Strategies for Family Law in California Leading Lawyers on Understanding Developments in California Family Law

Transcription

1 I N S I D E T H E M I N D S Strategies for Family Law in California Leading Lawyers on Understanding Developments in California Family Law 2012 EDITION

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3 Is That a Light at the End of the Tunnel or an Oncoming Train? Serving Family Law Clients in Today s Environment Daniel Gold Managing Partner Tredway Lumsdaine & Doyle LLP

4 By Daniel Gold Introduction The thrust of this chapter is not the 2008 Great Recession, but how the practice has fared, and will continue to fare, in spite of the economy. Legislative changes and topical social issues aside, practicing law in this area is really about people. The great lesson for lawyers is that people s problems cannot always be solved by relying on what your professors told you. Elkins and its Impact on California Family Court Proceedings Perhaps the biggest change in the California family law system in the last couple of years has been the adoption of changes to the California Family Code and Rules of Court precipitated by the Elkins case 1. Simply put, Elkins asserts that all parties in a family law matter are entitled to their day in court. Even with these recent revisions, however, the courts have still been given a lot of leeway in terms of how to conduct a typical family law hearing. For example, judges now have the discretion to allow live testimony in court proceedings, including pre-trial orders to show cause (OSC). For many years, family law courts in many counties had been moving away from having evidentiary hearings where the litigants and parties would take the stand and offer live testimony. Instead, courts looked for ways to tighten up the proceedings. Under Reifler v. Superior Court 2 courts could have discretion on initial OSC hearings to make findings and conclusions solely from written declarations. This allowed for judges, if their time allowed, to pre-read the files, and be able in some, but not all, hearings, to come out with tentative findings, and hear brief oral arguments from the litigants and/or their lawyers. While some judges and lawyers value this process for its encouraging shorter matters, many felt it did not allow for everyone to feel they had, in fact, been heard. A decade after Reifler, came Marriage of Stevenot 3 which opened the process up a bit to permit judges to hear offers of proof from each party on facts that may not have found their way into the declarations. Even with these 1 Elkins v. Superior Court (Elkins), 41 Cal.4th 1337 (Cal. 2007). 2 Reifler v. Superior Court (Reifler), 39 Cal.App.3d 479 (Cal. 1974). 3 In re Marriage of Stevenot, 154 Cal.App.3d 1051 (Cal. 1984).

5 Is That a Light at the End of the Tunnel or an Oncoming Train? discretionary edicts from the appellate court, it was always generally that trials were trials, and that absent the parties stipulation, the courts were bound to consider live testimony. Elkins was a creature of a Superior Court in California that decided to adopt a local rule that required the litigants to put all evidence before the court at trial via written declaration, and prohibiting, except in unusual circumstances, one party from cross-examining the other about the contents of those declarations. The rules were intended for judicial economy, but in reality, the rules favored parties with attorneys who understood how to work with these rules and violated parties due process by cutting off the parties from presenting all relevant, competent evidence on material issues. On appeal, the Supreme Court was very clear that issues in family law cases that turned on the witness's credibility should not and could not be decided on declaration. In the wake of Elkins, and the Elkins task force recommendations, the California Family Code and California Rules of Court 4 have been modified to reflect and address the Supreme Court s concerns. The presumed impact would be that more hearings, including OSCs that will feature live testimony rather than the law and motion type hearings that had evolved in many counties after Reifler and Stevenot. At this time, most family law attorneys are still unsure as to what impact these modifications are going to have on the family law practice. It may increase court docket congestion because more people will have full hearings. On the other hand, it could decrease court congestion, because people will find that the court calendar congestion may delay their matter, and consequently, they may be more likely to settle cases out of court. Therefore, it is hard to say what the effect on the volume of family law cases will be because of Elkins. Personally, I do not foresee a tremendous difference in terms of the amount of filings with the court; rather, much will depend on who can afford to hire competent family law attorneys if court hearings become more protracted. 4 FAMILY CODE 217; CAL. RULES OF COURT and

