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| e N e w s l e t t e r | December 2009 |
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Divorce in the News: "American Jailed in Japan for Trying to Reclaim his Children" read on CNN website
Commentary Corner: The McCourt's Postmarital The press focuses on the postmarital agreement as the central issue in the case of Frank and Jamie McCourt. While courts of equity view gifts and contracts which are made or take place between parties occupying confidential relations with a jealous eye, when parties have the opportunity to obtain counsel and where the parties each get some benefit from contract, the contract is likely to be enforced. See In re Marriage of Friedman (2002) 100 Cal.App.4th 65 and In re Marriage of Burkle [Burkle II] (2006) 139 Cal.App.4th 712. Case of the Year: "Capital Used to Build Business not Income for Support" One the most significant cases of 2009 was the Blazer case. Mr. Blazer was in the agricultural business. His business was thinly capitalized and needed to be built up again. Also, business environment was changing and to compete he needed to expand and vertically integrate business so that he could handle entire processes from growing through distribution rather than just acting as a middle man. Mrs. Blazer that it was Mr. Blazer's choice to spend business income in this fashion and that the income should be included in his cash flow available to pay her support. The court held that income reinvested in a company is properly excluded for spousal support purposes. "Attack on the Double Dip Fails" The Blazer court denied Mr. Blazer's claim of double dipping. His expert defined double dipping as using the same stream of earnings twice in a family law context: First, to determine business value and hence property division; and second, in establishing spousal support. The appellate court found that there was no proof that the business was valued using a future stream of income, although Mr. Blazer argued that goodwill based on excess earnings necessarily derives from postseparation efforts. As a general legal proposition, he says, the capitalization of excess earnings approach "is in essence a way of talking about expected future earnings. To argue otherwise is splitting hairs." The court rejected this argument stating that no goodwill may exist separate and apart from the services of the person who created it: "Although the goodwill of a business may be the result of the personal skill, talent, experience, or reputation of an individual connected with the business, it may attach to and continue with the business even after the separation of the individual on whom it was founded." See In re Marriage of Blazer, 176 Cal.App.4th 1438 This may not be the last word on the subject of double dipping. The appellate court stated that the record did not indicate that the trial court did not use future income as part of the valuation of the business. Also Mr. Blazer did not appeal the trial court's decision on valuation. It is clear that the appellate courts are unwilling to consider the double dip concept. The court also denied a double dip argument in the Dietz case earlier in the year when the appellate court reversed the trial court for modifying spousal support based on wife's ability to draw on her retirement funds. See In re Marriage of Dietz, 176 Cal.App.4th 387 Announcements:
Our Firm: Walzer & Melcher LLP specializes in family law. With a team of four lawyers, two legal assistants, and a paralegal, we are equipped to handle complex divorce, custody and paternity matters. Our clients are business owners, executives, athletes and celebrities. We limit the type, size and number of cases we accept so we can deliver efficient and personal service to each client. Family law is always evolving and we hope to provide you with helpful information for use in your own practice. |
Walzer & Melcher LLP - Upcoming Events: January 8, 2010 Tax Issues Facing Family Law Practitioners When Dividing Assets or Making Support Orders 27th National CLE Conference Christopher C. Melcher Law Education Institute and Colorado Bar Association Vail, Colorado  Peter M. Walzer is member of the following committees: AAML Amicus Committee AAML Website Committee AAML Chapter Leaders Committee (Co-Chair) ABA Continuing Legal Education Committee ABA Publications Board Elkins Task Force LACBA Executive Commitee: Family Law Section  Christopher C. Melcher is a member of FLEXCOM -- Executive Committee of the State Bar Family Law Section and is a Certified Family Law Specialist. He is also a member of the judicial elections evaluation committee of the Los Angeles County Bar Association.  Leena S. Hingnikar received a Bachelor of Arts Degree in 2003 from the University of California, San Diego. She received her Juris Doctor from Whittier Law School in 2007.  Jennifer L. Musika received a Bachelor of Arts Degree in 2005 from Vanderbilt University. She received her Juris Doctor from Boston University Law School in 2008. |
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