Most forensic accountants begin their assignments by preparing a list of documents needed. Attorneys sometimes respond to these requests by calling them overburdensome and excessive. This article will explain some of the reasons why those documents are being requested.
Financial Statements
An analysis of financial statements, especially over a five year period, will present a good picture of the financial condition of the company. In addition, it can show new patterns that are developing, if sales are growing steadily, if profits are growing, if assets are increasing, that tells one kind of story. If sales are going up and then down every year or so, if the company does very well and then very poorly, that tells a different story. The different stories being told will then indicate the amount of further analysis that will be needed. In addition, sometimes a business is very steady until the year of divorce, at which point sales suddenly decrease, or legal expenses suddenly increase, or the gross profit percentage becomes inconsistent, or some other type of change occurs. This change is a flag to the accountant suggesting the need for greater attention to the changes in order to determine their legitimacy.
Tax Returns
Tax returns are filed under penalty of perjury with governmental agencies and as such are significant documents. It is also of value to compare what is reported on the tax returns with that which is reported on financial statements, to see if aggressive tax positions are taken. Aggressive tax positions indicate the probability of significant perquisites, personal expenses paid by the business, which affect the business valuation as well as spousal support calculations.
Accountants' Workpapers
The workpapers of the accountant who prepares the financial statements, the business tax returns and the personal tax returns are usually very informative. They help explain the basis for certain figures and the nature of certain transactions. Sometimes, the workpapers are so skimpy that that itself indicates that the accountant has no real knowledge of the business. If he has no real knowledge, then usually the only person who does is the owner and the forensic accountant has to deepen the analysis in such a situation. Occasionally, the owner is hiding something from his/her own accountant (such as paying significant personal expenses by the business) and one must try to find out what is really going on.
General Ledgers and Journals
These are the documents from which the financial statements and tax returns are prepared, and they are therefore of great importance. They provide the details behind the broad picture presented by the financial statements and tax returns. If the financial statements stated that a certain amount was paid for purchases or some other expense, the general ledger and the journals would provide the details regarding every disbursement, showing who and what was paid, when and the amount of each transaction.
Paid Bills
Paid bills provide the basis for determining if a certain disbursement was for a business or other purpose. A review, for example, of the paid bills for legal fees shows if the payments made were for business consulting or for divorce proceedings or for estate planning, etc. The paid bills may, therefore, be very useful in determining the amount of perquisites, if any.
Payroll Tax Returns
Some business owners reduce their taxable income by paying certain people who do not provide any business services. A girlfriend, minor children, or friend might be on the payroll. It is often quite productive to review the state payroll tax returns, which itemize the names of each person being paid, or the W-2 statements issued at the end of the year, with someone such as the out-spouse, who might recognize certain names.
Bank Statements and Canceled Checks
Bank statements sometimes reveal that which the general ledger and journals would not disclose. Bank statements may show that a deposit was a wire transfer from an account that was not known to exist, perhaps even from out of the country such as Switzerland or the Cayman Islands, and that may show that other funds exist that were not known of before. Similarly, the statements may show wire transfers going out or certain other unusual transactions which may war-rant further analysis.
Canceled checks of those paid to the business operator often explain where the business owner does his personal banking. How he endorses his checks, and where he deposits his checks, may be very informative. Quite often, unknown bank accounts are discovered by simply looking at the reverse of those checks.
Accounts Receivable Records
These records are necessary to determine what amount of collectible receivables should be included in a valuation. Old accounts receivable would be examined to determine if they are of value.
A second purpose for the review of receivable records is to verify that all income is being recorded. If a doctor's patient pays his bill and the doctor deposits the check into his personal or offshore bank account, then the deposits to his business bank account may not agree with the payments reflected on his accounts receivable records.
Sometimes, a business owner will arrange with his close business associates that he will write off their balance in the year of his divorce proceedings and they will pay him back "under the table". A review of the write-offs and adjustments for unusual activity may disclose this type of arrangement.
Corporate Minutes
The corporate minutes sometimes discuss company policy or company plans, such as new expansions or acquisitions. This information is often tailored to fit a certain need, which sometimes backfires. In a recent case in which the author was involved, the husband claimed that the large sums of profits and money left in his corporation were not available for spousal support because the funds were needed for a certain corporate expense. For years the company's corporate minutes were virtually the same, but in the year of the divorce proceedings, a new paragraph was added stating "that in order to enhance the profitability of the corporation, the corporation shall continue to retain its earnings". The case settled in every respect except for spousal support and apparently the husband assumed that that too would settle, because in the months following the property settlement, the corporation distributed all of the available funds that it had been hoarding. It became quite clear that the corporate minutes were modified in an attempt to mislead the other party.