6 By Daniel Gold With the change in how proceedings are conducted, the three best (by no means all) practice pointers are: 1. Meet and confer with counsel on how evidence will be handled. The more stipulations the better. 2. Ensure that all evidence is served and provided to the court so there are no surprises for anyone and 3. Give accurate time estimates for the matter to ensure the matter is heard, while at the same time ensuring there will not be a mistrial. Continuing Impact of the Economy The real estate market is still flat because of the ongoing economic crisis. Many family law parties, regardless of economic strata, have little or no equity in their real estate. Typically, the parties in family law cases have used real estate to finance their legal fees; but consequently if clients do not have equity in their real estate, their lawyers may not get paid. The clients may have to find other means like retirement, investments, and other unsecured debts (i.e., credit cards) to pay their attorneys. Therefore, the economic crisis has, in many cases, severely affected the business end of the practice. The economy has also had some impact on child and spousal support cases, particularly when one of the parties has lost their job due to layoffs or restructuring. In such cases, we are dealing with a client who has every intention to pay support, but simply cannot afford to do so. The best practice pointer is to file for an order to show cause for modification as soon as the client knows their job is lost or in jeopardy because the court only has jurisdiction to retroactively modify the order to the date the job terminates or the date the OSC is filed, whichever is later. Being proactive in modification proceedings will minimize the client s exposure to arrearages. Same-Sex Relationships and the Gay Marriage Island After the California Supreme Court struck down a previous gay marriage ban, there was a brief time window in summer-fall 2008 that gay couples took advantage of and got married. Despite the passage of Proposition 8, the court determined that those couples remained married for all intents

7 Is That a Light at the End of the Tunnel or an Oncoming Train? and purposes, existing on a legal island while carrying none of the legal rights of heterosexual married persons. As they are not domestic partners, however, it is unclear how these marriages would be handled by the family law court, if at all. My own observation is that one could make an argument that it is a Marvin 5 case (implied contract), a civil partition action (if joint property), or treat it as a putative spouse claim, since the marriages were conducted during a period that the parties reasonably believed that they could be legally married. Despite all of the focus to the constitutionality of Proposition 8, I personally have not observed a marked difference in day to day family law practice. Domestic partnership dissolutions have been in the California family law courts for the past several years. In my own practice, I deal with domestic partnerships, and for the most part, we treat them like marriages in court. Issues related to domestic partnerships are going to continue to be a part of family law litigation until there is a definitive ruling on gay marriage. If the gay marriage law is ultimately upheld and allowed to remain in effect in California, it is my opinion that many, if not most, same-sex couples will decide to get married, rather than forming domestic partnerships. A Clearer Picture for California Premarital Agreements In 2011, the California appellate courts clarified some ambiguities in enforcement of pre-marital agreements that had arisen over the past decade. Marriage of Bonds 6 Baseball player Barry Bonds married his ex-wife (Sun) in 1988 well before he had become an all-star. Before they were married, Bonds asked her to execute an agreement that waived her interest in his earnings and acquisitions during the marriage. Sun signed the agreement without an attorney, while Bonds was represented by an attorney, and had sought counsel from his agent. The parties were divorced six years later. At that point, Bonds salary was higher than when the prenuptial agreement was 5 Marvin v. Marvin, 18 Cal.3d 660 (Cal. 1976). 6 In re Marriage of Bonds, 24 Cal 4th 1 (Cal. 2000).

8 By Daniel Gold signed. Sun requested that the prenuptial agreement be ruled invalid because she did not have a lawyer present at the time she signed the agreement. The California Court of Appeal determined the prenuptial agreement was invalid. This ruling was appealed all the way up to the California Supreme Court, which found, to the contrary, that the prenuptial agreement was valid. In response to the Bonds holding, the California legislature amended its version of the Uniform Premarital Agreement Act 7. That amendment provided very strict guidelines that essentially made it more imperative parties on both sides of the transaction be represented by their own lawyers. Marriage of Hill and Dittmer 8 Since the revisions to the Code, there has been an open question whether agreements drafted prior to 2001 should be deemed invalid. Finally, late last year, one appellate case, In re Marriage of Hill and Dittmer, ruled that the guidelines enacted post-bonds were not retroactive to the period prior to the time the Code was amended. This case involved an atypical scenario, in that both parties were sophisticated business people with considerable wealth coming into their marriage, which ended after seven years. This clarification was much needed, because many practitioners feared that pre-marital agreements that had been drafted under the old, looser guidelines would have to be redone or modified to reflect the legislative amendments. This might prove challenging if not impossible, since either spouse might reconsider entering into a new agreement. Marriage of Caldwell-Faso v. Faso 9 Under California law, for a pre-marital agreement to be considered valid it must be signed no earlier than seven days after it has been presented to the party against whom the agreement is being enforced, and that party had been advised to seek independent counsel 10. In practice, this was difficult 7 CAL. FAMILY CODE 1600 et. seq. 8 Marriage of Hill and Dittmer, 202 Cal.App.4th 1046 (Cal. 2011). 9 Marriage of Caldwell-Faso v. Faso 10 CAL. FAMILY CODE 1615(c)(2).

