Child Custody

Family Code Section 3022 provides the court with authority to make an order for the custody of a minor child that seems necessary and proper during the pendency of a proceeding or at any time thereafter. California family law courts use Family Code Section 3040 to establish the order of preference in granting custody in divorce actions. The first section of this code provides that “Custody should be granted in the following order of preference according to the best interest of the child as provided in Sections 3011 and 3020.”

Parties involved in a custody dispute would be wise to review Family Code Sections 3011 and 3020. After all, since these two sections outline the criteria that California judges use when determining custody disputes, parties to such actions should consider what facts apply to these code sections. If there are facts that do not apply to the criteria that judges use, they may not be relevant. Focusing on irrelevant facts may distract the Court from focusing on relevant facts that will help carry the day. Attorneys who exclusively practice in the area of family law will know how to take unique facts of individual custody disputes and demonstrate to the Court how those facts apply to the factors found in Sections 3011 and 3020.

Business Valuation & Division

Business valuation can be best described as an exercise in creative accounting. In determining a business value, California courts generally utilize an excess earnings method. This method involves a two-step process. First, the court looks to the tangible assets of the business. Assets encompass anything from furniture, automobiles, and even accounts receivables that have yet to be collected. Discounts can be given for various factors (i.e. depreciation, collectability of an account receivable). Second, the court looks to the goodwill of the business. Goodwill generally involves an analysis of business earnings (salary + perquisites) multiplied by a capitalization rate. The capitalization rate usually depends on the type of business and its stability, or lack thereof. Once the net asset and goodwill figures are determined, the court will usually end up adding the two figures.

California case law has held that only a business can have goodwill. If one is not engaged in a business, then there can be no goodwill to divide. In the 2005 California case of Mctiernan vs. Dubrow, husband, John McTiernan, a famous Hollywood director (Die Hard, The Hunt For Red October) successfully challenged a lower court’s ruling regarding the nature of his activities as a movie director. Once he was able to demonstrate that his activities were not akin to a business, the court of appeals held that goodwill could not possibly be attributed to his activities. Consequently, there was nothing to divide! This is an intense fact-based analysis. If you wish to prevail using a Mctiernan argument, be ready to put on your evidence.

Civil Discovery in Family Law

The Civil Discovery Act applies to Family Law proceedings. The Civil Discovery Act, as provided for in the California Code of Civil Procedure, helps prevent improper gamesmanship and “gotcha” litigation. In responding to formal discovery, the code requires parties to follow basic rules in providing clear and concise responses. Each and every section dealing with discovery demands outlines the process, the consequences of untimely and evasive responses, and provides the propounding party an opportunity to seek enforcement. When a party seeks to circumvent this process by failing to provide proper code compliant responses, the Court has wide discretion and authority to render appropriate orders to remedy the situation.