February 2009 Archives

February 24, 2009

Big Problems, Big Solutions....We Need True Americans....

David Brooks, in his New York Times opinion piece today, argues that the Obama administration is trying to solve too many problems at once, a Herculean task doomed to failure in his opinion.  

I started writing this piece before the president's address to congress, and I'm finishing this as he ends.  Irrespective of your politics, you have to admit this guy can make us feel good about being an American, and makes you feel that he understands the magnitude of our many problems.  

Whether he, his cabinet, and Congress can come together with appropriate solutions is another matter.  True Americans need to put their differences aside, join together, and contribute to the solution.  This is not a time for ideology, party, or campaign rhetoric - it is a time for ideas, and the recognition that we have major problems we cannot pass on to our children and grandchildren, unless we also pass on the ability to solve them.  

Continue reading "Big Problems, Big Solutions....We Need True Americans...." »

February 21, 2009

Divorce Lawyers, Taxes, Jobs, and Self Employment....

I am self employed.  I have employees.  To keep an experienced, cohesive unit for the next upswing, paying them comes first.  If there is money left over after paying the expenses, I get paid.  I hire enough staff to handle the business I have. If I make a profit, I pay income taxes - the lower my tax rate, the more I have to spend on myself.  

Conservatives have argued for 3 decades that cutting taxes is the solution to everything from unemployment to bunions - at one point, they argued that we needed to lower taxes because we were paying off the national debt too fast, and that was supposed to be a bad thing [that was during the Clinton administration].  As a life long Republican, they lost me on that one - I thought we were only supposed to have debt to fund defense or stimulate the economy, otherwise it was good to get rid of it.

If I hear one more politician claim that cutting taxes results in employers creating jobs, I may climb a watch tower and start picking off people.  Cut General Motors' corporate taxes?  How many jobs does that create?  [Oh, right, it's broke so it doesn't pay any]  Cut Jay Leno's taxes, and he buys more antique cars, not hire more employees for the Tonight Show.

Cut my taxes, I don't create any jobs.  Maybe I'll buy an Italian suit, a Toyota, a Sony widescreen, or go to Europe for two weeks.  If I made a lot of money, cutting my taxes might cause me to buy a $500,000 yacht, a Ferrari, or a villa in Tuscany.  Not too many jobs created in this country, even incidentally, from those purchases.  If my taxes are cut, any jobs I help create are incidental and accidental.

Give me more clients who can afford to pay my retainer, and I just might have to expand my staff to handle the work.  If there are no new clients, I don't make a profit, so cutting my taxes doesn't help anyone - no profit, no taxes -  basic rule of economics.  Give me customers with money, and I'll figure out how many people to hire.  If there's profit, I'll pay the taxes and spend [or invest or save] the excess.  

How the right wing of my party has convinced so many people to the contrary is beyond me. It's become a bromide of "truthiness."  Educate children and take care of their health - somewhere down the road, they will make good, productive employees who will stimulate the economy, as I did.  Fix health care so I can continue to provide good health care to my employees.  Extend unemployment compensation when there are no jobs - the money gets spent at the gas station, McDonald's, pays rent locally, groceries, and generates more jobs - in most cases, the money gets spent as soon as it's collected, so it improves the business of others - they in turn can improve the business of others, and so on.

Put more cash in at the top, and it sits there.  Give Ted Turner another $1,000,000, and he'll buy more acreage - how does that stimulate anything other than a warm feeling for Ted?  Enough of Voodoo Economics.  Let's get real, and get this economy going.

One other little tidbit:  There's a commercial running that tries to put government expenditures into perspective:  It claims the bailout is the equivalent of spending $1 million dollars a day since the birth of Christ - sure sound's like a big number.  Here's another way of looking at it.  Congress just approved an $800 billion dollar bailout.  Yes that is a lot of money too, but it's barely twice the market capitalization of Exxon-Mobil.  The stimulus package costs twice the worth of a single US company - maybe not such a bad investment if you look at it in those terms.  And Exxon isn't the most valuable, it's just one I looked at out of curiosity.

February 20, 2009

Idiots, Home Loans, Foreclosures, and a Rescue Plan....

David Brooks' editorial today in the New York Times puts in perspective a problem we face with a rescue plan for poor planning.  From a conservative's standpoint, he explains why we need to fix the problem of excessive loans on undervalued houses using measures we might find unpalatable.  I suggest everyone read it.  Brooks is a conservative columnist; generally, I find Paul Krugman more realistic, but Brooks makes a good point.

