Ann v. Eastis

California Court of Appeal Apr 23, 1975 No. Civ. No. 13834Published

Before: Gardner

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Holding. The court held that while community assets must be divided equally under the Family Law Act, trial courts have discretion to allocate community obligations that exceed assets based on the parties' respective earning capacities and other equitable factors.

Issues

Whether community property must be divided equally when liabilities exceed assets.
Whether trial courts have discretion to allocate community obligations based on factors other than strict equality.

Disposition. reversed

Quotations verified verbatim against the opinion

“Civil Code, section 4800 provides that the court shall divide the community property equally.”

“Obligations, standing by themselves, are not property.”

“the court has the discretion to order, the payment of such obligations in a manner that is just and equitable, depending upon the respective earning capacities of the spouses and other relevant factors.”

Opinion

GARDNER, J. After a childless marriage of three years’ duration, wife filed an action for dissolution of the marriage and, after a contested trial, the court entered a judgment of dissolution.

[462]The court found that the wife had waived spousal support. It further found that the parties had community assets totalling $5,250 and community liabilities of $6,450. The wife was awarded community assets valued at $3,500 and ordered to pay $1,000 in community obligations. Thus, the net assets awarded to the wife amounted to $2,500. The husband was awarded community assets valued at $1,750 and ordered to pay $5,450 of community obligations. This left the husband with a net deficit of $3,700.

Husband appeals from that portion of the interlocutory judgment dividing the community assets and obligations.

Rather obviously the court was in error in its division of the community property of the parties. Civil Code, section 4800 provides that the court shall divide the community property equally. California Rules of Court define property as including “assets and obligations” (Cal. Rules of Court, rule 1201(d)) and further provide that the court “shall ascertain the nature and extent of all assets and obligations subject to disposition by the court . . . and shall divide such assets and obligations as provided in the Family Law Act.” (Cal. Rules of Court, rule 1242; In re Marriage of Knickerbocker, 43 Cal.App.3d 1039 [118 Cal.Rptr. 232]; In re Marriage of Carter, 19 Cal.App.3d 479 [97 Cal.Rptr. 274].) This was not done in the instant case. The matter must be returned to the trial court in order to effect an equal division of the meager assets. Just how that is to be done we leave to the ingenuity of the trial judge.1

[463]However, whatever the trial judge does the parties are going to be left with unpaid obligations after the division of the assets.

We thus turn to a consistent and perplexing problem facing trial judges—just what to do about the division of debts and obligations where there are either (1) no assets, only obligations, or (2) obligations remaining after the division of the assets. This is a very common situation facing trial courts which the authors of the Family Law Act apparently did not contemplate.2

Ann v. Eastis

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