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  • May 08, 2020 06:57:56 AM
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7 Affirmative Defenses to a Partition Action in California

When Two People Own Property, But One Person Doesn’t Want to Sell Tricks To Save Your House in a Partition Action An experienced partition attorney in California may often be asked whether there are affirmative defenses to partition under California law. While some people may refer to these as affirmative defenses, it might be best...

Affirmative Defenses Partition Action California Attorney Lawyer

When Two People Own Property, But One Person Doesn’t Want to Sell

Tricks To Save Your House in a Partition Action

An experienced partition attorney in California may often be asked whether there are affirmative defenses to partition under California law. While some people may refer to these as affirmative defenses, it might be best to look them as ways to achieve a better outcome. If played correctly, you may even be able to save your house and become the sole owner for as little as possible. Even if your house is sold, you may be able to maximize your return.

1) Challenging a Plaintiff’s Standing to Bring a Partition Action

The requirement is that “A partition action may be commenced and maintained by…An owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate therein is owned by several persons concurrently or in successive estates.” Code Civ. Proc. § 872.210(a)(2). So long as the plaintiff is not alleging a community property interest that must be raised through a family law attorney, any co-owner of the property has a right to partition under California law.

Courts have even considered partition as a remedy when an owner is not on record title, meaning they hired a quiet title attorney who would have been required to show their equitable ownership by clear and convincing evidence under Evidence Code 662.

Contrary to common belief, there is no requirement that the parties bringing a partition action have the support of a majority of owners of the property.  Rather, an owner of just 1% of a property could bring a partition action. While defendants may not be pleased, partitions promote the alienability (ability to be sold) of property so that properties do not become owned by numerous owners who must reach an agreement to sell to just one owner. However, even if this defense does not apply, other defenses may be available.

2) Waiver of Right to Partition

“A co-owner of property has an absolute right to partition unless barred by a valid waiver.” Orien v. Lutz (2017) 16 Cal.App. 5th 957, 962 (citing Code Civ. Proc. § 872.710(b) (“partition as to concurrent interests in the property shall be as of right unless barred by a valid waiver”)). Ordinarily, such a waiver would come about due to “an agreement among co-owners of property….” Orien v. Lutz (2017) 16 Cal. App. 5th 957, 963. However, such written agreements between co-owners of real property are rarely seen in California. Rather, most co-owners simply accept a deed placing multiple owners on title, then realize the complications of doing so later. Establishing this defense is possible, but a writing is going to go a long away.

3) Keep Recoverable Costs Low by Showing Cooperation with the Plaintiff, Referee, Realtor/Broker and Court in the Listing and Sale

If you’re hoping to defeat a partition, it is still important to show some level of cooperation with the plaintiff, the referee, any broker or Realtor hired to list the property for sale, and the court for any hearings. This will allow you to be in the good graces of these important parties in the process to the extent you wish to leverage your position as co-owner. It can also reduce the costs that may be apportioned to each of the co-owners after the sale.

4) Refinance the Property to Buy Out the Co-Owner

One of the most common ways to defeat a partition action is to buy out the other co-owner or co-owners. Generally speaking, to determine the amount that should be paid, first determine the likely value of the property, them deduct the costs of sale (perhaps 7% to 9%), then deduct any mortgages or liens on the property. From this amount, determine the percentage interest of each owner in the property to find their equity. Generally, buying out the interest of a co-owner involves obtaining a loan. This can be done by using an escrow to hold the deed from the other co-owners while the purchasing party deposits all the funds necessary. When the loan is funded, the escrow will pay the co-owner and record the deed. Of course, if you have the cash, you’re welcome to fund the escrow with cash.

5) Overbid at the Sale with a Credit Bid for the Co-Owner’s Equity in the Property

California law provides that “the court shall order sale by such methods and upon such terms as are expressly agreed to in writing by all the parties to the action.” Code Civ. Proc. § 873.600. It goes on to provide that: “The court may, at the time of trial or thereafter, prescribe such manner, terms, and conditions of sale not inconsistent with the provisions of this chapter as it deems proper for the particular property or sale.” Code Civ. Proc. § 873.610(a).

Accordingly, co-owners of a property hoping to save their home should request that the court allow overbidding at the hearing approving the sale so that the co-owner can outbid any third party.

The co-owner should also request that the co-owner be given credit for their one-half interest in the property, sometimes known as a credit bid. For example, if all parties agree that the co-owner will obtain $100,000 from the sale of the property, that co-owner should be able to bid the $100,000 they would otherwise receive. As a practical matter, that would mean that the co-owner who buys from the court would need a smaller loan to purchase the house. For example, if the purchase price is $300,000, and the co-owner has a credit bid of $100,000, they would only need to obtain $200,000 more to buy the house.

6) Recovering Offsets, Reimbursements and Attorney’s Fees

Co-owners should always be mindful that the state court has the power to order the recovery of attorney’s fees, costs, credits & reimbursements in a partition accounting. The famous case of Wallace v. Daley (1990) 220 Cal.App. 3d 1028, 1036 explained as follows:

Every partition action includes a final accounting according to the principles of equity for both charges and credits upon each co-tenant’s interest. Credits include expenditures in excess of the co-tenant’s fractional share for necessary repairs, improvements that enhance the value of the property, taxes, payments of principal and interest on mortgages, and other liens, insurance for the common benefit, and protection and preservation of title.

Co-owners seeking to maximize their outcome from the partition action should keep careful records of the payments they made and the payments that the other co-owner did not make on property taxes, insurance coverage, mortgage payments, repairs, etc.

