January 2012 Archives

January 26, 2012

California Divorce Report: Russell Brand's Unique Wedding Gift to Katy Perry Never Left India

1343743_51706269_01302012.jpgYet another Hollywood love story is coming to an end with the news last month that comedian Russell Brand filed for divorce from singer Katy Perry. The couple had gotten married just over a year earlier, in a traditional Hindu ceremony in Rajasthan, India on October 23, 2010. Brand filed for divorce on December 30, 2011, citing irreconcilable differences.

The news of their split first brought on speculation about the division of property, since Brand reportedly refused to sign a prenuptial agreement. With no prenup, they could end up with a straight 50/50 split of the marital estate. Perry likely has the bigger fortune of the two, meaning that Brand may end up collecting a large share of her assets, something of a reversal of the stereotypical situation in high-profile divorces. She reportedly made about $45 million during their fourteen months of marriage from touring and endorsements. Brand, meanwhile, made somewhere between $6 million and $8 million during that time. This is no small sum, but it pales by comparison. They also own a Los Angeles mansion valued at around $6.5 million.

Their split has brought up an interesting question not often seen in California divorces--at least, not in California divorces outside of Hollywood. Reports from their wedding indicated that Brand gave Perry an unusual gift, a female Bengal tiger named Machli who lived at Ranthambhore National Park, where they held their wedding. In the realm of extravagant wedding gifts, Machli is perhaps among the most unusual. This led some to wonder what would become of Machli in the divorce proceeding.

According to The Today Show, the couple never actually brought the tiger back to California. Instead, it remained in its habitat at the national park in India, which is partly a tiger preserve. The money Brand "paid" for Machli would go towards her care and conservation plans at the national park. Divorces occasionally bring up complicated questions about ownership or custody of pets, and those disputes can be as contentious as custody battles over children. In this case, however, the gift of the tiger was more symbolic than anything else. Since the tiger is not present in California, and it is unlikely that Brand or Perry ever obtained anything like legal title, it probably will not be part of any property division.

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January 19, 2012

San Diego Court Places Limits on Parents' Duty to Disclose Financial Changes

896161_71592802_01252012.jpgThe California Fourth District Court of Appeals in San Diego ruled earlier this month that a parent or spouse's obligation under the Family Code to disclose changes in financial status to the other party does not extend past the date a court enters a final judgment. The court reversed the trial court's order imposing sanctions against an obligor ex-husband and father, which were based in part on a failure to disclose certain financial changes after a divorce decree was granted.

This case could have a significant impact on how California parents handle child support issues after entry of a decree, and it will be important for parents who have child support orders, both as obligor and obligee. An obligee, who receives payments from the other parent, has an interest in knowing if that parent is not paying the full amount of which they are capable.

The parties in this case have three children. All of the children were minors when the mother filed for divorce from the father in Wyoming in 2003. A Wyoming court granted the divorce in 2003. The wife and children relocated to San Diego, and a California court confirmed the decree in 2005. At the time of the divorce, the father declared an annual income of $800,000 and agreed to pay $8,500 per month in child support. The child support amount would reduce to $4,000 per month when only one child remained a minor. The father also agreed to pay monthly spousal maintenance of $12,000 for a ten-year period.

The mother brought an action in San Diego in 2007 to modify and enforce support. She requested an increase in the child support amount, enforcement of arrears on spousal maintenance, and court costs. Her financial declaration to the court indicated that she had a net worth at the time of $14 million and monthly expenses of over $40,000. The father's financial declaration showed significant changes from the time of the divorce. He had sold his business, his monthly income was less than $11,000, and he claimed to have $60,000 per month in expenses. He had earned $3 million from his business in 2006, which he had not disclosed to the mother. He had also brought in over $100 million in 2007 from the sale of the business, but later ventures had not been successful.

The mother asked for sanctions against the father for failing to disclose these sources of income. The trial court agreed, finding that he had "unnecessarily prolonged litigation" and breached his fiduciary duty. It increased his child support to $18,000 per month and ordered him to pay attorney fees and sanctions. The father appealed some of the trial court's holdings.