Audits by Taxing Authorities
Audit reports issued by the IRS, Franchise Tax Board or the State Board of Equalization are important because those agencies may have discovered something of interest or relevant to the dissolution proceeding. They may disclose unreported income, deductions of personal expenses, unreported sales, business entities that were not previously known to exist, business locations that were not known to exist, etc.
Insurance Policies
Claims by a business owner that his/her business is doing poorly are often matched with business interruption insurance. If the business records reflect low income and yet high premiums are being paid for large amounts of business interruption insurance, then the business records should be reviewed much more closely. Severe insurance claims to the insurance company must be verified, so there should be records of some sort that would substantiate potential claims.
Insurance policies are also of value in determining perquisites paid by the business. They may show that personal assets are being insured and that payments for life and health insurance are for personal benefit.
Finally, the policies may disclose that assets are being insured that the spouse did not know were owned by the family.
Lease Agreements
A spouse may claim that his business is doing poorly and that he is no longer utilizing all of the business space that he is renting. If, for example, a business lease shows that the lease is ending soon, then one could try to determine, through deposition or other means, if there is any attempt to rent smaller quarters. If it is clear that there is no intention of moving, then that may be a clue that the business has expectations of significant increases in income.
Company Brochures and Advertisements
Brochures and advertisements may indicate places of business that were not known before, they may indicate the status of the company in the industry ("we are #1 in sales in Southern California") and they may disclose products being sold that were not known before. They also alert one to potential cross examination questions. A real estate developer may be having a poor year, but his ads in the paper for his homes may state that "only three homes are left". What may be happening is that the homes are selling, but at such reduced prices that there is very little profit being generated. Thus, there may be an attempt to unload the homes so that he could reduce the cost of carrying the inventory.
Personal Financial Statements
While financial statements often include values and incomes that are intended to impress a potential lender, they, nonetheless, may disclose assets and sources of income that were not known before. Cash surrender values of insurance policies and real estate investments are often discovered from the personal financial statements. They are also of value when compared to other documents. For example, in a recent case, the husband valued his medical institutions by a certain price per bed for a settlement proposal to his wife and for the bank, his value per bed was exactly twice that amount.
Consulting Agreements
Consulting agreements are often a mechanism to structure a sale so that the buyer can deduct the purchase payments. For example, Tom sells his business to Jerry and Jerry wants to deduct the purchase payments currently, rather than depreciating and amortizing the purchase costs over many years. Jerry, therefore, arranges that his business will "hire" Tom as a consultant (with the understanding that Tom does not have to do any work for the buyer) and the purchase payments are paid out as consulting fees and deducted currently as such. (This is often done, but it does not comply with tax regulations.)
One should, therefore, review consulting agreements and related documents and try to ascertain if an underlying sale is involved. The underlying sale indicates what the buyer and seller considered to be the fair market value of the business and if the business was fairly constant, that value would be important to consider in a present valuation. In addition, the payments made for consulting services should be added to reported income for valuation purposes because the payments that are being deducted as a current expense are really capital investments.
Personal and Business Calendars
Doctors and other professionals often claim that their income has dropped dramatically around the date of separation and from then forward. They may claim that they have fewer patients or expected future income looks much worse than it was during marriage. A close review of appointment calendars should be made for the period before and after separation as a means of validating that assertion. The personal calendar should be used to see if business appointments are being scheduled and to determine if efforts are being made to promote business. If the calendar shows extensive vacations instead of extensive efforts to build up the business, one could argue that there is a deliberate effort to deflate the income.
In addition, patient and business appointments could be compared to the accounts receivable records to see that all patient activity is being recorded in the internal accounting system. If a patient was treated, for example, and there is no record of that patient being billed and there is no record of any collection from that patient, that is an indication that further analysis may be warranted.
Caveat. Cost-Benefit
It is often very time-consuming to thoroughly analyze all available records, and so the cost should be considered with the potential benefit. Experience and judgment must be used to determine the intensity of a review of documents.