7) Offsets Exceeding the Plaintiff’s Equity in the Property

Theoretically, if a co-owner can show that the plaintiff has no equity in the property, the Court may be hesitant to allow a partition to go forward. One such way of showing that the plaintiff has no equity would be if the offsets exceed the plaintiff’s equity in the property under an assumed sale at fair market value. This would require certain facts that may only be present in certain cases.

Contact an Experienced Partition Attorney in California

The bottom line is that partition actions in California are complicated, meaning it is important to protect your rights by contacting a real estate lawyer to determine the best course of action.


Child Custody Agreement [Sample Template Form Stipulation Example Free]

Are you trying to reach an agreement with your co-parent on the child custody arrangement for your child? Our free template can help!

child custody lawyer family law attorney riverside california inland empire

Sample Child Joint Custody Agreement Template Form

Are you and your co-parent trying to come up with a custody arrangement that works for your child without involving the family court? Sometimes it can seem like there is an endless supply of help out there for parents who can’t agree on sharing custody of their child, but finding resources for parents who are actually compromising and cooperating can feel like searching for a needle in a haystack.

If our child custody and visitation agreement template does not help you reach a stipulation with your co-parent for the benefit of your child, the next step is seeking the help of a skilled family law attorney for help determining what is in your child’s best interests under California law.

Oftentimes, having a child custody attorney help draft an agreement that meets the needs of both parents and the child can prevent confusion and controversy later on.

Free Stipulation – Child Custody & Visitation Example Agreement Template:

[NAME]

[ADDRESS]

[TELEPHONE NUMBER]

[EMAIL]

THE PARTIES OF THE ABOVE-ENTITLED MATTER ENTER INTO THE FOLLOWING STIPULATION AND ORDER RE CHILD CUSTODY AND VISITATION:

I. CHILD CUSTODY AND VISITATION

1. The parents shall share JOINT LEGAL CUSTODY of the minor children: CHILD’S NAME, born CHILD’S DOB; and CHILD’S NAME, born CHILD’S DOB.

A. The parents shall share in the responsibility to make decisions regarding the health, education, and welfare of the children.

B. Each parent shall notify the other of the name and address of each health practitioner who examines or treats the children, such notification to be made within 3 days of the commencement of the first such treatment or examination.

C. Each parent is authorized to take any and all actions necessary to protect the health and welfare of the children, including but not limited to consent to emergency surgical procedures or treatment. The parent authorizing such emergency treatment must notify the other parent as soon as possible of the emergency situation and of all procedures or treatment administered to the children.

D. Each parent will have access to the children’s school, medical, and dental records and the right to consult with those professionals providing services to the children.

E. Each parent shall be designated as a person the children’s school is to contact in the event of an emergency.

F. Notification of parent’s current address. Each parent shall keep the other advised at all times of his/her current residence address, telephone numbers (home and work), the children’s school, and the location of any place where the children will be spending any extended period of lime four days or longer. Neither parent may use such information for the purpose of harassing, annoying or disturbing the peace of the other or invading the other’s privacy. If a parent has an address with the State of California’s Safe at Home confidential address program, no residence or work address is needed.

G. Notification of proposed move of children when that move will impact the ability of the children to visit regularly with the non-custodial parent. The parent intending to move the children must notify the other parent 45 days prior to any planned change in residence of the children. The notification must state, to the extent known, the planned address of the children, including the county and state of the new residence. The notification must be sent by certified mail. return receipt requested.

H. In exercising joint legal custody, the parties will share in the responsibility and discuss in good faith matters concerning the health education, and welfare of the children. The parties must discuss and consent in making decisions on the following matters:

1) Enrollment in or leaving a particular private or public school or daycare center;
2) Beginning or ending psychiatric, psychological, or other mental health counseling or therapy;
3) Participation in extracurricular activities;
4) Selection of a doctor, dentist, or other health professional (except in emergency situations).

I. If a party does not discuss and obtain the consent of the other party to the decisions indicated in item H above,

1) He or she may be subject to civil or criminal penalties.
2) The court may change the legal and physical custody of the minor children.

J. In all other matters in exercising joint legal custody, the parents may act alone as long as the action does not conflict with any orders concerning the physical custody of the children.

2. The parties shall have JOINT PHYSICAL CUSTODY of the children. Both parents shall share the physical care, custody, and control of the children reasonably between them in such a manner as to ensure that the children maintain frequent and continuing contact with both parents.

3. REGULAR TIME SHARE PERIODS

A. MOTHER’S PARENTING TIME:

1) EXAMPLE: MOTHER shall have the children on alternating weeks beginning on Thursday pick-up at school (or 3 PM on non-school days) until Saturday at 8 PM, commencing September 3, 2020; and
2) EXAMPLE: MOTHER shall have the children on alternating weeks beginning on Thursday pick-up at school (or 3 PM on non-school days) until Sunday at 8 PM, commencing September 10, 2020.

B. FATHER’S PARENTING TIME:

1) FATHER shall have the minor children at all other times.

C. During any parenting period, the parent will be expected to spend as much time as possible with the children.

D. BOTH PARENTS shall have as much additional parenting time with the children as can be agreed upon by the parents.

E. No interference with the schedule of the other parent without that parent’s consent. Neither parent will schedule activities for the children during the other parent’s scheduled parenting time without the other parent’s prior agreement.

F. Canceled parenting time. If the non-custodial parent fails to arrive at the appointed time and fails to notify the custodial parent that he or she will be late, then the custodial parent need wait for only 30 minutes before considering the visitation canceled.

G. In the event that a non-custodial parent is unable to exercise visitation on a given occasion, he or she must notify the custodial parent at the earliest possible opportunity.

