BILL ANALYSIS Ó SB 1255 Page 1 SENATE THIRD READING SB 1255 (Moorlach) As Amended June 1, 2016 Majority vote SENATE VOTE: 35-0 ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Judiciary |7-1 |Mark Stone, Burke, |Wagner | | | |Chau, Chiu, Cristina | | | | |Garcia, Holden, Ting | | | | | | | | | | | | ------------------------------------------------------------------ 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. SB 1255 Page 2 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 SB 1255 Page 3 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: None. 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. 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. 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. 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 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. 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 SB 1255 Page 4 "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. 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." (61 Cal.4th at 865.) This bill SB 1255 Page 5 takes up that challenge and sets forth a different rule that provides courts with broader discretion to properly consider each particular case. 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. This bill, as amended, does not address retroactivity, so the bill's impact on existing cases is based on Family Code Section 4, 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 SB 1255 Page 6 interested person in connection with an event that occurred or circumstances that existed before the operative date of the new 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. Analysis Prepared by: Leora Gershenzon / JUD. / (916) 319-2334 FN: 0003412