9 Is That a Light at the End of the Tunnel or an Oncoming Train? because in many situations, couples wait until only a few weeks before the ceremony to address these issues, and in preparing the agreement, multiple drafts are done. A question arose whether there had to be seven days between the presentation of subsequent drafts and execution. In Caldwell- Faso, the appellate court held that once the initial draft is presented, if the parties continue to negotiate, subsequent drafts of the agreement will not be subject to the seven-day rule; i.e., a subsequent draft can be executed less than seven days after it was presented. The case also suggested that the seven-day waiting period was intended only for parties who were unrepresented when the agreement is presented. Once the party obtains counsel, the opinion suggests that the waiting period does not apply. Kids in the Courtroom Custody litigation can be very traumatic for parents and children going through a marital breakup. At one speaking engagement a few years ago, an audience member recounted that she still had nightmares some thirty years later about testifying in open court against her father in a custody battle. Over the past two decades, courts have made tremendous strides to keep children away from the courtroom where parental influence can not only traumatize the child, but also hamper the court s ability to obtain accurate facts. As an alternative, the court would appoint mental health professionals to interview the parents and children to help fashion an appropriate parenting plan for the court to adopt. While effective in both theory and practice, some situations required the court to talk to the children (e.g., domestic violence allegations). This year, California Family Code Section has been amended to apply the presumption that children are capable of testifying if they are fourteen years of age or older, unless the court finds good cause not to permit the testimony. Under these modified rules, a judge now has significantly more discretion to control how children s testimony will take place. In most cases, testimony by a child of any age will still most likely happen outside of a courtroom. What the new rule does now do is give counsel some clear guidelines to advise our clients whether their children are going to be called into court. 11 CAL. FAMILY CODE 3042(c)-(i) (effective Jan. 1, 2012).

10 By Daniel Gold The Role of the Client and the Attorney in Developing a Family Law Strategy The client is your employer; therefore, it makes sense for the client to be actively involved in their case. They provide information that enables you to have some level of understanding of what they want you to achieve on their behalf. The client of a family law attorney is to provide order, clarity, and closure elements that are missing in most family law matters. Divorce is usually a chaotic and troubled time in the client s life. Therefore, while the client must be the driver of their divorce strategy, they may not be mentally or emotionally capable of making the decisions necessary to put themselves in a position to achieve a peaceful and certain outcome. Consequently, it is counsel s task to put the client at ease and help them feel confident that things will look brighter at the end of the tunnel. At the same time, the attorney is not a therapist, which is why counsel should always strongly persuade clients to get into some sort of therapy program. I always try to give the client practical advice: in fact, I believe that if you always take a law book approach to giving a client advice, you are not doing your job. A holistic approach to addressing a client s situation is usually best. Even more important is timely responsiveness, which is critical to assuring the client that their counsel cares. The client needs to know that they have an advocate and a counselor who keeps their interests at the forefront of their mind and is focused on getting them the best resolution possible You re Paying Him Spousal Support? Perhaps the most interesting trend in this area a trend that has been developing over the past two decades is that more women are now expected to pay spousal support to their male spouse. The equitable concept of spousal support evolved from English common law at a time when women did not generally own property. When a marriage was over, the court could equalize the position of the parties by making the betterpositioned male spouse pay the female spouse a certain monetary sum from their assets. As women increasingly achieved higher degrees, developed a greater presence in the job force, and the advent of community property laws (derived from Spanish law) that equalized the marital estate, things began to change. Now, many women have greater income or assets than