H. The custodial parent must give the non-custodial parent, as much notice as is possible, if the children are ill and unable to participate in scheduled time with the other parent. A doctor’s excuse is required.

4. HOLIDAYS/SPECIAL DAYS

A. Holidays/Special Days/School Breaks shall be arranged by mutual agreement of the parents.

B. Special day contacts shall take precedence over regular periods and holiday visitation for either parent.

C. Holiday/Special Day contacts shall take precedence over regular and school break contacts and shall not interfere with school attendance.

5. VACATION/TRAVEL

A. A parents’ vacation may not interfere with the other parent’s Holidays/Special Days or School Break schedules unless agreed upon between the parents in writing.

B. Every year, each parent may take vacation with the children for up to 7 days, for no more than 7 consecutive days at once. The parent must notify the other parent verbally and in writing of their vacation plans a minimum of 30 days in advance and provide the other parent with a basic itinerary that includes dates of leaving and returning, destinations, flight information, and telephone numbers for emergency purposes.

C. Should the parents’ vacation/travel dates conflict, FATHER shall have preference for his dates in the ODD-NUMBERED (2021, 2023) years and MOTHER shall have preference for her dates in the EVEN-NUMBERED years (2020, 2022).

D. When either parent plans to travel outside of the State of California for overnight or longer during their parenting time, a contact phone number and destination shall be provided to the other parent.

E. Any vacation outside the United States requires prior written notice to and consent of the other parent or a court order.

6. TRANSPORTATION/EXCHANGES

A. Only a licensed and insured driver will drive the children. The vehicle must have legal child restraint devices.

B. If the parents cannot choose a mutually agreeable exchange location, FATHER and MOTHER, or their agreed adult designee, shall pick up and drop off the children at the curbside of the other parent’s home by the receiving parent when the exchanges do not take place at the minor children’s school.

C. The parents shall not use the exchange times to discuss conflicts pertaining to the children, their own adult disputes or their court case.

7. TELEPHONE/AUDIO-VIDEO COMMUNICATION GUIDELINES

A. The children may have telephone/audio-video access to the parents at reasonable times and for a reasonable duration.

B. Each parent may have telephone/audio-video access to the children at reasonable times and for a reasonable duration.

C. Neither parent nor any other third party may listen to or monitor the calls.

8. ADDITIONAL PROVISIONS

A. Childcare

1) The children must not be left alone without age appropriate supervision.
2) The parents must let each other know the name, address and phone number of the children’s regular childcare providers.

B. Children’s clothing and belongings

1) Each parent will maintain clothing for the children so that the children do not have to make the exchanges with additional clothing.

9. RESTRAINTS ON CONDUCT

A. No Use of Children as Messenger. The parents will communicate directly with each other on matters concerning the children and may not use the children as messengers between them.

B. No Negative Comments. Neither parent will make, nor allow others to make, negative comments about the other parent or the other parent’s past or present relationships, family, or friends within hearing distance of the children.

C. No Parental Alienation. Each parent is enjoined and restrained from saying anything or doing anything, which might tend to alienate the affection of the minor child for the other parent or allowing any third person to do so.

D. Detriment to the Children. Both parents are enjoined and restrained from doing anything, and permitting any third person from doing so, that would be detrimental to the health, safety, morals, or welfare of the children.

E. No Exposure to Secondhand Smoke. The children will not be exposed to secondhand smoke, including but not limited to cigarettes, marijuana, hookah, or vaping. The children will not be exposed to any form of secondhand smoke while in the home or car of either parent.

F. No Corporal Punishment. Each parent is enjoined and restrained from inflicting corporal (physical) punishment of any kind on the children or permitting any third person to do so.

G. Discussing the Case. Neither parent shall discuss the business of this case with the children, nor permit any third person to do so, except in the presence of a therapist.

10. The terms and conditions of this order may be added to or changed as the needs of the children and parents change. Such changes will be in writing, dated and signed by both parents; each parent will retain a copy. Unless the changes are filed in court, the changes may not be enforceable. If the parents want a change to be a court order, it must be filed with the court in the form of a court document.

11. Family Code, section 3048(A) Findings:

A. This court is the court of proper jurisdiction to make child custody orders under the UCCJEA;

B. The responding parent was given notice and an opportunity to be heard; a clear description of the legal and physical custody rights of each party is contained in this order;

C. The country of habitual residence of the children is the United States of America.

12. The parties herein agree that a Court Commissioner or Temporary Judge may sign this Stipulation and Order.

13. The parties herein agree that a signature appearing via electronic transmission may have the same full force and effect as an original signature.

APPROVED AS TO FORM AND CONTENT:

DATE: ______________

________________________________
Mother/Father

DATE: ______________

________________________________
Mother/Father

Child Custody and Visitation Agreement stipulation-free-draft-template-example.pdf

Child Custody and Visitation Agreement stipulation-free-draft-template-example.docx

Notice: Please contact family law attorney, Colleen Sparks, to advise you of your rights upon an assessment of the facts in your case before using this agreement. 


3 Tricks to Terminate a Student Lease at UCR due to Coronavirus Force Majeure [UC Riverside]

How to Terminate Your Lease at University Village Towers, GrandMarc At University Village, University Riverside Gardens, The Palms on University, & Highlander At North Campus at UC Riverside As the official, volunteer landlord-tenant lawyers for the Associated Students of UC Riverside Legal Clinic, we have been inundated with questions from UCR students who signed leases...