While the magnitude of the problems our nation faces has come upon us more quickly than in prior recessions, we are repeating patterns that we have seen before.  The last cycle's bottom was the early 1990's.  What we are repeating is housing prices dropping after a bubble had run them to astronomical levels - the difference is that during that recession everyone had hope at each stage that we were at the bottom - it never felt so hopeless.  I bought my office in 1991 at what my co-buyers and I assumed was the bottom of the market - the actual bottom was about 4 years away at that point.

Our problems are what to do in a falling market.  In a divorce practice, we see these problems repeated on a daily basis with our clients and their spouses.  This time, there are complicating factors because of the magnitude of the bubble, and the ease with which large mortgages were created.  Generally, the parties fall into one of a number of categories:

Sometimes it's a couple who spent heavily throughout this century, as they were taught to believe they were entitled, borrowing "equity" they thought they had in their homes to fund their lifestyles:  A new Harley, a cruise to Europe, a ski condo in the mountains, a Hummer, a solid gold Rolex.  Now, getting divorced, the equity is gone, the lifestyle abruptly ending, and they can't sell their homes for what they owe.  Neither can keep the house alone, because they were dependent on two incomes, business is down, or unemployment intervenes.

On the other hand, we have those who finally bought into the housing market in 2005, anxious to buy something before they could no longer afford to do so.  Maybe they borrowed against a 401k, borrowed from parents, or paid the down payment with credit card advances.  Stretched financially, they felt they had no other choice, as prices had escalated dramatically.  These have been periodic cycles, where there is such urgency that you can't buy fast enough; next week the house will be gone, and a worse house will cost substantially more.

Then there are those who filled out loan applications with data that was unrelated to reality:  Puffing values, and overstating income.  Lenders were making loans to people who weren't qualified because the loan brokers made huge commissions, and Wall Street was willing to package the loans and sell them off in slices barely short of gambling.  These people could not afford the house under any traditional measure - any financial strain caused the house of cards to collapse.

Finally, there are the couples who bought a house years ago that they could afford, kept it for years, never refinanced as it went up in value, and still have quite a bit of equity left over.  Maybe they realized that those tempting refinances didn't really borrow out equity, they just caused their debt to increase.  These are the few lucky ones.  Some equity and credit intact to be able to go out and pick up a bargain when the market gets lower.  In my practice, they are the minority, by a wide margin.  

We all want our own home, our territory we can mark where we have some degree of freedom to be ourselves and entertain family and friends.  Some approach this with greater maturity than others.

As a society, we need to make decisions about how to solve the problems this situation has created for all of us.  If we lower the loans to match the value of the houses, the immature bear no burden for their conduct.  When prices eventually stabilize or go back up, do we reward them with the profit?  Is that fair to the rest of us, especially where we paid for their ability to keep the house in some way or another - higher taxes and interest rates, for example.  Or do we just pay the price by teaching people they can be rewarded for their screw ups.

These are not simple issues to deal with.  Maybe this time some idiots win.  To the extent we have little choice, Brooks is right, this is something we just need to do.  

We can't simply say that we are rewarding people for their mistakes - George Bush already did that in throwing money at Wall Street and the banks with no oversight - we are protecting the rest of us from the mistakes of others.  We cannot allow our families and friends to lose their jobs with no prospects for employment, and we cannot allow our banks to fail.  We have two severe recessions to serve as examples:  The U.S. Great Depression of 80 years ago, and the Japanese' experience at the end of the last century.  Doing too little is the risk - if we err, it needs to be on the side of too much.

My hope is that someone comes up with a way of making this seem more fair to the rest of us.  If the government endorses a method of reducing loans to equal present value, or lenders forgive some of the debt to avoid foreclosure, there should be a way we share in any subsequent increase in value.  Perhaps heavily taxing any subsequent profit if the house sells, rather than the present practice of allowing large profits to be collected tax free when they sell.

I don't pretend I have the answers, but some group of smart people must be able to come up with useful alternatives.  Both extremes in the debate need to put aside ideology and solve these problems.  Otherwise, we are all lost.

February 18, 2009

Vocational Evaluations in Divorce and Family Law Cases...

