Marriage of Lopez, In re
| Decision Date | 26 March 1974 |
| Citation | 38 Cal.App.3d 93,113 Cal.Rptr. 58 |
| Court | California Court of Appeals Court of Appeals |
| Parties | In re the MARRIAGE of Lee A. and Edith M. LOPEZ. Lee A. LOPEZ, Sr., Respondent, v. Edith M. LOPEZ, Appellant. Civ. 13610. |
Jack Halpin, Redding, for respondent.
John N. Bach, Chico, for appellant.
This is an appeal by the wife from an interlocutory judgment of dissolution of marriage. On appeal, wife urges the following procedural and substantive contentions:
1. The interest of the husband in his law firm as of the date of trial was all community property.
2. The trial court erred in failing to determine the value of husband's interest in the accounts receivable, goodwill and work in progress of his partnership law practice.
3. Wife's motion for inspection, audit and review of husband's partnership legal files should have been granted.
4. The trial court erred in granting husband's motion to defer the issue of wife's request for attorney's fees and costs until after the court's determination of the principal issues.
5. The trial court abused its discretion in its allowance of attorney's fees and costs to wife.
6. The trial court abused its discretion in determining the amount and duration of spousal support.
We conclude the trial court did err on several grounds and will acccordingly reverse and award wife costs.
Husband is an attorney, having received his law degree in 1952, passed the Bar Examination in October 1952 and was admitted to practice in California in January 1953. In June 1953 he received a Master's Degree in Law from New York University and two months later commenced the practice of law in Redding, California, as an associate in a law office of an established lawyer, at a salary of $300 per month. On January 1, 1955, without a capital contribution, husband became a 25 percent partner with the lawyer engaging in general practice. On August 8, 1957, while thus engaged in the practice of law, husband and wife were married.
On September 25, 1957, the law partnership was dissolved, and on October 1, 1957, husband opened his own law office as a sole practitioner. He brought into his practice some accounts receivable and cases in progress from the former partnership. In addition he invested the sum of $5,000 in his law office, and purchased some furniture, office equipment and law books. At the time of his marriage, husband owned free of debt a 1956 Oldsmobile, a boat, motor and trailer--all assets which he depreciated in his law practice. Following his marriage and during the first three months as a sole practitioner, husband grossed a total of $6,478.98, with expenses of $5,895.97, for a net income of $583.01.
During the ensuing years husband's law practice and earnings flourished. In 1958 he grossed $40,476.91 and his net income before taxes was $22,793.95; in 1959 his gross and net income before taxes were $54,282.69 and $30,414.61 respectively; in 1960, $61,830.82 and $31,178.25 and in 1961, $77,305.68 and $49,738.38. On January 1, 1962, husband formed a partnership with Willis Haines. Haines contributed no capital to the business, but received 25 percent of the profits. In 1962 the new partnership produced $99,106.85 in gross receipts and husband's share of the net income before taxes was $48,433.58; for the year 1963 the figures were $109,463.16 and husband's share was $49,826.11. The Lopez-Haines partnership was dissolved in April 1964. For the year 1964 the total gross receipts of the partnership plus husband's after-dissolution gross income amounted to the sum of $129,072.30 which provided the husband with a total 1964 net income before taxes of $58,806.07. From 1965 through 1969, husband practiced as sole owner of his law business with associates. His respective gross receipts and net income before taxes during those years were as follows: 1965--$167,872.72, $72,729.03; 1966--$177,259.67, $64,410.88; 1067--$200,608.71, $67,909.67; 1968--$261,831.58, $102,403.67; 1969--$243,478.61, $79,028.03.