In conclusion, the records listed above are some of the documents frequently requested by accountants. There are, of course, many other documents that are requested and, of course, there may be valid reasons for those requests. This article should illustrate that while certain requests may appear not relevant to the dissolution action or to the attorney or client, they may serve as valuable sources of information to a forensic accountant.
http://www.divorcesource.com/CA/ARTICLES/kohn2.html
Friday, June 29, 2007
Which State Can and Should You File Your Divorce Proceeding?
Maneuvering Through Complex Rules
Jurisdiction issues in divorce are more complex than those in civil cases. The jurisdictional requirements for an order or judgment for support or attorneys' fees are entirely different from those to obtain custody. Similarly, a court may have jurisdiction to dissolve a marriage, but not be able to issue binding judgments regarding support or custody. For example, a California court could issue a child support order against a father living in California, based on the fathers contact with the state, but find that another state has custody jurisdiction because that is where the child lived in the last six months.
Furthermore, a race to the courthouse can result when more than one state has jurisdiction. Though most states say the first to serve the divorce petition has priority, some states, such as Texas, hold that filing the action gives the court jurisdiction.
Personal jurisdiction
Due service of process according to state and local rules is necessary to gain divorce jurisdiction. If the defendant is a nonresident, absent from the state, or in hiding, most state statutes provide for substituted service, service by mail, and in some cases service by publication (24 Am. Jur. 2d 310-317).
Personal jurisdiction must be established for a court to order payment of money. To exercise personal jurisdiction over a nonresident defendant, a state must have a "long-arm" statute that authorizes actions against non-residents.
Courts have recognized the following bases for establishing jurisdiction:
(1) Presence, domicile, or residence in the state;
(2) Consent of the party;
(3) General appearance in the action;
(4) Doing business or some other act in the state that meets the "minimum contacts standards" of the due process clause;
(5) Causing an effect in the state by act or omission elsewhere;
(6) Ownership of property in the state; or
(7) "Other relationships to the state" that make the exercise of jurisdiction reasonable (20 Am. Jur. 2d 118. 146. 146-2. 146-7).
It is not enough to simply meet these criteria for jurisdiction; the defendant must purposefully avail himself or herself of the benefits and protections of the state. Additionally, when a court attempts to assert jurisdiction on the grounds that the defendant caused an effect in the state, that effect must be foreseeable.
Merely visiting a child or sending child support does not in itself constitute "minimum contacts" with the state asserting jurisdiction, but failure to provide support for a needy family has been held to "cause an effect" in the state.
Personal jurisdiction until recently was automatically acquired when there was personal service of process on the defendant in the state. But there is a case on point before the U.S. Supreme Court challenging whether service alone is sufficient without minimum contacts and the person availing himself or herself of the benefits and protections of the state.
A state must have personal jurisdiction over a retirement-plan member to order the plan's division, unless the plan itself has sufficient contacts with the state to establish jurisdiction. Jurisdiction over a military pension plan cannot be based solely on the member's military assignment, but on domicile, residence, or consent (Federal Uniformed Services Former Spouses Protection Act of 1982). States differ in their treatment of military pensions; so choice of forum is critical.
Forum non conveniens
A particular state with jurisdiction may not be a convenient forum for litigation. A case may be stayed or dismissed for the following reasons:
(1) The state has no real connection with the defendant;
(2) The state cannot provide an adequate forum;
(3) The venue would oppressively inconvenience a party; or
(4) The state has no interest in fostering the litigation.
A court ordinarily will stay rather than dismiss an action, so that if the case does not proceed in the convenient forum, the original state might once an take over (20 Am. Jur. 2d 172-182).
In rem jurisdiction
Domicile by either party gives that state in rem jurisdiction to dissolve marital status, even though the other party resides out of state. "Domicile" is defined as physical presence and an intention to live permanently in a location. Intentions are determined by where a person registers to vote and files a state tax return, which state issues his or her driver's license, and where the home is. The domicile of military personnel generally is the designated "home state," not necessarily the place of permanent residence (24 Am. Jur. 2d 238-240, 254).
A residence is where a person lives for any period of time, however short. A person may have several residences, but only one domicile. A state has no jurisdiction to grant a divorce if neither party has a bona fide domicile there.
Some courts have overlooked domicile and relied solely on residency to determine jurisdiction when the place of domicile is inconvenient. Some states are signatories to the Uniform Divorce Recognition Act, which states: "If both parties are domiciled in the state when a proceeding begins, a divorce filed in another jurisdiction has no effect." The act also provides rules for proof of domicile.