This week, I was in a position to respond to a request for a vocational evaluation in one of my cases.  The motion wasn't timely made, but to avoid the inevitable and direct the choice of evaluator away from my opponent's favorite, I stipulated to the request.  It may be a foolish expense in that case.  My client is actively seeking employment in a down market - she has a lot of experience in a family business, but no credentials that translate directly into a job - no degree and no license.  Her job reference is her husband [who may not be a reliable reporter], and who would hire someone for a very responsible position on the strength of a reference from the divorcing spouse?  Her skills are in a niche market.  On paper, she may not qualify for anything above a mid-level job, and those positions are not plentiful in San Diego at the moment - lots of people with skills at that level are facing unemployment.

But, the husband is anxious to get out from under a long term spousal support obligation, is desperate to find a way, and willing to spend the money.   We are pretty confident the evaluator won't do anything but suggest she do exactly what she is doing - unless the evaluator recommends she spend the time to get a degree and professional license over the next few years, rather than work.  Long range, that may be the better strategy, but we can count on the spouse to disagree.

In California, the court can order a party to undergo a vocational evaluation to obtain an opinion of the person's earning capacity, or suggest a plan of education leading to full time employment.  Family Code Section 4331.  It requires a motion, good cause, and an adequate opportunity to the other party to object.
That section provides in part
The examination shall include an assessment of the party's ability to obtain employment based upon the party's age, health, education, marketable skills, employment history, and the current availability of employment opportunities. The focus of the examination shall be on an assessment of the party's ability to obtain employment that would allow the party to maintain herself or himself at the marital standard of living.
From the lawyer's standpoint, the evaluation is to provide the judge with a basis to impute income to an unemployed or underemployed party.
I find they are most useful as a long range planning tool.  Even if the non-working party has no useful skills, the evaluation can provide a road map for training and experience, so in future years the paying spouse can point back to the plan and argue that the spouse did not due what he or she could have done to become self-supporting.  In California, it is the stated policy of the law that each person shall do his or her best to become self-supporting within a reasonable period of time.
The report has the tendency to shift the burden to the non-working party to prove what has been done to find the best possible job, or get the necessary education.  It comes from a neutral person, and judges tend to rely heavily upon them.  It can provide a devastating result for the person who cannot demonstrate that the failure to earn a living is not of their doing.
Sometimes, the result comes back and says the person can barely do better than minimum wage, but that is a rarity.  Sometimes, they provide the non-working spouses with suggestions they had not considered, and a potential career path.
In the current economy, they may not find any significant number of jobs available, but the requesting party is laying the foundation for future motions to reduce or terminate the support obligation.  From that person's standpoint, the motion is essential.  From the other's, the report can be a nagging problem.
February 16, 2009

Rainy Day in Rancho Santa Fe, CA....

Well, my staff all showed up today for work in Escondido, my primary office.  Not sure why, but I worked all day so they would think I was pulling my share of the load.  Typically, since the schools and courts are closed, so is the office.  We compromised: They didn't answer the phone.

Somewhere around 11:00, someone suggested we go for a ride to see my new desk at my other office, so I took the staff for lunch to the Inn at Rancho Santa Fe, an old fixture a block from that office.  It rained like crazy for Southern California, off and on, but only looks like about 1/2 inch. 

Not a bad day to be the boss.  No telephones, no new mail, a good meal, happy staff, and everyone was sleepy the rest of the afternoon - at least I was.  All back to normal tomorrow, except for more showers.

February 15, 2009

Family Law and the Stimulus Package Debate....

What does the debate over the Stimulus Package have to do with Family Law?  

Actually, the impact may have a huge impact.  But in this context, I want to focus on the process of developing a consensus.  It's just like a litigated divorce:  Two sides who [to one extent or another] find it impossible to see the merit in the positions advanced by the other, or for tactical or emotional reasons pretend there is no merit until the house burns down or the economy implodes completely.  Rent a DVD of "War of the Roses" for a slightly exaggerated version of the problem.

Now it's not like the economy is OK now.  Have you seen the unemployment chart - it's dropping almost straight down week after week, with no sign of leveling off, far faster and farther than each of the last two slow downs we thought were disasters.  

Just like the economy, you can take your family law issues and drive your house, car, credit rating, and children off a cliff if you can't come up with an effective solution.  And by "effective," I don't mean perfect, or even that everyone is happy, just one that makes the best of a bad situation.

Continue reading "Family Law and the Stimulus Package Debate...." »

February 14, 2009

Divorces and St. Valentine's Day...

This year was a reprieve:  No court hearings on Valentine's Day.  That's usually a good day to avoid court, because someone is always emotional.

