February 16, 2008

New Case Law: Two new Oregon spousal support cases.

istock_000001909034xsmall.jpg istock_000004621270xsmall.jpg As an Oregon divorce lawyer, I am always interested in what the appellate court says regarding spousal support. The Oregon Court of Appeals published two spousal support decisions on February 6, 2008. Both decisions provide some guidance to husbands and wives dealing with spousal support claims at the trial court level.

In Potts and Potts, ____ Or. App ___ (2008), a self employed husband challenged a $7000 monthly award of indefinite spousal support to Wife. The court denied wife’s property appeal, and reduced husband’s spousal support obligation to $5000. Husband’s main argument was that the spousal support award gave wife a much higher net income than him after he paid support. Husband argued that he faced an increase in business expenses that should be deducted from his income, and that wife could earn substantial income from the property received, thus reducing her need for monthly support. The court didn’t buy husband’s “increased business expenses” argument, and found that wife’s potential for investment income should be reduced by the cost of the home she would purchase with her property award. The court still reduced husband’s support to $5000 per month for an indefinite term, holding that the goal of enabling the parties to live separately at a standard of living similar to the marriage could be met at this amount. The court calculated husband’s after tax income to be $139,671, and wife’s to be $88,744. The court considered these figures roughly equal in part because husband received the riskiest, most volatile assets, with wife’s property award being more stable.

In Van Riesen and Cross, ____ Or. App. ___ (2008), the court considered husband’s argument that he should have been awarded maintenance support. The court agreed, holding that husband was entitled to both temporary and indefinite support from wife.

The parties were married in 1979 and divorced in 2004. They have two children. Husband worked full time during the marriage, and was fired from Intel in 1996 after a bad review. He took time off to recover from the emotional blow, and after an 18 month employment hunt, did not seek new employment because his investments were doing well, and he anticipated a $2,000,000 payment from Intel from his employment grievance with Intel for lost compensation. His employment grievance was ultimately denied. Husband then developed diabetes, dyspepsia, and depression. Wife filed for divorce in 2003. At that time she earned about $120,000 per year.

At trial, husband and his experts argued he was unemployable based on his personality, age, and health conditions. The trial court awarded husband $25,000 in transitional support, and the “long half” of the property. (Really not that much more than half, only $31,565 more than wife in a $1,600,000 marital estate) Wife argued on appeal that husband had skills, and that he could work but had voluntarily retired. Husband argued that he could not work based on his age, health, and time out of the workforce. The appellate court found husband capable of work, but not at his previous salary (approximately $120,000 including bonuses.) The court also found that husband’ s unemployment was not voluntary as wife claimed. The court awarded husband maintenance support of $2,500 per month for 4 years until he could draw on his retirement, and that a lesser amount be paid after that time.

There is no magic formula for spousal support. The court considers each claim on a case by case basis, applying the statutory factors in ORS 107.105(1)(d) and existing case law. Both cases are interesting, and informative to parties with similar issues and claims.