TORT AND CONTRACT LIABILITY; MANAGEMENT PROBLEMS

Question 1

Where the other spouse was a tortfeasor, the tort recovery is…

Answer 1

SP

Question 2

Where damages are recovered from a third party, the tort recovery is…

Answer 2

CP

However, in a property division on divorce or legal separation the reward will go to entirely to the injured spouse so long as it can be traced and wasn’t already spent

This will be the result unless the interests of justice, including economic need, require otherwise.

Question 3

what assets can the judgment creditor reach, and in what order?

Answer 3

The rule is that CP is subject to the tort liability of either spouse.

But we also need to look at what money creditors are able to recover first.

Question 4

If W was performing an act for the benefit of the community (e.g., driving to work, or driving the kids in a car pool), The liability is first satisfied from…

Answer 4

CP, then from SP

Question 5

If W was not performing an act on behalf of the community (e.g., driving to SP vineyard to talk to foreman, or driving to liaison with her boyfriend) The liability is first satisfied from….

Answer 5

SP, then CP

Question 6

Can a judgment creditor reach H’s SP?

Answer 6

No - H is not personally liable

Question 7

Management Rules:
General Rule

Answer 7

equal management powers – Each spouse has equal management and control over all community property, and thus has full power to buy or sell CP and contract debts without the other spouse’s joinder or consent.

Question 8

Exceptions to Management Rule:

Answer 8

1. Personal Belongings Exception
2. Business Exception

Question 9

Personal Belongings Exception

Answer 9

One spouse cannot sell or encumber personal property used in family dwelling (furniture, clothing, etc.) without written consent of other spouse. Transaction voidable by other spouse at any time.

Question 10

Business exception

Answer 10

Applies when a spouse operates a business interest that is all or substantially all community personal property and has primary management and control of all the business. While this spouse can act alone in all transactions, if the spouse sells, leases, or otherwise encumbers substantially
all of the personal property used in the business, must give written notice to other spouse.

Question 11

For conveyances of CP real property by one spouse, what is required?

Answer 11

oinder of both spouses is required

There is a 1 year statute of limitation.

BFP loses

If purchacer knew the party trying to sell unilaterally was married but decided to buy anyways, then statute of limitations doesn’t apply

Question 12

General rule for selling a house & Exception

Answer 12

Neither spouse can transfer or encumber their ½ interest in real CP (house). Only entire interest can be transferred or encumbered.

Exception – A spouse can unilaterally encumber her ½ interest in real CP to pay the family attorney representing her in a divorce action – family attorney’s real property lien

Question 13

Can either spouse enter into Ks and incur debt?

Answer 13

Yes

Question 14

Can CP be reached if debt was incurred by H before marriage to W?

+ exception

Answer 14

Yes

The earnings of a nondebtor 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 15

Can W’s SP be reached in satisfaction of H’s $30,000 medical bills?

Answer 15

Yes

The Family Code provides that each spouse has the duty to support the other spouse and minor children. This means that each spouse is personally liable for the other spouse’s contacts and necessities

Question 16

If CP funds are available to pay medical bills,….

Answer 16

then wife can be reimbursed from the community estate

Question 17

Can W’s SP be reached in satisfaction of $30,000 in H’s medical bills if (when debt incurred), W & H had separated and economic community had ended?

Answer 17

Yes

For purposes of family code, still husband and wife until divorce

Question 18

After divorce, a creditor cannot reach CP awarded to a spouse unless that spouse:

Answer 18

incurred the debt

or

was assigned the debt by the court