Coronavirus Lease Termination Letter Sample Form Contract Breach

How to Terminate Your Lease at University Village Towers, GrandMarc At University Village, University Riverside Gardens, The Palms on University, & Highlander At North Campus at UC Riverside

As the official, volunteer landlord-tenant lawyers for the Associated Students of UC Riverside Legal Clinic, we have been inundated with questions from UCR students who signed leases near the UCR campus where no classes are being held in Fall 2020 due to the Coronavirus pandemic. We have numerous strategies to provide to these students during this unusual, global event.

First, this post is primarily directed at students who signed their leases prior to the State of Emergency that was declared nationally on March 13, 2020. Those who signed their leases after this date will have a more difficult time alleging that the pandemic is an unforeseen circumstance. Nonetheless, it may still be unforseen that an entire college campus is now closed.

1) Offer the Landlord a Lump Sum for Termination

The most common technique to terminate a lease is to offer the landlord a lump sum of money in exchange for termination. Commonly, this involves the rental deposit plus two or perhaps more months of rent. This allows the landlord to re-let the property to hopefully mitigate their damages or even double collect if they can find a new tenant in a short period of time. However, it seems doubtful right now that the landlord will find a new tenant, at least while the campus remains closed and they require tenants to be students.

We have a letter online that you can use to draft your request for lease termination.

2) Don’t Pay Your Rent

Another common strategy is to not pay the rent that you believe should be paid given the frustration of purpose under California law resulting from the Coronavirus pandemic. Often times, creditors who understand that the debtor/tenant knows their rights and is not afraid to withhold payment will offer a better deal.

One downside is that the landlord may try to ding your credit report. However, it may be years until your credit score makes any difference, e.g. if you try to buy a home.

They may also try to obtain a civil money judgment against you. However, landlords are probably hesitant to file a civil suit given the obvious Coronavirus defenses to breach of contract that may be raised as well as the public relations issues related to suing students under these circumstances.

The bottom line is that you should not pay a creditor if you don’t have the money. You  you may want to prioritize your basic living expenses first.

Note that landlords are prohibited from filing an unlawful detainer right now due to the emergency Rules or Court in California absent showing a health and safety violation. This means they cannot change your locks or otherwise kick you out until the Rules of Court are changed.

3) Turnover the Keys

If you’re not coming back, it may be wise to turnover the keys. This creates a defense that the landlord must take reasonable steps to mitigate their damages. This defense may make the landlord hesitant to file suit given the expense of this defense.

With regard to Grandmark, Highlander at North Campus, UV Towers, and the Palms, students are welcome to try these strategies to obtain a better result than paying the full rate for a room they don’t need.

This post is written by real estate attorney in Riverside Scott Talkov as part of Talkov Law’s commitment to pro bono service.

Thanks to Riverside City Councilman Andy Melendrez and students at UCR for inspiring this post.


In re Brace: Is Your House Community or Separate Property in California Divorce and Bankruptcy Court?

Will the Court Find that Your House is Community Property or Separate Property Based on the Presumptions from In re Brace (California Bankruptcy and Family Law Court)? In re Brace (2020) California Supreme Court, July 23, 2020 – Case No. S252473 The California Supreme Court in In re Brace (Speier v. Brace) has come down...

family law attorney property division divorce lawyer bankruptcy riverside california

Will the Court Find that Your House is Community Property or Separate Property Based on the Presumptions from In re Brace (California Bankruptcy and Family Law Court)?

In re Brace (2020) California Supreme Court, July 23, 2020 – Case No. S252473

The California Supreme Court in In re Brace (Speier v. Brace) has come down with a new published opinion purporting to help family law litigants and bankruptcy litigants alike, answer the question: is the house community or separate property?

Many married couples in California use community property funds to acquire real estate and take title in joint tenancy. Does that property presumptively belong to the community because the couple acquired the property during marriage with community funds? Or is the property presumptively the separate property of each spouse because they took title in joint tenancy? This issue can arise when parties seek a property division attorney in California or after one spouse uses a bankruptcy attorney to discharge their debts, which is followed by the bankruptcy trustee trying to sell the house of the debtor or non-debtor spouse.

Unfortunately, “California’s treatment of joint tenancies has a long and tortuous history and is still the subject of considerable legal concern and disagreement.” (Blumberg, Community Property in California (1987) p. 157.). The Legislature enacted a presumption that characterizes this property as community in a divorce (Family Code § 760); however, the presumption established by Evidence Code § 662-the owner of the legal title to property is presumed to be the owner of the full beneficial title-seems to be directly at odds with Family Code § 760. This dichotomy in the law has been the source of much debate in the family law and bankruptcy communities, as a “snarl of conflicting presumptions.” (Estate of Luke (1987) 194 Cal.App.3d 1006).

In this particular case, husband filed a Chapter 7 Bankruptcy in 2011. Husband and wife married in 1972, and during their marriage, the couple acquired a residence in Redlands and a rental property in San Bernardino. The Braces acquired both properties with community funds and took title to each property as “husband and wife as joint tenants.”

A Chapter 7 bankruptcy petition creates an estate to satisfy creditors’ claims. The estate generally includes “[a]ll interests of the debtor and the debtor’s spouse in community property” at the time the bankruptcy case is filed. (11 U.S.C. § 541(a)(2).) The Bankruptcy Code specifies that community property is part of the estate and bankruptcy courts look to state law to determine what property is considered community. (See Butner v. United States (1979) 440 U.S. 48, 54, 99).

