California Marital Settlements: August 1999 Summary

Legal Developments

Equalizing Payments

Where real property is used as security for a promissory note for an equalizing payment, the creditor spouse's use of nonjudicial foreclosure will bar collection of the balance due on the note. IRMO Oropallo (1998) 68 Cal.App.4th 997.

Selling property to raise funds for the equalizing payment results in recognition of any gain on the property sold. Ingham v. United States (9th Cir. 1999) 167 F.3d 1240.

Stock Options

The discussions on dividing stock options have been revised and updated. Citations to new Resources have been added, including a discussion of SEC rule amendments, effective April 1999, which may facilitate the transfer of stock options between spouses in connection with a marital dissolution.

Retention of Jurisdiction over Retirement Benefits

Retention of jurisdiction over the division of military retirement benefits allowed the court to devise a remedy for the non-military spouse when the retiree voluntarily traded in his retirement pay for disability pay. IRMO Krempin (1999) 70 Cal.App.4th 1008.

Fiduciary Duty re Sale of Marital Residence

The in-spouse's failure to sell the marital residence expeditiously was a breach of fiduciary duty requiring an award of attorney's fees to the other spouse in a proceeding to enforce the order to sell the home. IRMO Hokanson (1998) 68 Cal.App.4th 987.

Spousal and Child Support

In a recent Ohio case, Murray v. Murray (1999 WL 55673), the court awarded a significant increase in child support based on an unrealized increase in the value of the payor spouse's stock options.

In IRMO Schaffer (1999) 69 Cal.App.4th 801, the court held that in determining whether changed circumstances justify modifying spousal support, the court may look at the supported spouse's actions since the end of the marriage, not just since the last prior support order.

Custody

In Kibbee v. Blue Ridge Insurance Co. (1999) 69 Cal.App.4th 53, the court held that whether or not a child of divorced parents is a "resident" of the non-primary parent's household for insurance policy exclusion purposes depends on the facts and circumstances of the case.

The discussion of joint physical custody suggests that the parties consider providing from the outset for appropriate changes in the custody sharing arrangements as the children mature, in order to avoid the need for later modification motions which may raise burden of proof issues currently under consideration by the California Supreme Court in IRMO Congdon (S077916, review granted May 26, 1999; see Court of Appeal opinion at 71 Cal.App.4th 1335, 84 Cal.Rptr.2d 700).