New Case Law – Lump Sum Spousal Support

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 April 15, 2009, the Court of Appeals ruled in the case of McLauchlan and McLauchlan.

Husband appealed from the trial court’s ruling in his divorce with regard to the division of property and the award of spousal support to his ex-wife.

As part of the division of assets, the court awarded the “Butte Falls” property to wife provided that she could come up with a plan to refinance the property in order to pay to husband his equalizing judgment. On appeal, husband argued that the trial court did not have the authority to incorporate wife’s refinance plan into the divorce judgment, and that the trial court should have ordered the property sold rather than awarding it to wife. At issue was husband’s claim that wife, and thus the trial court, undervalued the property at trial. The court of appeals held that husband did not property preserve the error at the trial court level because he did not argue that the court lacked authority to do what it did and further that husband had the opportunity to present evidence regarding the value of Butte Falls but did not.

With regard to spousal support, the trial court ordered that husband pay spousal support to wife and reduced the amount of support to a “lump sum present value.” Husband disagreed witht both the amount and the reduction to a present value. Despite the fact that wife agreed with husband that it was error for the trial court to provide for a lump sum present value for spousal support, the court of appeals held that the parties misunderstand the law and that the trial court acted properly.

ORS 107.105 provides that a divorce judgment may provide for spousal support both “in gross or in installments or both.” The trial court awarded wife $1,000 per month for a period of five years and also provided that as part of the refinance of Butte Falls, she can deduct $54,000 (which the court deemed as the present value of the spousal support award). The court of appeals held that it was proper for the trial court to provide for alternative awards, both of which are proper under the terms of the statute.

The entire opinion can be viewed here: http://www.publications.ojd.state.or.us/A134002.htm

The lawyers, including Daniel Margolin, who focuses part of his pratice on family law appeals, at Stephens & Margolin LLP can assist you with your family law questions. As this case shows, it is crucial to have a competent attorney at both the trial court and appellate level. If you have any questions about Oregon appellate law please contact Daniel Margolin or C. Sean Stephens at Stephens & Margolin LLP

About Daniel Margolin

Daniel Margolin is a founding partner of Stephens & Margolin LLP and a Portland, Oregon native. His practice focuses on all aspects of family law litigation. Dan applies his litigation expertise to provide additional expertise when assisting clients with Family Law Appeals and Collaborative Divorce matters. To find out more or contact Daniel Margolin, visit Stephens & Margolin LLP
This entry was posted in Appeal, Dissolution, Divorce, Legal Developments, Property Division, Spousal Support and tagged , . Bookmark the permalink.

3 Responses to New Case Law – Lump Sum Spousal Support

  1. Jim Giblin says:

    SPOUSAL SUPPORT MODIFICATION: I am a commercial real estate broker in a down market. My income is 100% commission based. I am looking for CASE LAW that would give precedent to paying support on an “as you earn” basis versus paying on a mandated fixed monthly basis, regardless of the fluctuating nature of my earned income. I would like to support the idea that my spousal obligation would be paid as a portion of commission once received. For example, 1/3 of commission would be due at time paid to me.

    • admin says:

      It would be very unusual for the court to order this arrangement in a contested hearing. Some parties stipulate to dividing a parties’ bonus if and when earned. Have you proposed the commission split to the opposing party in lieu of a monthly support obligation?

  2. Jim Giblin says:

    Not yet. I am trying to find some case law and/or a mediated agreement that stipulates paying support when income is earned. I am trying to find some leverage to support my argument. We are set for mediation in about a month. THE QUESTION: What assurances can I give the opposing party that I will make good on my obligation to pay 1/3 of my commissions in lieu of a monthly support obligation?

    The problem for me having to pay a fixed monthly obligation while earning 100% commissions is the potential of creating support arrearages that are in excess of statutory percentages of my anticipated income. This scenario creates debt that I can not afford to pay back.

    It seems reasonable to me to have the opposing party ride the income up with reasonable limits and ride it down with reasonable limits. I understand the argument that if I only pay as I earn there is that potential of earning zero and that I my support obligation would be zero. In my industry there have been years when I earned zero.

    ANY SUGGESTIONS WOULD BE DEEPLY APPRECIATED!!

Leave a Reply

Your email address will not be published. Required fields are marked *