The bankruptcy trustee sought a declaration that the Redlands and San Bernardino properties were community property under Family Code § 760. The distinction between community and separate property matters in this case because wife did not join in her husband’s bankruptcy petition.

property division lawyer california bankruptcy divorce riverside family law attorneyIf the properties are community, then the entirety of the Braces’ interests in the properties becomes part of husband’s bankruptcy estate. If the properties are separate, then only husband’s one-half property interest becomes part of the estate. (In re Reed (9th Cir. 1991) 940 F.2d 1317, 1332; see Code Civ. Proc. § 704.820). The bankruptcy court found that “the properties were acquired by the couple during the marriage with community assets and they presumptively constitute community property under applicable law. The Braces failed to establish that the… [p]ropert[ies] were not community in nature and, therefore, they constitute property of the Estate…” (In re Brace (Bankr. 9th Cir. 2017) 566 B.R. 13, 17.) The Ninth Circuit Bankruptcy Appellate Panel affirmed the finding reasoning that, pursuant to In re Marriage of Valli (2014) 58 Cal.4th 1396, which held that property acquired during marriage from a third party with community funds is community property upon divorce unless the statutory transmutation requirements have been met, the public policy and statutory construction support the extension of Valli’s holding to the bankruptcy context. The Braces appealed to the Ninth Circuit, which certified the question to the California Supreme Court (Case No. S252473).

On July 23, 2020, the California Supreme Court published its opinion in answer to the question above, as well as the following question: “When a married couple uses community funds to acquire property as joint tenants, is the joint tenancy deed alone sufficient to transmute the community character of the property into the separate property of the spouses?”

Family Code Section 852 provides that for property acquired on or after January 1, 1985, a transmutation “is not valid unless made in writing by an express declaration that is made, joined in, consented to, or accepted by the spouse whose interest in the property is adversely affected.” We hold that under this rule, joint tenancy titling of property acquired by spouses using community funds on or after January 1, 1985 is not sufficient by itself to transmute community property into separate property. For joint tenancy property acquired between January 1, 1975 and December 31, 1984, the act of taking title as joint tenants is, in itself, insufficient to prove a transmutation; however, a court may consider the manner of taking title in determining whether the spouses had an oral agreement or common understanding. Finally, as noted, joint tenancy property acquired with community funds before January 1, 1975 is presumptively separate property.

Evidence Code § 662 Does Not Apply to Property Acquired During Marriage When it Conflicts with Family Code § 760

…we hold that the community property presumption in Family Code § 760 applies not only to dissolution actions but also to a dispute between one or both spouses and a bankruptcy trustee, and that Evidence Code § 662 does not apply when it conflicts with the Family Code § 760 presumption. In re Brace (July 23, 2020) Case No. S252473 (citation forthcoming).

This finding provides clarity on the battle of presumptions under the particular circumstances enumerated above, but the holding does nothing to prevent spouses from holding separate property as joint tenants or from transmuting community property into separate property held in joint tenancy as long as the applicable transmutation requirements are met. Further, the holding has no affect on the operation of the right of survivorship that typically accompanies joint tenancy title at death.

For joint tenancy property acquired with community funds on or after January 1, 1985, a valid transmutation under California law from community property to separate property requires a written declaration that expressly states that the character or ownership of the property is being changed pursuant to Family Code § 852 (a). A deed declaring that property is held in joint tenancy, by itself, does not suffice to transmute the property into separate property held in joint tenancy.

Consult an Experienced Divorce and Bankruptcy Attorney to Obtain the Best Result

The principles discussed in the article are inherently complex, involving large sums of money and oftentimes, the roof over your head. Whether you are dealing with the possibility of the sale of real property in family court, dividing assets and debts, or if you just have questions for a divorce attorney or a bankruptcy attorney, contact a skilled California family law attorney to help guide you through the process. Our attorneys have litigated support cases throughout the State of California, including Riverside, Los Angeles, Orange and San Bernardino counties. Call the experienced bankruptcy and family law attorneys at Talkov Law at (951) 888-3300 or contact us online for a free consultation about your case.


Has Thomas P. Riley Filed More Boxing Piracy Lawsuits Than Any Other Attorney?

If you just received a letter in the mail from Thomas P. Riley, you may be wondering: Who is this guy, and why is he exaggerating or making false allegations that my business illegally displayed a boxing match?

Thomas P Riley Attorney California Boxing Piracy Lawsuit Complaint Letter

Have You Received a Letter From Attorney Thomas P. Riley?

If you just received a letter in the mail from Thomas P. Riley, you may be wondering: Who is this guy, and why is he exaggerating or making false allegations that my business illegally displayed a boxing match available on pay-per-view or a streaming service?

Well, you’re not alone! In just the Central District of California, covering Los Angeles County, Orange County, Riverside County, San Bernardino County, Ventura County, Santa Barbara County and San Luis Obispo County, Mr. Riley has filed a staggering 2,834 cases, all on behalf of boxing promoters claiming illegal showings of their boxing matches.

DAZN App – Boxing Piracy

Nationwide, the number is a staggering 5,227 as of the writing of this blog post, and probably even more by the time you read this! We conducted some statistics on this mind-boggling number of federal cases relating to alleged piracy of boxing events, generally pay-per-view or modern streaming services, such as the DAZN and FITE app.

Thomas P. Riley Only Litigates the Issue of Boxing Piracy

For starters, virtually every case filed by Thomas P. Riley relates to the same issue of piracy.

