Application of Automatic Restraining Orders in Family Law Summons
Necessities of Life
The situation is one party uses community funds for the necessities of life and to pay legal fees. The other party in essence wants reimbursement to the community for these funds.
The demand for reimbursement is based on the automatic standard restraining orders of Family Code § 2040(a)(2) that bar either party from: “. . . from transferring, encumbering, hypothecating, concealing, or disposing of any property, real or personal, whether community, quasi-community, or separate, without the other party’s written consent or a court order. . .”
But Family Code § 2040(a)(2) has an exception which specifically states: “except in the usual course of business or for the necessities of life.” “Read literally, the restraining orders forbid a divorcing spouse from even buying groceries (“you and your spouse are restrained from … transferring … or in any way disposing of any property, real or personal ….”) unless one reads further and realizes the blanket preclusion is qualified for disposals of property either in the “usual course of business or for the necessities of life.” Besides being a matter of common sense, these qualifiers are mandated by a formidable body of constitutional law precluding the summary deprivation of property without due process, i.e., without notice and hearing. That law was forged in the context of overreaching creditor’s remedies in which alleged debtors found themselves summarily deprived of the use of their property without deliberative court proceedings. (See Randone v. Appellate Department (1971) 5 Cal.3d 536 [96 Cal. Rptr. 709, 488 P.2d 13] [prejudgment attachment procedure unconstitutional without notice and hearing]; Blair v. Pitchess (1971) 5 Cal.3d 258 [96 Cal. Rptr. 42, 486 P.2d 1242] [same for claim and delivery]; see also Sniadach v. Family Finance Corp. (1969) 395 U.S. 337 [23 L. Ed. 2d 349, 89 S. Ct. 1820] [summary attachments without notice and hearing unconstitutional].)” Gale v. Superior Court (2004) 122 Cal.App.4th 1388, 1393
Contrast the clearly stated exceptions to the ATROs with the marriage of McTiernan, where the sale of stock was held a violation of the ATROs. Specifically: “In April 1998, faced with a cash shortage, husband sold certain community property stocks, the proceeds of which he used in part to pay community expenses. Husband did not inform wife or seek court approval of the stock sale before conducting it.” In re Marriage of McTiernan & Dubrow (2005)133 Cal.App.4th 1090, 1103
The McTiernan court did not specify what the proceeds from the sale of stock were used for except in part to pay community expenses. The McTiernan court did not state the proceeds were used for the necessities of life or legal fees. In fact during the eight and three-quarter years of marriage before separation, husband had earned approximately $15 million. Most likely the sale proceeds were not used for necessities of life or legal fees.
In absence of a statement of facts the sales proceeds were used for necessities of life and/or legal fees, should the McTiernan case apply to expenditures for the necessities of life? The “tentative ruling” of the court is the community should be reimbursed.
Application of Automatic Restraining Orders in Family Law Summons for Attorney Fees
California Family Code Section 2040(a) (2) allows the payment of attorney fees. “Notwithstanding the foregoing, nothing in the restraining order shall preclude a party from using community property, quasi-community property, or the party’s own separate property to pay reasonable attorney’s fees and costs in order to retain legal counsel in the proceeding. A party who uses community property or quasi-community property to pay his or her attorney’s retainer for fees and costs under this provision shall account to the community for the use of the property.”
Should a person be allowed to use community funds to pay for dissolution of marriage without reimbursing the community for those funds? The “tentative ruling” of the court is the community should be reimbursed.