No matter how sensitive we are, invariably a hearing will be set on the birthdate of one of the parties', one of their children or someone's parent, or on their wedding anniversary or parent's anniversary, or some other "significant" date one of the parties finds significant.  

We get complaints such as: "I know my wife's attorney set the hearing this date because that's the date my mother died."  Or, "Why didn't you ask before setting the hearing on this day.  It's been one year since my dog ran away [or my Ferrari got stolen, or I lost my watch, or MASH went off the air].  

Ain't easy accommodating the general public.
February 13, 2009

Blackwater, XE, and Branding..

It was announced that Blackwater, the American Mercenary Company paying $80K per soldier to provide military services in Iraq, is changing it's branding to "XE." Pronounced "Zeee", or something like that.  I guess Blackwater has that waterboarding/war-crime thing attached to it, and wants to appeal to a younger group now that Cheney is gone.  Like maybe the new guys won't notice we're the same old guys.

I guess that's what you do when you don't want people to remember what you did.  Change your name, pick up a few new friends, and keep doing what you're doing.

Sort of like Remington Steele; remember the semi-comedic detective series with Pierce Brosnan from about 25 years ago?  Hire a good looking front man for your agency so people will hire you, then have the brains doing the work in the background.  

You don't really want people knowing who is being paid by the government for doing its bidding, earning 100's of millions of dollars for providing soldiers of fortune.  The only difference is that no one was dying in RS, and we weren't creating enemies of the state to haunt us for decades.

Sorry for the rant, but it seems consistent with the false advertising thing I've been writing about.  Wouldn't it be nice if the new name was "Mercenaries by the Month," or something equally descriptive, so we'd know to whom we are giving our monies?

February 13, 2009

San Diego Divorce Judge with a Sense of Humor...

I was at a meeting with some lawyers last night planning the bi-annual Family Law Dinner for the San Diego Certified Specialists Committee. We generally unload on lawyers, clerks, and judges with great abandon - sort of a roast, but of a lot of people.  Searching for ideas for skits, one friend told us a story about a judge's recent decision - the type about which you want to make jokes.  

It started out with the friend saying a judge had named a child after her - another commented he didn't think the judge had children that young.  Curious, we needed to hear the whole story.

The friend was minor's counsel for a nine month old child - for the sake of humor, I'll call my friend Sophia:  Minor's counsel are appointed by the court to make recommendations about custody, and exercise certain rights of the child such as whether to disclose confidential records.  

A couple of weeks ago, the parents in her case were in court arguing about the name for the child.  Now in most cases where there is a fight over the child's name, its over whether the child takes the last name of the mother, or that of the father.  

Not this time, that would be too easy.  The parties, their two expensive lawyers, minor's counsel, and a Superior Court judge were involved in a dispute over the first name of the child, let's say Jennifer and Julia.  You can imagine the cost of that proceeding.

In true Solomonic style, after hearing the arguments of the cast of characters, she named the child "Sophia" after minor's counsel [remember, not actually Sophia, but we're changing names to protect the innocent].

Now if that isn't a good enough example for why you should stay out of court, I don't know what is.  It's bad enough that you might not get what you want, but to get a result no one wants?  Even "Sophia" thought it was a bad idea.  What's the point of that.  Maybe the judge needs a break.  Maybe the parents could have compromised:  "Junnifer", "Jelia", or something neutral like "Mary."

Now, preparing for appeal, we can question whether the court had the power to make that order.  If not a judge because the parent's are too immature to flip a coin, then who?
February 12, 2009

Drat, Only a Partial Holiday....

Mail person showed up.  I guess it's a real work day.  That means my staff expects me to work all day.  

Fortunately, I have a fun meeting to go to tonight - we're drafting the skits for the annual Family Law Bar Dinner.  The rejects [the jokes that are so true they're mean] are worth going for.

I hear the banks are open also.  Looks like only the courts care about our 16th president.

It sure doesn't feel like a holiday.  I wonder if I can get away without showing up on Monday?
February 12, 2009

Lincoln, Holiday, and Self Employment

Today is a holiday in some places and to some people.  Can someone tell me if my bank is open, or if I'll get mail?  I wonder how much inefficiency results from such uncertainty.

I know it's a court holiday, because all the courtroom calendars showed red for today.  A public servant I've known since law school is available for lunch in my neighborhood for a change, instead of near the courthouse.  In some ways, today is special but not because anyone is celebrating Lincoln's birth.

My staff will be in the office today.  We have a rule that if the courts and schools are both closed, we close.    Some schools are closed, some are open.  I guess the staff figured out how the rule applies, or maybe they're coming in because they couldn't figure it out.