Type of Lawsuit Number of Cases filed by Thomas P. Riley
Cable/Sat TV 3033
Other Statutory Actions 2150
Copyrights 23
Consumer Credit 5
Other Civil Rights 4
Other Personal Property Damage 2
Bankruptcy Case 2
Unknown 1
Recovery of Overpayment & Enforcement of Judgment 1
Other Contract 1
Racketeer Influenced and Corrupt Organization 1
Constitutionality of State Statutes 1
Bankruptcy Adversary 1
Grand Total 5222

Thomas P. Riley Boxing PiracyThomas P. Riley’s Clients Are Almost Entirely Boxing Promoters with Pay-Per-View or Streaming Apps

Client/Plaintiff Number of Cases Filed by Thomas P. Riley
J & J Sports Productions, Inc. 2957
Joe Hand Promotions, Inc. 886
Kingvision Pay-Per-View, Ltd. 420
G & G Closed Circuit Events, LLC 319
Garden City Boxing Club, Inc. 190
Event Entertainment, Inc. 151
Innovative Sports Management, Inc. 127
Top Rank, Inc. 46
Integrated Sports Media, Inc. 37
DirecTV, Inc 30
New Contenders, Inc. 28
National Satellite, Inc. 13
Circuito Cerrado, Inc. 9
Main Events/Monitor Productions 7
Traffic Sports USA 2
Prostar, Inc. 2
Don King Productions, Inc. 2
GoBox Promotions, Inc. 1
Grand Total 5227

Thomas P. Riley Has Been Filing These Lawsuits since 1994, and Shows No Sign of Stopping

Year Cases Filed by Thomas P. Riley
1994 2
1995 5
1996 75
1997 6
1998 195
1999 375
2000 144
2001 23
2002 72
2003 118
2004 81
2005 57
2006 36
2007 49
2008 200
2009 381
2010 745
2011 507
2012 589
2013 515
2014 382
2015 227
2016 112
2017 101
2018 82
2019 73
2020 75
Grand Total 5227

Thomas P. Riley Files Federal Lawsuits Mostly in California, Arizona, and Pennsylvania, as well as Texas, Arkansas, New York and Elsewhere

Federal Court Cases Filed by Thomas P. Riley
cacdc 2840
candc 602
caedc 480
azdc 446
casdc 328
paedc 275
txsdc 59
aredc 46
arwdc 26
pamdc 22
nyedc 21
insdc 17
pawdc 15
nedc 8
moedc 7
inndc 6
nysdc 4
nywdc 4
wiedc 3
akdc 2
almdc 2
alndc 2
alsdc 2
cacbk 2
tnwdc 2
casbk 1
ilndc 1
nvdc 1
okwdc 1
paebk 1
tnmdc 1
Grand Total 5227

Every Lawsuit Thomas P. Riley Has Filed

In case you’re curious, we’re releasing our full data set obtained through the Federal court system (PACER) for your review. Suffice to say, Thomas P. Riley is prolific in his litigation efforts.

To access Riley’s full data set as a Microsoft Excel file, please click here: Thomas P Riley Cases.

If you’ve received a letter or lawsuit from Thomas P. Riley, contact an experienced business attorney to advise you of your rights.


3 Secrets to Proving Self-Employed Income for Child or Spousal Support in California – In re Marriage of Deluca & Hein

The Tricks and Tips to Proving Self-Employed Income for Spousal Support (Alimony) and Child Support That Your Ex Doesn’t Want You To Know Walking into a family law courtroom and swearing up and down that your ex-spouse or parent of your child makes more money than he/she claims is easy enough; but I have yet...

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The Tricks and Tips to Proving Self-Employed Income for Spousal Support (Alimony) and Child Support That Your Ex Doesn’t Want You To Know

Walking into a family law courtroom and swearing up and down that your ex-spouse or parent of your child makes more money than he/she claims is easy enough; but I have yet to see a court order that reads: “Party A shall pay Amount X to Party B as and for support each month because Party B is 100% sure Party A makes a lot of money, and Party B seems pretty cool, so I’m just going to go with it.”

Family court in California may get a bad reputation for being loose with the rules as a court of equity, but if you plan to contest the opposing party’s claims regarding his/her income, you will quickly learn that even family court still requires a little thing called evidence.

How Do I Prove the Opposing Party’s Income When They Own Their Own Business?

This issue is highly litigated in California family courts, and the laws relating to the issue are continually changing. So far in the year 2020, two (2) major cases have come down affecting how income from self-employment is treated in California family courts in the context of spousal and child support: In re Marriage of Deluca (2020) 45 Cal.App.5th 184 and In re Marriage of Hein (Jul. 21, 2020) Case No. F076581 (citation forthcoming).

Whether these cases have made it easier for litigants, courts, and attorneys to calculate support is an issue for another day. The fact remains, these new cases (along with other landmark cases decided in recent years), provide the current landscape of the law in this area.

Three Common Points of Contention When One Party is Self-Employed in Family Law

family-law-attorney-lawyer-california-inland-empire-divorce-riverside_1) Depreciation Deductions on Income Tax Returns

To start, Asfaw v. Woldberhan (2007) 147 Cal.App.4th 1407 provided a rather lengthy analysis of the issue of whether depreciation of rental property is deductible in calculating child support. That court began its analysis with the underlying premise that the amount of child support to be paid is determined by a formula, the components of which require the computation of each parent’s annual gross income and annual net disposable income. (Mejia v. Reed (2003) 31 Cal.4th 657, 669).  Annual gross income is generally defined in Section 4058 as “income from whatever source derived.” (In re Marriage of Henry (2005) 126 Cal.App.4th 111, 118). Net disposable income, in turn, is computed by deducting from annual gross income amounts actually attributable to certain specified expenses. (Cal. Fam. Code § 4059).

