August 24, 2009

New Case Law – Spousal Support Amount and Disability Income

As a Portland Oregon divorce law firm, Stephens & Margolin LLP is dedicated to keeping up to date on Oregon Court of Appeals and Oregon Supreme Court opinions. As a service of The Oregon Divorce Blog, we will be providing updates as new opinions come out.

On August 5, 2009, the Court of Appeals ruled in the case of Morales and Morales, in which the court modifies the trial court’s ruling with respect to spousal support based upon the wife’s appeal.

Husband and Wife married when he was 22 and she was 17.  Their marriage lasted for over 35 years.  Wife raised the parties’ children, never working outside the home, while Husband served in the army.  Husband retired from the army in 1992, after 20 years of service, for medical reasons. 

Wife was awarded $2,000 per month in support at a temporary hearing, in order to cover joint family expenses along with her own individual expenses.  At the hearing, the trial court imputed minimum wage income to wife and advised her to obtain a job.

At the time of trial, husband’s income totaled approximately $5,200 after subtracting taxes and payment for his child’s health insurance.  His income included $3,210 in nontaxable disability payments.  Wife had attempted to find a job, but was still unemployed.  The trial court awarded wife spousal support in the amount of $1,000 per month for one year, $800 per month for two years, and then $500 per month indefinitely.  The court imputed minimum wage income to wife and made a ruling that the nontaxable disability income for husband could not be divided by the court.

On appeal, wife argues that the award of $500 per month is inequitable and husband counters that the award is appropriate based upon husband’s non-disability income. 

The court of appeals explains that husband’s nontaxable disability income is in to be considered income for support purposes, regardless of whether it can be divided as part of a property distribution.  Oregon law defines “income” for purposes of support payments, as, among other things, “any program or contract to provide substitute wages during times of unemployment or disability.”  ORS 25.010(7)(f); see also OAR 137-050-0340 (for purposes of support, “gross income includes income from any source including, but not limited to * * * disability insurance benefits” (emphasis added)).  In addition, the court held that federal law does not restrict the court’s ability to consider the disability payments as income. 

The court of appeals then goes on to consider what amount of support is “just and equitable.”  Based on the length of the parties marriage, the parties’ respective situations, and the parties’ respective incomes or ability to obtain employment, the court of appeals held that wife should be awarded an amount of $1,400 per month indefinitely. 

The entire opinion can be viewed here:
The lawyers at Stephens & Margolin LLP can assist you with your family law appellate questions. If you have any questions about Oregon appellate law please contact Daniel Margolin, who focuses part of his practice on family law appeals, or C. Sean Stephens at Stephens & Margolin LLP