We don't count today for most deadlines, because it's not a court day, and anything due today is extended until tomorrow, unless it is a deadline counting back from some date in the future.  Got that?  I have a guy who bugs me whose staff can't seem to count right, but it's not that hard - it's a little joy we joke about to make these days fun.

I really liked it before we started worrying about building in 3-day holidays for employees.  Every February 12th was Lincoln's Birthday, and the 22nd was Washington's.  None of this President's Day crap, where no one pays attention to presidents, except a few politicians giving speeches, and always the same date every year.  None of this moving dates to make long weekends, and if Lincoln's birthday fell on a weekend, we might extend it to Monday.  

I don't mind when everything is closed on a mid-week day: A nice breather, breaking the week into two short pieces. [Not really everything, just the holiday things like schools, banks, and government buildings.]  I can justify running personal errands mid-day, rather than real work.

I used to like it when most of our deadlines were measured in calendar days.  Now, most that we deal with are measured by court days:  16, 9, 5, and 2 days court days before a hearing.  What a pain when you can't do it without a complicated computer program or a calendar.

Guess I'll get coffee, and go see what's open.  
February 11, 2009

Lawyer Ads, Freakonomics, and Unequal Information....

A friend sent me an e-mail in response to a post about misleading ads by lawyers.  Along with it was a link to a San Diego lawyer who brags on his website that he's the recipient of "a prestigious award."  I know the award, and there is no prestige associated with it - in fact, it's like a movie getting "four tomatoes;" you probably don't want to go see it, and you don't see it in the movie posters.

One premise of the best seller Freakonomics the disparity of information between experts and their customers makes it impossible for the latter to determine how to do the expert's job, how to know if the expert is making things up, or whether the expert truly has any expertise.  As a result, the expert gets paid a lot of money because he knows the secret information.  There is a huge information gap, resulting in the expert getting paid a lot for access.

This is changing rapidly as the world turns toward the Internet, where there is actual information you can use if you dig deeply enough, available free to everyone.  While I can't recommend that most clients use the Internet to do their divorces or other legal work, they can use it as a way of confirming what they are told or providing a list of questions to ask their attorney. 

There is still no substitute for the knowledge of the lawyer about how court's work, what particular judges do, how certain opponents approach their cases, and the nuances of the law.  But there are many websites providing limited information on calculating guideline support [assuming you know what to input into the program], and case law is available from many sources.  You just need to be careful applying what you read, because the facts of your case may be different from those of your friend, or from the examples you find online.  And, there are wide variances from state to state, and even from county to county.

It is impossible in a blog to discuss where and when you should seek out a lawyer, but I can state from experience in representing lawyers and their spouses in divorce cases that even lawyers who practice in other fields don't understand family law when they read it.

Now, back to the ad.  The award is named after a California Code section, and is given periodically by a local association.  Sounds impressive, until you read the code section itself:

Continue reading "Lawyer Ads, Freakonomics, and Unequal Information...." »

February 10, 2009

A Day in the Life... [You call this living?]

Today was a typical, marginally productive day in my life as a family law lawyer.

Woke up, drank coffee, toasted whole grain bread, drizzle with olive oil, shave and shower.  Seeing a new client in the morning, and court in the afternoon, so pick a nice shirt with matching tie.  Off to the office - arrive a little late, around 9:00.

Review messages from yesterday, give some instructions, check e-mail.  Not much of interest - people arguing over nothing.  Found out my receptionist's cold is worse than before - reach for the Purell frequently.

Interview new client - unfortunately, typical problems.  Her divorce was over 3 years ago, and she's still trying to get the final paperwork finished up.  She needs orders signed dividing pensions and IRA's, getting her husband to sign a deed for a property awarded to her, getting her the money he was to pay to equalize the division, they type of problem that reasonable people should have been able to settle.  He won't agree to anything.  Typical problems.

Then, the wrinkle:  Husband wants to set aside a 3 year old judgment claiming he paid too much for a piece of real estate in the division of assets - like everyone on that side of the deal, it looks worse 3 years later.  His motion is so convoluted that it's hard to figure out what legal theory he is advancing.  He is just trying to create problems for his ex-wife, for no good reason other than that he can.  The kind of motion I hate to see because it's make work, caused by an attorney who is an idiot, doing what her idiot client wants.  It is so much more interesting to deal with a legitimate, factual or intellectual dispute.