11 Is That a Light at the End of the Tunnel or an Oncoming Train? their male spouse and consequently find themselves paying spousal support. In such cases, it is important that female clients understand that spousal support is a numbers situation: essentially, the law does not recognize one gender of being more capable of paying or receiving support than the other. Mistakes to Avoid in Family Law Cases In some family law cases I handle, the parties may have been divorced for many years, but circumstances change requiring the court to revisit the divorce decree to determine whether alimony or child support needs to be adjusted. When certain judgments/decrees are not written clearly or leave much to be interpreted, it is very difficult to address what the client needs or solve their problem. All too often, attorneys, and in some cases, judges, neglect detailing what the parties financial circumstances are at the time of the divorce. A case in point is one in which a spouse loses his or her job or his or her income goes down, resulting in the need to reduce spousal or child support payments. Without knowing what the income was when the divorce was made final (either at a contested trial or settlement), it is very difficult to prove whether the client has experienced a change in circumstances that would justify reducing support. In addition, many lawyers are not prepared to represent their clients in court or in depositions. For example, I was recently involved in a case where the opposing attorney was defending his client in a deposition, and a contested issue involved a post-marital agreement where his client had been represented by a prior lawyer in its negotiation. The deponent was the party challenging the agreement. It should have been obvious that questions would be directed to the deponent about conversations with the prior attorney, consequently raising the attorney-client privilege. Her current attorney, even with thirty-five years of experience, was not only unprepared for that line of questioning, he had no idea when to properly raise an objection to questions asked or properly instruct his client on how to answer the question. Because of that lack of preparation, any privileges from his client s relationship with their prior attorney were waived. Unfortunately, I see a lot of ill-prepared lawyers and ill-drafted documents in family law cases, and it costs clients a lot of time and money when the mistakes have to be fixed later on.

12 By Daniel Gold Continuing ADR Trends in Family Law There are several alternative dispute resolution (ADR) options in family law cases, which have continued to gain favor for parties seeking to reduce their fees in protracted court proceedings. One of these is collaborative law, a process in which the lawyers on both sides are laser focused on getting the case resolved outside of court. With respect to the collaborative law movement, I think that it is a worthwhile endeavor, but it can also be problematic. Lawyers who engage in the collaborative law process are required to terminate their client relationship if the parties cannot settle the matter and it goes to court. The collaborative model cynically assumes that lawyers who do not take part in collaborative law are only interested in ensuring that their client will wind up going to court so that they can generate more fees. The reality is that nothing could be further from the truth. If you have taken an oath and you have any ethical backbone, you are not going to take advantage of your client s case: you are going to do what is necessary to resolve the case in a cost-effective matter. Certainly, many attorneys enjoy advocacy for their clients, but if litigation is not in the client s best interest, counsel have a duty to ensure that the collaborative law process or some other form of ADR is in the arsenal of options to resolve the client s challenges. There has been an increasing use of mediators and private judges who are employed to sit down with the parties either with or without their lawyers in an attempt to resolve the case without litigation. There has also been a trend toward the use of private judges in family law hearings because of the congestion in the court dockets. Generally, it is often preferable to pay someone to be available to hear your case when you are ready to take action, than to wait for a court to be ready to hear your case. Ultimately, these private arbitrators give the parties more control over resolving their case, and it allows them more freedom to do so. Newly announced court cutbacks in California will only add to the increased uses of private judges. Consequently, I always counsel my clients at the outset that ADR is an option. However, I still believe that formal discovery is necessary, at least to some degree, prior to engaging in ADR. I believe that the client should be fully informed before going to ADR, as there are risks involved in entering into a settlement if the client does not understand all the facts. Formal