The Asfaw court went on to identify various indicators the Legislature has placed in the Family Code which provide insight into the underlying principles of child support in California. In its broadest formulation, “California has a strong public policy in favor of adequate child support.” (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 282-283) More specifically:

  • “The guideline seeks to place the interests of children as the state’s top priority.” (Cal. Fam. Code § 4053 (e))
  • “A parent’s first and principal obligation is to support his or her minor children according to the parent’s circumstances and station in life.” (Cal. Fam. Code § 4053 (a))
  • “Each parent should pay for the support of the children according to his or her ability.” (Cal. Fam. Code § 4053 (d))
  • “Children should share in the standard of living of both parents. Child support may therefore appropriately improve the standard of living of the custodial household to improve the lives of the children.” (Cal. Fam. Code § 4053 (f))

Family Code Section 4058 & 4059 – Calculating Gross and Net Income in Family Court for Depreciation Deduction

Whether depreciation is deductible in calculating net disposable income implicates essentially an income statute (§ 4058), and an expense statute (§ 4059).

The inquiry begins with Section 4059 since its “net disposable income” is an element of the actual child support formula. Section 4059 lists a number of items that are to be deducted from annual gross income in determining net disposable income: tax payments, FICA contributions, union dues and retirement benefits, health insurance premiums, other child support, job-related expenses, and hardship deductions. Depreciation does not fall within any of these categories, thus, if statutory support for the deduction of depreciation is to be found, it must come from that part of section 4059 which refers to “annual gross income.” The inquiry thus turns to Section 4058, for it is there that “annual gross income” is given meaning.

With one exception, Section 4058 defines “annual gross income” as “income from whatever source derived.” It identifies “rents” as one of 16 examples of income (§ 4058 (a)(1)).  Also relevant is subdivision (a)(2) which states that income includes: “Income from the proprietorship of a business, such as gross receipts from the business reduced by expenditures required for the operation of the business.” There is no mention of depreciation.

From this scheme, it is clear that depreciation is not a “[j]ob-related expense” (§ 4059 (f)). This category appears to be reserved for those expenses actually incurred by an employee (Stewart v. Gomez (1996) 47 Cal.App.4th 1748, 1755 [tools, uniforms, on-the-job parking expenses, transportation and mileage for commuting to and from work, and other un-reimbursed costs that would not be incurred but for employment]).

Since rental income is expressly included as “annual gross income” under Section 4058 (a)(1), and business operating expenditures are deductible under Section 4058 (a)(2), the final question is: Does depreciation of rental property constitute an “expenditure required for the operation of this business?”

Although “income” is broadly defined in the statutory child support scheme, deduction provisions are specific and narrowly construed. The Legislature’s choice of the words “expenditure,” “required,” and “operation of the business” in Section 4058 are words of limitation. “Expenditure” suggests an actual outlay of cash or other consideration. Depreciating an asset does not involve a reduction of cash available for child support. Nor is depreciation “required” for the operation of a business. A proprietor cannot operate a business without inventory, without employees, without paying taxes, and so forth. A business can be conducted without a deduction for depreciation. Therefore, the Asfaw court concluded that “operation of the business” means ordinary and necessary business expenditures directly related to or associated with the active, day-to-day conduct of a business.

Following the Asfaw case, in 2018 the California Appellate Court rocked the family law community with In re Marriage of Rodriguez (2018) 23 Cal.App.5th 625, 635. In the decision, the Rodriguez court held that a self-employed parent’s depreciation deductions for motor vehicles did not constitute “expenditures required for the operation of the business” for purposes of Cal. Fam. Code § 4058 (a)(2). The Rodriguez court affirmed the order by the Superior Court of Stanislaus County directing the husband to pay wife child support for their three children. The Rodriguez court held that the trial court properly followed the Asfaw case by disallowing husband’s deduction of depreciation because depreciating an asset did not reduce available cash for child support, and asset depreciation was not among specific deductions permitted by statute (Cal. Fam. Code §§ 4058, 4059).

What was the factual analysis provided by the Rodriguez court? Good question. So what in the world does the Rodriguez decision mean? Are all business depreciation deductions disallowed? Is the decision limited to auto depreciation deductions? Or is the finding specific to disallowing this depreciation deduction for Mr. Rodriguez?

It is with the Asfaw and Rodriguez decisions in mind that the California Appellate Court made its recent findings in the Hein case.

In re Marriage of Hein (2020) – Business Depreciation Deductions May be Disallowed

In this case, the Fifth District clarified some of the questions that the Rodriguez case created regarding a self-employed parent’s depreciation deductions.

On appeal, the wife contends that the trial court did not properly determine the husband’s annual gross income under Family Code Section 4058 and thus erred in calculating the amount of child support owed. After the trial court issued its decision, the Court of Appeal decided the question of statutory construction involving depreciation in the Rodriguez case. In Rodriguez, the court held that a self-employed parent’s depreciation deductions for motor vehicles did not constitute expenditures required for the operation of the business for purposes of section 4058, subdivision (a)(2).

The Hein court extended the statutory interpretation for motor vehicles to depreciation deductions for equipment and other assets used in the self-employed parent’s businesses. The court explained that the term “expenditures required for the operation of the business” for purposes of Section 4058 (a)(2) describes an actual outlay of cash. The court held that claiming a depreciation deduction on an income tax return does not require an outlay of cash and, thus, does not reduce the funds available for child support.

This appeal raises issues about a self-employed parent’s annual gross income for purposes of determining child support under the statewide guideline. The mother contends the trial court did not properly determine the father’s annual gross income under Family Code section 4058(1) and, thus, erred in calculating the amount of child support owed. First, the trial court allowed the depreciation deductions claimed on the federal income tax returns of the father and his corporations to reduce his income available for child support. Second, the court presumed the income and expenses reported on the father’s individual and corporate tax returns were correct and, thus, assigned the mother the burden of proving the reported amounts were incorrect.

