May 15, 2007

To sell or not to sell?

In 2003, the Oregon legislature passed a bill that automatically prevents parties in a dissolution of marriage case from engaging in certain activities once the case is filed, for the petitioner, or after service of the petition on the respondent, for the respondent. Practitioners (who often sought these sorts of restraining orders on their own, before they became automatic) tend to refer to it as the “statutory restraining order.”

What exactly does the statutory restraining order prevent the parties from doing? Neither party can cancel, modify or allow insurance policies to lapse — these include heath, homeowner, renter, or auto policies — for the other party or a child of the parties. ORS 107.093(2)(a). The parties can’t change the beneficiaries to any insurance policy, either. ORS 107.093(2)(b).

Once the divorce case is underway, the parties can’t sell or encumber “any property” in which the other party has an interest unless the other party consents or the court allows the sale or encumbrance. There’s an exception to this provision, though for deals made for usual course of business or necessary life expenses. ORS 107.093(2)(c).

One of the more confusing provisions is that which prevents either side from “making extraordinary expenditures without providing written notice and an accounting” of the expenses. ORS 109.093(2)(d)(A). The question is — well, what’s an extraordinary expenditure? I recently researched this, and don’t have any good answers to it. In listening to the hearings and committee meetings at the legislature, it’s clear that the Senate and House were more interested in other provisions of the legislation — those dealing with the selling and encumbering of property, and making changes in insurance policies — than in the last bit about extraordinary expenditures. This issue hasn’t come up in the court of appeals, and so we don’t have court guidance yet, either.

Either party can request a hearing to ask the court to waive or modify certain provisions of the restraining order. ORS 107.093(3).

If you’re worried about whether the statutory restraining order is going to apply to transactions you’d like to conduct after your divorce action has been filed (if you’re the petitioner) or after you’ve been served (if you’re the respondent), make sure you talk to your attorney first.