the facts of each particular case.
By following the general Family Code rule, this bill provides
for both maximum fairness and maximum protection of the parties.
ARGUMENTS IN SUPPORT: The Family Law Section of the State
writes in support:
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.
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REGISTERED SUPPORT / OPPOSITION:
Support
American Academy of Matrimonial Lawyers, Southern California
Chapter
Association of Family and Conciliation Courts, California
Family Law Section of the State Bar
Family Law Section of the Beverly Hills Bar Association
One individual
Opposition
None on file
Analysis Prepared by:Leora Gershenzon / JUD. / (916)
319-2334
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