Stated from another perspective, we do not conflate (1) the outlay of money used to purchase a capital asset with (2) the accounting entries, such as depreciation, that occur after the acquisition of the asset and do not involve the actual outlay of funds in future years.

What this court is saying is that, especially beginning in year two and moving forward, the depreciation is artificial and is not deductible for purposes of calculating support because the items were acquired previously. It is an artificial paper deduction, not funded in cash outlay.

Note: The Hein decision did not address the issue of a Section 179 depreciation deduction (26 U.S.C. § 179). Section 179 allows a massive $1,000,000.00 depreciation deduction for one year as an income tax incentive to buy equipment. It is a tax deduction for actual expenditures in the year of claiming, and not based on economic reality (See Imputing Income to a Parent or Spouse via California Family Code 4058).

The Hein court further recognized the limited application of its decision in footnote 11: “Should the Legislature attempt to clarify a parent’s income from the proprietorship of a business, greater clarity would be achieved if, in addition to address the treatment of depreciation, the subjects of (1) capital expenditure and (2) principal payments on third party debt used to acquire a capital asset were addressed.”

The Hein decision went on to make a largely agreeable decision regarding another hotly contested issue when calculating support in family court when one party is self-employed.

2) To Establish the Burden of Proof, There May be No Rebuttable Presumption That Tax Returns Are Correct

The misnomer that a rebuttable presumption that the gross income on most recent tax returns is correct was found in the case, In re Marriage of Loh (2001) 93 Cal.App.4th 325, which found that: “A parent’s gross income, as stated under penalty of perjury on recent tax returns, should be presumptively correct. (See In re Marriage of Scheppers (2001) 86 Cal.App.4th 646, 650, 103 Cal.Rptr.2d 529 [‘Although federal law is not conclusive on the interpretation of section 4058, it is persuasive….’].) Returns are, after all, ultimately enforced by federal and state criminal penalties. Hence it is not surprising that tax returns are the core component of determinations under the guideline formula.”

However, the Hein court clarified this misnomer as follows: “In Loh, the court’s statement that ‘[a] parent’s gross income, as stated under penalty of perjury on recent tax returns, should be presumptively correct’ (Loh, supra, 93 Cal.App.4th at p. 332) was dicta because none of the father’s post-separation income tax returns were part of the record. As a result, Loh is not authority for the principle that gross income declared on an individual income tax return is correct, much less that the corporate income tax returns of a C corporation and an S corporation owned entirely by a self-employed parent are presumed correct. (See Riverside County Sheriff’s Dept. v. Stiglitz (2014) 60 Cal.4th 624, 641 [it is axiomatic that cases are not authority for propositions not considered].) ”

On the question of the burden of proof and the rebuttable presumption that the gross income stated on a parent’s tax returns is correct, the Hein court concluded such a presumption, if it exists, does not extend to the tax returns in this particular case. Here, the self-employed father’s businesses are organized into two wholly owned corporations (one taxpaying entity and one flow-through entity), the corporations’ operations are intertwined, and their total assets exceed $5 million. In such circumstances, the burden of proving that the expenses claimed on the tax returns constitute “expenditures required for the operation of the business[es]” is properly allocated to the self-employed parent who controls the corporations.

The Hein court concluded,

…the policy that seeks to advance children’s interest and considerations of fairness to the parents who are litigating the issue weigh in favor of giving Martin the burden of proof on the question of his business income and expenditure under section 4058 subdivision (a)(2). This conclusion recognizes that ‘a spouse who is the owner of a successful business and who has control of his or her income can structure income and the payment of expenses to depress income.’ (In re Marriage of Chakko (2004) 115 Cal.App.4th 104, 109.)… We conclude that considerations of public policy and fairness, informed by the judicial system’s experience in the cases involving the income and business expenses of a self-employed party, weigh in favor of assigning Martin the burden of proof on the factual questions that must be resolved to determine his business income and expenditures under section 4058 subdivision (a)(2).

3) Deductions for Principal Payments on Business Debt Are Sometimes Allowed

The relevant issue raised in In re Marriage of Deluca (2020) 45 Cal.App.5th 184, is the husband’s contention that the trial court erred by failing to reduce his income available for spousal support by the amount of monthly loan principal payments he is required to make on his income-producing properties. He argues the court abused its discretion by “imputing” the amount of his monthly loan payments to him as “phantom income” and awarding wife monthly spousal support of $7,500, despite finding that the maximum monthly income available to him to support the children after making his loan payments was $7,281.

The applicable question raised on appeal is whether a trial court should deduct principal payments a spouse makes on business loans—including loans secured by income producing property—from income available for spousal support.
In the published portion of the opinion, the Deluca court reversed the spousal support award and directed the trial court to reconsider the amount of support after determining the extent to which husband’s loan principal payments reasonably and legitimately reduce his income for purposes of support. The Deluca court found that the trial court committed reversible error when it failed to consider the statutory spousal support factor pertaining to obligations and assets, including the separate property, of each party; this factor was particularly important because husband’s net worth was vastly greater than wife’s, due largely to his real property assets (Cal. Fam. Code § 4320 (e)).

Consult an Experienced Child and Spousal Support Attorney to Obtain the Best Result

The principles discussed in the article are often complex, involving large sums of money. If you have questions for a child support attorney or a spousal support attorney, contact a skilled California family law attorney to help guide you through the process. Our attorneys have litigated support cases throughout the State of California, including Riverside, Los Angeles, Orange and San Bernardino counties. Call the experienced family law attorneys at Talkov Law at (951) 888-3300 or contact us online for a free consultation about your case.


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