Tort and Contract Liability

Question 1

Tort Recoveries

Answer 1

1. tort recovery is SP if the other spouse is the tortfeasor,
2. tort recovery is CP if a 3P is the tortfeasor
   i. however, the recovery is rewarded entirely to the injured spouse upon divorce or separation if it can be traced and was not already spent
   a. rule can be modified in the interests of justice, including economic need
   ii. upon either spouse’s death, the tort recovery is treated as CP

Question 2

Tort Liabilities

Answer 2

1. CP is subject to the tort liability of either spouse
2. if tortfeasor spouse was performing an act for the benefit of the community (ex. driving kids to school): tort creditor’s judgment is satisfied first from CP, then from SP
3. in other cases, tort judgment is satisfied first from SP, then from CP
4. in no case can the tort creditor reach the non-tortfeasor spouse’s SP

Question 3

Contracts: rule

Answer 3

contract creditors can reach CP, but not SP of the non-contracting spouse

i. either spouse can enter into contracts and incur debt
ii. i.e. opponents can recover in contracts made unilaterally with one spouse over any community property
iii. spouses have equal management powers.

Question 4

Contracts: Community Property

Answer 4

if contract made before the marriage, the CP can still be reached
i. earnings exception: the earnings of a non-debtor spouse cannot be reached for premarital debts if held in a separate account (in which the other spouse has no right of withdrawal) and not commingled with other CP funds

Question 5

Contracts: Separate Property

Answer 5

creditors generally cannot reach the SP of the non-contracting spouse

i. support exception: each spouse is personally liable for the other spouse’s contracts for necessities (in support of themselves and their children)
a. ex. recover from non-contracting spouse’s SP for medical bills of contracting spouse
ii. notes:
a. non-contracting spouse can be reimbursed from community estate if any
b. support exception applies applies until divorce
i) the duty to support spouses and minor children applies even if the spouses are separated

Question 6

Contracts: Awarded CP

Answer 6

after divorce, creditors from the marriage cannot reach CP awarded to a spouse unless that spouse:

i. incurred the debt, or
ii. was assigned the debt by the court

iii. example:
a. H and W divorce, $40k in stocks (CP) awarded to W
b. H owed supplier S $40k at time of marriage
c. after divorce S obtains judgment against H and collects $10k from H
d. S cannot from W bc W did not incur the debt, nor was it assigned to W