Owning property in a state is no longer sufficient to obtain in rem jurisdiction there. For a court to transfer property other than money (real estate, vehicles, etc.), the property must be in the state, and the court have personal jurisdiction over both parties. If the property is located in another jurisdiction, the title can be transferred only by filing a separate action in the state where it is located.
The PKPA
Because state interpretations of the Uniform Child Custody Jurisdiction Act (UCCJA) vary, the Parental Kidnaping Prevention Act (PKPA, 28 U.S.C. § 1738A) was enacted to set forth certain basic rules for determining jurisdictional disputes; the PKPA was designated for state courts and preempts state law. The PKPA provides that the home state of the child shall have custody jurisdiction, unless one state asserts continuing jurisdiction (28 U.S.C. § 1738 A(c)(2)).
Under the PKPA, the state that rendered the original custody decree can assert jurisdiction in any modification proceeding as long as one of the parties remains a resident and that state has jurisdiction under its own laws. (Alaska, for example, does not have jurisdiction under its own law; it uses the home-state test as the only basis for jurisdiction.)
The Supreme Court has held that the PKPA does not give federal courts jurisdiction to resolve custody disputes between two states. (Thompson v. Thompson, 484 U.S. 174, 108 S. Ct. 513, 98 L. Ed. 2d 512 (1988)). Thus there is no way to resolve competing state-court interpretations of the act.
The UCCJA
The purposes of the UCCJA are:
(1) To avoid jurisdictional custody conflicts between states;
(2) To promote cooperation between different states;
(3) To provide for litigation to take place in the state with the "closest connection" to the child;
(4) To discourage continuing controversy by encouraging binding decisions; and
(5) To penalize parents for "abductions and other unilateral removals of children."
The UCCJA applies to custody and visitation, and includes juvenile dependency, guardianship, and step-parent-adoption cases. It has been adopted in every state and the District of Columbia, but not in Puerto Rico and the Virgin Islands. Because it is a uniform act, state of interpretations may be cited as the authority. The provisions of the UCCJA apply in an international custody dispute, even though the foreign jurisdiction does not follow the UCCJA.
Jurisdiction becomes complex in custody cases involving American Indians. The UCCJA may apply to the case in question, but you might also need to invoke the Indian Child Welfare Act; the Indian Civil Rights Act; the Act of August 15, 1983; 67 Stat. 588; 28 U.S.C. § 1360; the appropriate tribal code; and the PKPA.
The UCCJA maintains that the child's home state or "recent home state" (the home state if not for a recent abduction) is the preferred forum to determine custody. Thus the state can assume jurisdiction if it is now, or has been within six months before proceedings began, the child's home state.
A court may exercise jurisdiction:
(1) When a child and at least one contestant have a significant connection with the state, and there is available in the state substantial evidence concerning the child's present or future care, protection, training, and personal relationships; or
(2) If it is in the best interests of the child and no other state has jurisdiction, or when another state has declined to exercise jurisdiction on the ground that the first state is a more appropriate forum; or
(3) The child is physically present in the state and has been abandoned, or the child must be protected because he or she has been subjected to or threatened with mistreatment or abuse, or is otherwise neglected.
The UCCJA also mandates that courts apply the "clean hands" doctrine to discourage parties from unilateral action or from gaining an advantage in the litigation.
Although courts will consider the parties' agreement that a custody dispute be litigated in a particular forum, they are not bound by it.
The UCCJA has not been entirely successful in preventing custody litigation over the same child in sister states that have modified the uniform act. And, a judge can interpret the statute without regard to decisions in a sister state. Some judges have ignored sister-state interpretations of key sections of the act to find a basis for exercising jurisdiction when there was no basis for it (R.E. Crouch, Interstate Custody Litigation, BNA 1981).
Federal tort jurisdiction
Federal courts have consistently held that there is no diversity jurisdiction if the primary issue is the status of parent/child or husband/wife. But in many family-related tort actions, federal district courts have asserted jurisdiction. The Ninth Circuit, for example, has held that a federal district court has diversity jurisdiction over a non-custodial parent's tort action on interference with visitation. The Sixth Circuit has held that although the PKPA does not permit a cause of action for depriving a party of custody, a cause of action may be stated under the Civil Rights Act (72 U.S.C. § 1983).
