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Case of the Month Archive

March 2017

Retirement was the marital standard of living . . .

 

In affirmance of spousal support order, Fourth District holds that trial court did not err by declining to issue Gavron warning or to impute income to wife who was of retirement age, had retired pre-disso, and had the right to remain retired

 

In re Marriage of McLain

(January 6, 2017)

California Court of Appeal 4 Civil E062884 (Div 2) 7 Cal.App.5 th 262, 212 Cal.Rptr.3d 537, 2017 FA 1772, per Miller, J (McKinster, Acting PJ and Codrington, J, concurring). San Bernardino County: Apaloo, J, affirmed. For appellant: Jeffrey Valladolid, (909) 621-1437. For respondent: Gregory Zumbrunn, CFLS, (760) 245-5333. CFLP §§F.56.0.0.20, F.80.2, F.97.17, J.76.5.

 

Bruce and Colleen McLain were married in October 2001. During the marriage, Colleen worked as a personal assistant and transaction coordinator for a real estate agent/broker. She had a real estate license, but never used it. Bruce worked as a firefighter.

 

In 2005, they both retired. After that, Colleen worked in the real estate office only to train her daughter to take over her job, except for some part-time work in 2011 or 2012, "as payment for a loan." Bruce began working with a contractor to build a family residence on a lot in Big Bear City that they bought in 2003. Meanwhile, the couple refinanced a home that Colleen owned before marriage three times, putting the re-fi funds in a joint account and using them to build the Big Bear house. In 2004, they sold Bruce's house in San Dimas, deposited the proceeds in a joint account, and used part of the funds on the construction of the Big Bear house. Bruce also used money from his 401-A account and his IRA for that purpose.

 

Bruce and Colleen separated on March 14, 2014, and began disso proceedings. Colleen reported monthly income of $746 from Social Security (less MediCare premium of $198) and Bruce reported retirement income of $10,000 a month. At trial, he sought Fam C §2640 reimbursement for his separate property funds used to pay for the construction of the Big Bear house. He submitted a handwritten note that listed $372,187 from the sale of his San Dimas house and $40,600 from his 401-A in support of his request. Colleen's attorney stipulated to the admission of that note, but argued that it was not sufficient tracing evidence to support Bruce's request. Colleen later testified that "some" of those funds were used for construction costs, but did not specify the amount used.

 

When the disso trial concluded, the trial court denied Bruce's request for Fam C §2640 reimbursement due to the lack of adequate tracing evidence, and ordered Bruce to pay $5,500 for Colleen's attorney's fees and $4,000 a month for her spousal support. In a detailed ruling, the trial court determined that Colleen needed spousal support to meet her financial needs and bring her close to the marital standard of living. The court declined to impute income to Colleen or to give her a Gavron warning, since she was beyond retirement age, was actually retired, and had a right to remain retired. In addition, the lower court found that retirement was part of the marital standard of living. Besides, no evidence had been submitted regarding any available jobs or additional income available to Colleen.

 

Bruce appealed, but the Fourth District affirmed.

 

Sauce for goose and gander . . .
Bruce contended that as the supported spouse, Colleen didn't have the same right to retire that he did; she had an obligation to become self-supporting. The justices reasoned that a trial court making an award of spousal support must consider the factors listed in Fam C §4320, one of which is the age and health of the parties, and another which is the goal that the supported spouse become self- supporting within a reasonable period of time. However, it is up to the trial court's discretion to apply the pertinent factors and to determine the proper weight to give each one. The court may also consider other factors that it deems just and equitable. When they analyzed the "age factor," the panel thought it meant that the lower court must consider whether the parties are young and expected to earn a living for a while, or are older and "perhaps no longer working." The justices pointed out that "there comes an age when people commonly stop working" and retire, usually at age 65. Thus, when the parties are older and have reached retirement age, those facts must be considered. Here, the lower court also considered, as required, the marital standard of living and Colleen's needs. Its determination that the parties' marital standard was retired and its determination that Colleen was entitled to remain retired, the justices said, showed that the trial court had considered the marital standard and found that the goal of self-support would conflict with the marital standard. The panel found no error in the lower court's having given more weight to Colleen's age, retirement, and lack of employment opportunities that to the goal of self-support. Given that, the justices concluded, there was no need for the lower court to give the Gavron warning.

 

A need for fees . . .
Bruce next contended that the lower court should not have awarded Colleen Fam C §2030 and §2032 fees, since it based the award on her right to remain retired. The panel explained that age is relevant in making a fee award, just as it is in making a spousal support award. On these facts, the justices determined, it was clear that Colleen needed a fee award; moreover, the lower court considered the appropriate factors in making its award.

 

No trace of the necessary records . . .
Bruce then renewed his contention that the trial court erred by requiring him to submit more than his handwritten note to trace his separate property contributions. He didn't interpret Fam C §2640 to require tracing through various documents. The justices pointed out that in See v. See (1966) 64 Cal.2d 778, 51 Cal.Rptr. 888, the California Supreme Court advised a spouse who wanted to keep separate property separate not to commingle the funds with community assets and income. If the spouse chooses not to do that, he or she must keep records that are adequate to show that community funds had been exhausted and only separate property was left when the contribution was made. In other words, the panel here concluded, records must be kept and documentary proof presented in order to successfully trace separate property contributions. Bruce, however, contended that the fact that Colleen's attorney had stipulated to the admission of the handwritten note meant that it was sufficient for tracing. Not so, the justices said. Stipulating to the admissibility of a piece of evidence does not mean that Colleen had conceded the issue. In fact, Colleen's attorney had disputed the sufficiency of the tracing. In addition, Colleen's trial testimony was not specific enough to constitute the necessary tracing and a review of the amounts deposited and expended from the parties' joint account did not provide the necessary clarity. Accordingly, the panel affirmed the lower court's judgment.

 

 

Comment

  

We're glad to see this court taking a common-sense approach to the issue of how the goal of self-support and the Gavron warning should be applied when the supported spouse is retired, past retirement age, and/or has little expectation of obtaining employment at his or her age. In the past, we've seen cases in which the supported spouse is apparently expected to flip burgers at McDonalds when he or she is past 50. These justices can clearly see that Colleen is at a place in her life where she is entitled to maintain her retirement and highly unlikely to become self-supporting, contrary to Bruce's opinion. This opinion gives a good analysis of the Fam C §4320 factors and how they should be applied. Moreover, rather than simply ignoring a weaker factor, the justices approve a trial court that balanced them and chose to emphasize one over the other. It also reminds us that the same factors that apply to a spousal support award are also used when the trial court considers making an attorney's fee award.

 

 

Bruce seeks Fam C §2640 reimbursement for his contributions to the construction of the Big Bear house. Colleen, however, refinanced her separate property house three times, the proceeds of the last two refi's were also contributed to the construction of house. Apparently, her funds had been too commingled for her to ask for the same reimbursement. At least, we aren't told that she made such a request.

 

 

 
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