Well, at least it has some challenge for me, because the case is in front of a judge with absolutely no background in family law.  He's been in the department about 38 minutes, and all my friends are afraid to take their cases in there - as a result, no one knows what to expect.  All I know is that I have to explain a lot more to him, than I would have had to explain to the last guy - that means a lot of extra time organizing, research, and drafting.  Because I have to approach him as though he knows nothing, the client will have to pay for extra effort in preparing the paperwork - you want the judge to be able to track the issues without being confused, in the hope he'll be on your side before the hearing starts.

About 3 hours after I started, I'd been retained, started my research, and outlined my approach, and dictated the start of my client's declaration and points and authorities - a good jump on the hearing.  Letter to husband's lawyer - she served the wrong person, so she needs to agree to continue the hearing [she will probably refuse because "my client wants to get it over with", so the judge will do it for her - another useless hour in court, however].

Then an hour doing the normal letter writing, and e-mailing.  There is a letter from a lawyer demanding I provide him with legal authority for my position - dictate a response that his client has fiduciary duties, and if she doesn't exercise them it will be a lot worse for her.  That's "my authority."  I've got a big gun in the law for people who won't produce documents or information, and I'm not afraid to use it.

A long letter from a real estate broker about all the efforts she's used to sell a house under a court order - husband refuses to sign the listing agreement despite a court order, and claims the broker hasn't done anything to sell the property - letter from his lawyer, critical of the broker for not aggressively marketing the property.  Type a response:  "What the heck do you expect her to do, she didn't have a listing agreement signed by the guy." 

A couple more letters, a few e-mails.  There is a recurring theme:  All these things could have been worked out by reasonable people trying to solve a problem.

Finally, off to court, stopping for lunch on the run, for a 3:00 p.m. hearing.  The traffic was horrible mid-day, for no apparent reason.  

At least while I was waiting, I got to watch an inexperience lawyer wiggle around trying to explain why he should be allowed to get off a case because he wasn't getting paid and couldn't communicate with his client - a Marine, possibly in Iraq.  The judge tried to explain that she couldn't let him off the case because of the servicemen's protection act designed to protect clients who can't be in court because of active military duty.  She explained he's entitled to a lawyer, or the court can't grant an order against him - to her, that meant she couldn't grant the attorney's motion to get out of the case.  The judge told the lawyer he had to stay in the case - at that point, the Marine walked in, and the case proceeded - my interest in the outcome flagged at that point, I was only interested in watching the lawyer twist in the wind, making arguments that made no sense trying to get free of the non-paying client he'd agreed to help.

After reading my file, outlining my argument, and sitting there for an hour, the judge decided she won't have time to hear the case today.  "Would you be able to come back Friday afternoon?"  You can imagine how I wanted to answer that one, but I agreed to come back [I had a case that day fold up.  The husband on the other side is self represented, calling in on a cell phone from the east coast, so he could go on to his 2nd martini at 6:30 EST.  

At the freeway on ramp, the lights control access.  They allow two cars to proceed at a time.  No one ahead of me could count, so only one car went forward at a time, as light after light changed. Sort of like being in court behind a bunch of self represented people.  Back into heavy rush hour traffic.  A total of 2 hours devoted to a hearing that didn't come off.

Back in the office, I was very tired, so I did a little routine paperwork, a few e-mails back and forth with a nervous client, corresponding with another experienced family law lawyer to get his input into a case.  Went home.  My wife was shocked: It was only 6:00 and I was already home....

As boring as this was, remember that I've left out the really boring stuff because it was too insignificant to remember.
February 8, 2009

The Old Days of California Divorce When Fault Was the Game...

Today I was reminded of the earliest days of my practice, by a blog of a South Carolina lawyer:

"South Carolina has five grounds for obtaining a divorce. These are adultery, physical cruelty, habitual drunkenness, abandonment and one year separation, which is commonly referred to a no-fault divorce." 

Although I never handled a divorce under the law before no fault, I remember sitting in the presiding department years ago, waiting for my case to be assigned out for trial.  In those days the presiding judge heard "default divorces," those where only one side appeared.  To the witness stand paraded a woman followed by her "witness." Their job was to testify about the husband's adultery.  The wife then asked the court to adopt a marital settlement agreement the parties had signed.  

I had studied family law in law school, but this was a surprising reality.  Unless the wife and a witness presented evidence of fault, the parties couldn't get a divorce.  The parties often negotiated who would take the blame and the other would go to court to tell a story, true or false, bringing along a willing friend.