On January 1, 1970, husband formed a law partnership with two of his associates, Donald R. Kennedy and Robert L. Srite, at which time Srite paid the sum of $53,500 cash for a 25 percent interest in husband's law practice. This cash was deposited in Account Nos. 12 and 4239 (4324), Bank of Redding, in husband's name. At the same time, Kennedy paid husband $13,500 in cash and executed an unsecured promissory note in the sum of $40,000 for the purchase of 25 percent of husband's law business. Documents entitled 'Agreement for the Sale of an Interest in Fixtures, Equipment, Library and Goodwill of a Law Practice,' dated January 1, 1970, were executed by husband and his new partners. Each agreement provided that husband sell an undivided 25 percent interest in and to the fixtures, equipment and law library to each partner for the sum of $1,224.32, respectively. A 25 percent interest in the law practice goodwill which husband sold to each of his new partners was valued at $52,275.68 in both agreements.
Concurrently, husband and his partners executed a partnership agreement which specified that the beginning capital of the partnership was $214,000 of which $209,895.72 was designated as goodwill. This agreement provided for a schedule of payments to be made to a partner withdrawing voluntarily, with no payment on return of capital investment if voluntary withdrawal occurred the first year (1970). Repayment of capital was provided in varying increments upon voluntary withdrawal by a partner during the ensuing five years.
The Lopez-Kennedy-Srite partnership produced gross receipts of $266,916.66 in 1970 and husband's net income before taxes was $81,508 for that year. For 1971, through the month of September, the partnership gross was $204,775.29 and husband's net income before taxes was $61,145.41.
During the trial, husband testified: Husband confirmed that there were no cash reserves in his law practice because of this conduct, and that the assets of his law practice consisted only of a library, office equipment and accounts receivable.
Wife left high school at the age of 16, did some office work prior to the marriage, but had no special job training. Before her marriage to husband, wife worked as a cocktail waitress in Redding. Her total wages for the tax year 1957 were $1,320 plus $168 in gratuities. At the time of the marriage of the parties, wife was 25 years of age. She had a minor daughter, born of a former marriage, which child was adopted by husband shortly after his marriage to wife. A son, born to the parties in December 1958, was at the time of the trial living with wife and his half-sister.
Since the marriage, wife has not been gainfully employed. She testified that she suffered various health problems, including a quiescent ulcer and degenerative changes to her cervical spine and thoracic spine, which could perhaps limit the kind of activities she might pursue.
During their marriage, husband and wife enjoyed a substantial and comfortable life style, which included expensive cars, home and vacations. Wife spent considerable money on clothes, accessories, fur coats and jewels. At the outset of their marriage the parties established a household budget of $750 per month, which was later changed to $475 cash deposited monthly in wife's personal checking account for her personal use for family food, a housekeeper and ironing lady. In addition, wife charged any items she felt necessary for herself, the children and husband. These charges, the house payments, taxes and insurance were paid by husband from another account. On this basis at the time of the separation of the parties, wife incurred expenses of about $1,000 per month.
During the course of the trial the parties stipulated to the market value of the community interest in various parcels of real property. The trial court among other things found the nature and net values of the community property of the parties to be as follows:
"Real Property
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1628 Orange Street residence $ (32.26)
4223 Alta Mesa residence 37,233.43
1616 West Street Law Office
Building 67,627.39
Hilltop property (1/3 interest) 21,666.66
Duck Club (1/6 interest) 7,750.00
Lakewood Manor lots 5,353.00
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Total $139,598.22
"Bank Deposits
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Bank of Redding, Account #1 $ 6,131.23
Bank of Redding, Account #6419 11,260.97
Bank of Redding, Account #4222 559.86
Bank of Redding Law Bldg
rental account 1,908.82
Wells Fargo Commercial (household) 500.00
United California Bank
((wife's) Personal) 413.94
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Total $ 20,774.82
"Notes
------------------------------------
Anne Byer (1/3 interest) $ 856.74
Fred Held 1,078.66
Westchester Bldg. 47,337.50
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Total $ 49,272.90
"Life Insurance (Cash Values):
------------------------------------
Prudential #32620853 $ 5,312.50
Prudential #33070902 3,170.00
Equitable #60370022 2,055.06
NSLI 906.05
Keogh Plan
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