Tort and Contract Liability Flashcards
Separate Property
(1) When other spouse was a tortfeasor, the tort recovery is SP and (2) causes of action that arise after separation is the injured spouse’s SP
Otherwise, the tortfeasor spouse would benefit from his wrongful act
Community property
When damages are recovered from a third party, the tort recovery is CP
However, upon divorce or legal separation, the recovery will go entirely to the injured spouse so long as it can be traced and was not already spent
This is the rule UNLESS if the interests of justice, including economic need, require otherwise
Creditor’s Rights for Tort Liability Judgments
Generally, CP is subject to tort liability of either spouse
If spouse performing an act that benefits the community (e.g. driving to work, or driving kids in carpool), liability is FIRST satisfied from CP, and then from SP
BUT, if not acting on behalf of community (e.g. SP estate or driving to cheat), liability is first satisfied from Sp and then from CP. Other spouse’s SP is protected b/c no persona liability
management powers
Generally, each spouse has EQUAL management power and control over CP. Thus has power to buy or sell CP and contract debts w/o other spouse’s joinder or consent
Personal Belongings exception
Exception to general management rule. One spouse cannot sell or encumber personal property used in family dwelling (furniture, clothing, etc.) without written consent of other spouse
VOIDABLE by other spouse at any time
Business Exception
Exception to general management rule.
When a spouse operates a business interest that is all or substantially all community personal property. Spouse may act alone, but if sells, leases, or encumbers SUBSTANTIALLY ALL of the personal property in the business, must give written notice to other spouse
Conveyances and encumberances of Real CP
Generally, both spouses must join in executing any instrument by which community real property is sold, conveyed, or leased FOR MORE THAN A YEAR. Only the entire interest may be transferred or encumbered
Joinder of both spouses is required for valid transfer or encumbrance
Exception: spouse can unilaterally encumber 1/2 interest in real CP to pay for the family attorney representing her in a divorce action (gets a real property lien)
Creditor’s Rights for Contract Liability/Child Support
Equal management powers, thus can enter into contracts and incur debt
CP can be reached if debt was incurred during or BEFORE marriage. Not available after divorce however.
Exception: earnings of a nondebtor spouse CANNOT be reached for premarital debts if held in a separate account (where other spouse has no right of withdrawal) and not commingled with other CP funds
Misrepresentation of marital status in real property conveyances
Both spouses must join in executing any instrument by which community real property is sold, conveyed, or leased FOR MORE THAN A YEAR
If CP is titled in only one spouse’s name and that spouse misrepresents his marital status to an innocent transferee, other spouse has 1 YEAR SOL to bring an action to void the transfer
If bring action, must show she did not consent or participate in the action
Common Necessaries
Even after termination of economic community, unless there is a separation agreement providing otherwise, each spouse remains PERSONALLY LIABLE for debts incurred by the other spouse for the COMMON NECESSARIES of life (health, safety, food)
If common necessary, spouse’s SP, all CP, and the other spouse’s SP may all be liable
Approach to debt incurred before marriage
All CP and Debtor’s SP is liable for the debt incurred before marriage. Other Spouse’s SP is NOT liable.
Community entitled to reimbursement if CP used to pay off debt, to the extent SP was available
EXCEPTION: CP earnings of nondebtor spouse are NOT liable for debtor’s premarital debts so long as those earnings are held in a deposit account to which the debtor spouse has no right of withdrawal and no commingling has taken place