California didn't have a separation provision for no fault divorces in those days, but as I recall abandonment was considered "fault", to justify the granting of a divorce to the abandoned party.

When the judge found fault, assets could be divided unequally.  Imagine how important it was to prove you were the wronged party in the breakup.  This caused many legal battles over who was to blame for the breakup, fighting over the nastiest of personal business.

While the decision to eliminate fault as a basis for divorce has been criticized as leading to the breakup of marriages, the alternative results in trials over who is to blame for the failure of marriages.  One side says "abandonment" and the other claims "mental cruelty" and the judge never knows the reality.

Having spent 3 decades practicing in a no-fault state, it is clear that courts are not a good place to decide whom to blame for marital breakups.  And we certainly do not need to return to the days when dirty linen was brought up to gain an advantage in the division of property - we have enough with the remaining issues.
February 7, 2009

Advertising and the "Rancho Santa Fe" Divorce...[or Del Mar, etc.]

Elsewhere, I've written about the "ambiguity" of advertising by lawyers, making themselves seem bigger than life, experts at everything, and the best there is.  This devolves from court decisions that lawyers should be able to advertise just like every other business.  It rarely has helped get information out to the public - often it is merely a way to generate business to be handled by inexperienced lawyers.

In a local newspaper last week in a community where I have an office, I found an ad for an attorney who bragged about how good he is at handling big asset divorces.  The community is filled with wealthy families, with multimillion dollar homes - the kind of market from which big divorces come.  The first thing I noticed was the name:  In 30 years of practicing family law, often in court daily, I'd never heard of the man.  Next, the fact that he "offices" in each of the 3 wealthiest neighborhoods [all within 10 miles of one another].

So I looked further to see who he was.  It was almost comical.  The "main office" was a house near the beach.  The office labeled in my community was actually 5 miles away, the address of a business attorney I don't know - I didn't check out the others, but assumed he has agreements to use a conference room wherever he can find a client.  

Then I assumed these are ways a lawyer from somewhere else in California who is moving here to retire might seek a few cases - but it surprised me that the lawyer specifically limited the practice to divorces.  Yet, he wasn't a certified specialist in family law.  So I looked further.  Where's the lawyer's real office:  A large city in the mid-West, according to what he lists with the State Bar of California. 

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February 6, 2009

Grounds for Divorce....

Kind of off topic, but if you are a fan of coffee [I am], and a fan of Santa Fe, New Mexico [I am], here's a blog that discusses both, together with the problem of making a good cup at home in high altitude:

February 5, 2009

Travails of a San Diego Divorce Lawyer - Government Inaction....

Now, I'm not one to complain that government never works.  The main problems with government are a failure to do its business in the light of day, and the creeping bureaucracy that causes more and more rules to be developed to solve every conceiveable problem and protect them from every idiot member of the entity or the public.  GM, IBM, Microsoft, are no different and not much better, even when they are able to turn a profit - it's just a function of size. [Sorry, but free market capitalism doesn't result in efficiency, it just results in profits - these are not the same thing]

That said, my current gripe is with the local County Recorder's Office.  You know those deeds to your property that get recorded to show the world you own it?  Well, in most jurisdictions these are done on forms, and in the upper right hand corner there is a blank box where the recorder puts his stamp showing where it was recorded in the county's records, for all posterity to read.

In our county, they want a big, blank box in that space - usually larger than the space on forms used by title companies, escrow companies and lawyers, forcing customers to attach a cover sheet [and pay an extra $3] to give the recorder enough room for the stamp [presumably so they don't have to take aim, but can just whack away].

In one of our divorce cases, we tried to record a deed that didn't quite meet the 2 1/2" by 5" standard - our form's box was only 2 3/8" by 4 3/4", but my paralegal figured it was "close enough for government work" and why pay the extra 3 bucks.  Needless to say, it bounced - the recorder was kind enough to include a sample cover sheet for us to use when they returned the deed, unrecorded.  The box on that form was 2 3/4" tall [OK, so far], but only 4 1/2" wide - 1/2" shy of their own requirement.  Go figure.

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February 4, 2009

San Diego Divorce Makes National News....

When does a local family law case become national news?  When the AP reports that a baseball team is being sold as part of the divorce.  In this case, according to the AP yesterday,  "The sale, precipitated by Moores' difficult divorce from his wife, Becky, is expected to close by opening day..."  

The asset?  Majority interest in the San Diego Padres.  