Sister-state judgment
Another state's final judgments and orders, if rendered by a court with subject-matter and personal jurisdiction over the parties, must be given recognition and enforced. For foreign and sister-state judgments to be recognized, the defendant must have been given notice and an opportunity to be heard.
The Revised Uniform Reciprocal Enforcement of Support Act (RURESA) and URESA (the original act) were passed to standardize and streamline procedures for enforcing support orders across state lines. The authority of the obligor's new state is asserted through the district of attorney's or another office or by registration of a foreign order and use of private counsel.
The RURESA provides for a two-state lawsuit: An action filed by the obligee in one state is sent to the obligor in another; the obligor's state establishes jurisdiction over the obligor, and may enter an order of support in the obligee's state. The RURESA also applies to "any foreign jurisdiction in which this or a substantially similar law is in effect."
Tactics
Personal jurisdiction can be acquired over a party if he or she makes a general appearance in an action. States and judges differ on what constitutes a general appearance; consequently, it is possible to unwittingly appear.
An opposing lawyer can trap you into making a general appearance by your signing a written stipulation for a continuance, by commencing discovery, by making motions for sanctions, or by requesting other temporary relief. These tactics place you in a catch-22: If you do not defend the proceeding, and lose on the motion to dismiss, you may be subject to sanctions, attorney's fees, and malpractice exposure. On the other hand, if you defend the action, you may have made the fatal general appearance.
Some state statutes permit ex parte hearings and continuances after the motion to dismiss is filed. But unless this protection exists, indicate in writing to opposing cousnel that you cannot respond formally, but will file the appropriate written response as soon as jurisdiction is determined. Type "special appearance" on all documents that are filed until jurisdiction is resolved. When you appear in court, state orally that you are present only for the purpose of making a special appearance to quash or dismiss the action.
In at least one state, however, losing a motion to dismiss constitutes a general appearance (5 Am. Jur. 2d 51-35). A counter tactic is to obtain an "antisuit injunction" that restrains your opponent from filing an action in a foreign jurisdiction. This can provide leverage by forcing your opponent to fight (24 Am. Jur. 2d 333-336).
Conclusion
In the jurisdiction battle, winner takes all. When both sides stand to lose everything, settlement is possible. The parties are willing to make concessions. If you can use the jurisdiction impasse to settle the case, everyone can be a winner.
Working Out a Safety Plan
A safety plan covers steps a person needs to take to keep him- or herself, and his or her children, safe from domestic violence.
Although each safety plan is different, the following are among the questions each person should consider before applying for a Domestic Violence Restraining Order:
Where will you live?
- Should you leave your present residence, or should you ask the court to order the person you want restrained to leave?
- If you will leave, how and when will you leave? When and where will you go? What will you take?
Where will your children live?
- If the person you want protection from is also the parent of any of your children who are under 18 years of age, you need to get advice from an attorney, the district attorney, or a domestic violence counselor regarding the rights and responsibilities that both you and the other parent have concerning the children.
What important documents will you need?
- You should keep certified copies of your Restraining Order with you at all times, and keep copies of other important legal or other papers such as court orders if you move or go to live in a shelter.
What emotional support or counseling will help you and your family members?
- Many domestic violence victims need extra help in handling their experiences, or in dealing with substance abuse, mental health issues, anger management, and parenting or relationship problems. Who are you going to turn to for help?
Your Day in Court
At least one trip to court is required in most dissolution cases. This might be either for an Order to Show Cause hearing or trial. Regardless of the type of hearing, it is important for you to know what to expect and what is expected of you when you go to court.
Getting Ready
The night before you go to court you should get to be early and get plenty of sleep., For obvious reasons, court can be a stressful and tiring experience. So, it is important that you come to court completely rested and ready to participate in the proceedings with a clear head.
If you have not been to court before, be sure you know how to get there If you are unsure of the location of the courthouse, parking facilities or the courtroom, please contact our office. You might also consider writing down directions to the courthouse the night before.
Determine how long it will take you to drive to court, and then increase that time by 50% to account for rush hour traffic and any other unforeseeable delays you might encounter. For example, if you estimate it will take you 30 minutes to get to court, plan on leaving home at least 45 minutes before you are to be there.
Make sure that you have completed your court preparation on the night before your court date. By doing this, you will avoid rushing around the following morning. You should assemble any documents that Mr. Rabenn has asked you to bring with you. Lay out your clothes for the next day and, in general, have everything ready to go for when you get up.
