May 4, 2007

New Case Law: Honesty is the best policy

In Oregon, when going through any sort of support proceeding (child or spousal), the parties are required to complete what’s known as the USA, short for Uniform Support Affidavit. Completing this can be about as much fun as doing your taxes (maybe even more, because finishing it involves itemizing out all of your monthly expenses, as well as your income and liabilities), but it’s necessary for the court to know the financial situation of the parties to make a fair ruling.

This week, the Oregon Court of Appeals sent a warning to parties who might be tempted to fudge numbers on a USA. In Sugar and Sugar, 212 Or App ____, ____ P3d ___ (2007), the court upheld a trial court who penalized a woman who underreported her income on a USA she filed during an initial dissolution of marriage proceeding. Partially as a result of those numbers, the trial court ordered her husband to pay spousal support. Eight months later, her husband filed to terminate the support.

In Oregon, a spousal support order can be modified, but only where the court finds there has been a “significant, unanticipated change in circumstances.” Basically, this means something big changed, and it wasn’t something the parties foresaw at the time of the initial action.

In this case, the wife’s circumstances didn’t necessarily reflect significant changes that couldn’t have been foreseen at the time of the dissolution. Although she underreported her income in the first proceeding, in the modification proceeding she filed a new, more accurate USA. The husband argued that her increased income and better financial situation reflected a substantial, unanticipated change, and that his support order should be terminated. The wife argued that nothing much had changed, and that the trial court should have figured out her accurate level of income because she attached a paystub to her USA.

The trial court ruled that the wife was not allowed to represent her income hadn’t changed because she’d previously represented her income at a lower level (she was precluded from making this argument because of a doctrine called “judicial estoppel”), and the court ultimately ruled the wife’s support should be terminated completely. In Sugar, the Court of Appeals agreed.

For litigants in Oregon, what does that mean? Be completely forthcoming and don’t be too sharp — it can and will be used against you later!