13 Is That a Light at the End of the Tunnel or an Oncoming Train? discovery compels a response that is under penalty of perjury. If a spouse is not forthcoming in discovery, sanctions can be issued under both the California Family Code and California Code of Civil Procedure. When Ugly Turns Violent Family law disputes can be emotionally volatile and ugly. It has been said that criminal defense lawyers represent bad people at their best, while family law attorneys represent good people at their worst. When disputes are resolved by the court in a way perceived as unfavorable to one spouse, that ugliness and volatility can turn violent. That violence is channeled against the parties who are seen as contributing to that negative result whether it is the other spouse, a lawyer, or a judge. There was a recent case in Orange County where a husband was in the middle of a custody battle, and he wound up shooting and killing his ex-wife and numerous innocent bystanders at the beauty salon where she worked. As a lawyer in this practice area, you can only hope you can foresee such situations and prevent them from happening. Unfortunately, if you are representing an abusive client, you cannot monitor them 24/7, or tell them what to do when they are not in your office. You can only set guidelines in terms of making it clear that if they continue to engage in that kind of behavior you are going to terminate the relationship. Best Practices for Achieving a Successful Outcome To succeed in this practice area, I think that you have to do as much case preparation as possible when you are first retained, and organize your case as if you are going to trial. If you do not know what strategies will or will not work, and if you do not know how the case is going to fare in front of a judge, you are not going to be in a position to advise the client on settlement. My definition of success in a family law case is if I feel that the client has gotten the best result possible under the circumstances. Typically, if the outcome of the case involves certain elements that both sides do not like, that is when you know that you have achieved the best possible solution.

14 By Daniel Gold Conclusion Most of the upcoming changes in this practice area are likely to be based, in some degree, on the state of the economy and the ability of the courts to handle these matters. Looking ahead, I think that lawyers will have to be more creative in terms of how they approach cases, and how they interact with clients. If a case is likely to involve multiple court appearances it will involve considerable financial costs, and the parties and their lawyers have to be mindful of that fact. Similarly, the client needs to understand that their lawyer does not control how quickly the court will hear their case. As a family law attorney, I believe that it is important to understand a number of different legal areas such as estate planning, probate, tax, real estate, and bankruptcy, to name a few. Also, a background in psychology or therapy is helpful, but not necessary. You should always strive to be calm, and know when you can and cannot vent your emotions. It is always important to be organized and be able to triage the different aspects of your case in terms of what is and is not an emergency. Finally, I believe that it is important to do your best to make family law a quality practice area. You need to do the best possible job as a family law attorney, because if you do not, more clients will start representing themselves, and that will create a system that is much less beneficial for everyone. Key Takeaways Meet and confer with counsel on how evidence will be handled. The more stipulations the better. Ensure that all evidence is served and provided to the court so there are no surprises for anyone. Give accurate time estimates for the matter to ensure the matter is heard, while at the same time, ensuring there will not be a mistrial. In the case of a client s job loss, file for a modification of the existing support order as soon as the client knows their job is lost or in jeopardy. Give the client practical advice and take a holistic approach to the

15 Is That a Light at the End of the Tunnel or an Oncoming Train? client s situation. If the client feels as if you are on their side and you understand where they are coming from, you will have a much better opportunity to make sure that the client s needs are provided for. Ensure that you have staff members on hand who are able to respond and deal with the issues in complex cases in a proactive manner. If you need the assistance of forensic experts in a case, retain them immediately. Set guidelines for clients who have been charged with domestic violence i.e., if they continue to engage in that kind of behavior you are going to terminate the relationship. Help clients who have been victims of domestic violence in finding assistance and shelter, and file support orders. Counsel clients at the outset that ADR is an option. Always engage in formal discovery prior to engaging in ADR because there are risks involved in entering into a settlement if the client does not understand when something is not in their best interest. Do as much case preparation as possible when you are first retained, and organize your case as if you are going to trial. If you do not know what strategies will or will not work, and if you do not know how the case is going to fare in front of a judge, you are not going to be in a position to advise the client on settlement. Daniel Gold is the managing partner of Tredway Lumsdaine & Doyle LLP, a regional law firm in Southern California for more than fifty years. He was admitted to the State Bar of California and the United States District Court in Mr. Gold s practice has emphasized family law litigation since his admission, participating in more than 150 contested hearings and trials. Mr. Gold has been certified by the State Bar of California Board of Legal Specialization as a family law specialist. He has previously authored chapters for Inside the Minds, and conducts continuing education courses for attorneys and CPAs on family law-related topics. He lives in Orange County, California with his wife and three children.

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