Even the rich often give up their toys when their marriages dissolve.  
February 3, 2009

Deferred Income Can Be Used to Set Support in Divorce..

In a recent appellate decision, it was held that a parent's deferred income can be used to calculate his or her support obligation.  In the case of In re Marriage of Berger, the husband had left a partnership with a very high salary to serve as CEO of a landscaping business in which he received equity. H's initial salary was set at about 1/3rd what he had earned in the prior job.

The new business never did well, and didn't generate a profit.  After separation, the husband agreed that he would take a very low salary, deferring a large amount that would be converted to an ownership interest in the company.  His deferred salary totaled $350,000.  He was meeting his current expenses with substantial assets he owned, and wasn't living a monastic life.

The husband then sought to reduce his support.  In court he argued support should be set based only on the amount he received monthly, ignoring the potential from the deferred amount.  [It probably didn't help his position that he'd borrowed almost $2 million to buy a lot in Laguna and build a house, or that he'd claimed $65,000 per month of income on his loan application, but those are not necessarily factors on which support would be calculated]  

The trial judge found he had an earning capacity of 4.5% of his assets, and $2000 per month in salary, cut his child support substantially and reduced his spousal support to zero.  Wife didn't like the outcome, so she appealed.

The court of appeal agreed with her, in part:  Deferred income must be considered as income available for support.  The children are entitled to share in their father's lifestyle - the issue is what to use to determine an earning capacity. 

The outcome was a missed blessing in reaching the right result.  It approved of the trial court's refusal to impute income to the Husband, because Wife had presented no evidence of his current earning ability or his ability to return to his prior job. Merely establishing what he used to earn was held insufficient.  It also approved the trial judge's refusal to consider his loan application in setting income, as being within the judge's discretion.

Although the Court understood the husband's situation, it was still no reason to grant him a "holiday" from paying support.  His decision to defer his salary was "voluntary".  He could have achieved the same result by taking his full salary and then making a monthly investment in the company from his capital.  By deferring his income, he was investing in the company with the expectation that if its fortunes later improved, he would be compensated with additional equity.  Of course, by deferring salary, he achieved the side-benefits of a low taxable income and a reduced support obligation, making those funds available to support himself or invest in the company. 

Since he had voluntarily agreed to divest himself of his earnings, there was no need to "impute" anything to him in the way of income.  His voluntarily deferred salary had to be considered as income available for support.  He could not unilaterally arrange his business affairs in such a way as to effectively preclude his children from sharing the benefits of his current standard of living.

The appellate court also held that his assets could constitute "special circumstances" justifying departure from guidelines:  1) income may be attributed to them; and 2) they may be a a reason to depart from guideline, something rarely done.  Because he was had a lot of assets, he was able to defer his salary.  Had he not had substantial assets, he would have had to either receive his salary or seek another job.  To accept his argument would be "be tantamount to permitting [him] to avoid paying support because he is wealthy."  He was obligated to pay child support consistent with his own standard of living.

The appellate court sent the matter back to the trial court to re-calculate support based on its ruling.

If you have any issues like these, consult a certified specialist in family law.
February 1, 2009

Divorce and the Hourly Rate, a San Diego Lawyer's Perspective...

In a prior post, I wrote about a New York Times' article on the problems of lawyers charging hourly rates.  At the end, I said the hourly rate is a legitimate basis for a lawyer's time in divorce and other family law matters, and generally there isn't another good choice.

In these cases, no one can predict how difficult the case or parties will be.  Emotions often drive the litigants, and no matter what happens in their case it will result in a big change in their lives so there is an incentive to fight.  The lawyer often has no control over how difficult the case will be, and there are no limits to the amount of work that would be required.  Under the best of circumstances, the lawyer can usually not predict how much work will be involved.   In some types of legal work, taking a case on contingency changes the equation.  However, [at least in most states] a lawyer can't take on a divorce case for a percentage of the outcome he gets for his client.

No matter how good the lawyer, he cannot predict how much time it will take to handle almost any family law case, whether custody, division of property, modifying support, collection, etc.

Maybe a lawyer can charge a flat fee for handling a default divorce where everyone is in agreement.  But what happens if one party to the agreement decides to change his or her mind, repeatedly - what if you can't get their cooperation to produce the documents required - what if the court wants the lawyers to keep coming in and explaining why the case is taking so long to resolve?  How can the lawyer work for other clients when dealing with these problems on a few cases for which he can't charge for the extra time?  Is it fair to the lawyer?

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