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January 12, 2012

Northern California County Pushes for Overdue Child Support

1245686_18345493_01202012.jpgContra Costa County is in the process of clearing some of its old cases, and parents with an overdue child support balance may be in for a shock. The county has reportedly changed its computer systems four times in the past decade, and in the course of doing so failed to charge interest to some parents in arrears. Now it is adding interest to overdue balances on its books, including ones where previous audits indicated that no interest was due.

According to the Contra Costa Times, a glitch in the county's original software, installed in 1983, lacked the ability to calculate interest. An upgrade in 1998 included an interest-compounding function, but staffers at the Child Support Services Department were legally required to individually audit each case before applying interest charges. With a backlog at the time of over 70,000 cases, the county could not keep up with such audits. A statewide computer system to track child support payments took over individual county systems in 2008, but cases from before the 1998 upgrade in Contra Costa County still may not have interest applied to unpaid amounts. The Department estimates that about 1,000 cases remain from that period, and that it will need six months to audit them all.

A serious problem with many of these cases is that it will unexpectedly hit parents with an enormous bill that they almost certainly cannot pay. Although California law clearly permits the county to charge interest on overdue payments, the fact remains that substantial time had gone by with no notice to the obligor parents. The Times quotes one parent, now on Social Security disability, whose total overdue balance went overnight from $1,842 to $55,806 once interest was applied. The man states that the missed payments occurred between 1991, when he could no longer work due to health issues, and 1999, when the state began taking payments from his disability checks. The state never notified him of accrued interest on his missed payments during that time, although some bills noted that the balance "may not include accrued interest." His two children, the nominal beneficiaries of his payments, are now in their 30's, and his ex-wife continues to collect the payments.

The other side of the argument, of course, is that the obligee parent presumably had custody of the children and paid for their care the whole time the other parent's debt accrued. From the standpoint of that parent and the children, generally speaking, they simply were not receiving money to which they had both a need and a legal right. Just about any other debt includes interest penalties when it goes unpaid, so a lack of notice from the state may not be such a great excuse.

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January 5, 2012

New California Laws for 2012 Include "Gay Divorce Bill"

975584_27295398_01052012.jpgWith the start of a new year, new laws go into effect around the country. Most are unremarkable, but every so often something interesting happens. Passage of the Domestic Partnership Equality Act (DPEA), known colloquially as the "Gay Divorce Bill," in California is a major event in the ongoing debate over same-sex marriage. With states adopting different laws relating to same-sex marriage, and the federal government still largely bound by the Defense of Marriage Act (DOMA) passed in 1996, same-sex couples have encountered unexpected difficulties if they move from one state to another.

California officially does not recognize same-sex "marriage" since the passage of Proposition 8 in 2008, which amended the state constitution to define "marriage" as a union of a man and woman. It did not affect same-sex marriages performed before November 5, 2008, and California's system of "domestic partnerships" remains in place. "Domestic partnerships" grant a couple the same rights and benefits as marriage within the state, but with some differences. It does not include any of the benefits available to married couples under federal law. Under DOMA, other states do not have to recognize California domestic partnerships. A series of lawsuits have challenged Proposition 8, and a federal judge ordered it overturned in 2010 but stayed enforcement of the order. An appeal is still pending.

The DPEA eliminates a number of differences between "marriage" and "domestic partnership." For example, state law requires that a couple live together for a specified period of time before they may legally enter into a domestic partnership, but couples wishing to marry have no such requirement. An unmarried opposite-sex couple that lives together may obtain a confidential marriage license, but a same-sex couple cannot. The DPEA changes both of these laws to make "marriage" and "domestic partnership" more equal.

Perhaps most significant is how the DPEA deals with divorce among same-sex couples. Existing Calfornia law required at least one spouse to have resided in the state for at least six months in order to file a petition for divorce. This excludes people who have moved away from the state, and it leaves some same-sex couples in a bind if they have moved to a state that does not recognize any sort of same-sex union. Those states have refused to grant divorces to same-sex couples, since they contend the marriage or partnership never legally existed in the first place. The DPEA allows California courts to grant a dissolution of a domestic partnership if they entered into the partnership in California and now reside in states that refuse to dissolve the union.

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