Court Reporter's Fees
Because of budgetary problems, the courts are now requiring parties to pay for the services of the Court Reporter for Order to Show Cause hearings exceeding one hour and all trials. The fees are currently $255 per half day - a cost that ordinarily must be shared by the parties.
You should be sure to have your checkbook when you come to court and you should be prepared to pay up to $255 for your share of the Court Reporter's charges for two one-half days of services. Mr. Rabenn will not advance this cost for you.
Arriving at Court
Before your court day, be sure to ask Mr. Rabenn where he wishes to meet you. This will usually be in the hallway outside the courtroom where your case is set to be heard. When you get to the courthouse, go directly to the courtroom where your matter is schedule to be heard, unless Mr. Rabenn has asked you to go somewhere else.
Most courthouses now have metal detectors at the front door. Make sure you are not carrying anything that might be considered a weapon, such as a pocket knife.
Outside the courtroom the bailiff or clerk will have posted the calendar, which is a listing of cases scheduled for that day. The cases are usually listed in alphabetical order. Make sure your case is listed on the calendar. If it is not, you might be in the wrong courtroom.
If you do not see your name on the calendar and cannot find Mr. Rabenn, go into the courtroom and talk to the bailiff or the clerk. If, after talking to the courtroom personnel, you still do not know where you are to be, go to the nearest telephone and call our office for instructions.
Court Personnel
Besides the judge, there are usually three other people in most courtroom.
The Bailiff
The bailiff is a uniformed officer who is assigned to assist in the operation of the courtroom. He or she (many bailiffs are women) is usually the first person you talk to when you enter the courtroom.
The bailiff has various functions in the courtroom. Primary among this is the job of maintain order. This applies to anything from asking people to stop taking while court is in session to physically subduing people who become violent.
The handling of forms, exhibits and miscellaneous papers is commonly assigned to the bailiff. During a hearing any attorney will often need to give a document to the judge. This is usually done by merely handing it to the bailiff, who then gives the document to the court clerk or directly to the judge.
The Court Clerk
The court clerk is the man or woman who is responsible for the management of the court. In the morning, before court starts, the clerk gets all of the files for the day from the clerk's office and gives them to the judge. When the court opens up, the attorneys and the people who are there without attorneys are usually required to "check in" with the clerk. This means that they are to advise the clerk that they are present.
When court is in session the clerk administers the oath to all witnesses, hands documents and exhibits to the judge and generally serves as the judge's clerical assistant.
The Court Reporter
As depicted in numerous theatrical courtroom scenes, the court reporter records everything that is said while court is in session, using a silent recording machine. After your hearing is completed, Mr Rabenn or the other attorney may request the court report to prepare a transcript of the proceedings. This a verbatim script of everything that was said by the judge, attorneys and witnesses in your case.
In some courthouses, court reporters are being replaced by sophisticated tape recording and video systems that are operated by court technicians. Because they are significantly less expensive than a court reporter, these systems are becoming more popular, although some people believe they are not as accurate as a court reporter.
Court Commissioners
Many family law courts are presided over by a "court commissioner" instead of a judge. There are only two differences between a commissioner and a judge:
- A commissioner is employed by the county, while a judge is a state employee.
- The parties must agree, usually in writing, that a commissioner may hear their case.
In Los Angeles County both parties and their attorney must sign a court form authorizing the commissioner to decide the case. In Orange County only the signatures of the attorney are required.
If you or the other party do not want a commissioner to hear your case, it will usually be transferred to the "Master Calendar" court, where it will be assigned to the next available judge.
Some people decide that they would prefer to have their case heard by a "real" judge, instead of a commissioner. For at least two reasons, this is a mistake, First, over 90% of all family law matters are heard by commissioners. As a result, most family law commissioners are more knowledgeable about family law that the average judge.
Secondly, most Master Calendar courts are extremely crowded and judges seldom any have spare time to hear family law cases. As a result, the Master Calendar judge often "trails" family law cases for days at a time, until a courtroom becomes available. This can cost the parties considerable amounts in attorneys fees.
For the balance of this discussion, the term "judge" will refer to a judge or commissioner.
Calendar Call
After taking the bench the first thing the judge does is call the calendar. The purpose of this is to enable the judge to determine how many cases are actually going to be heard and how long each one will take. With this information, the judge can plan the sequence of the hearings.
When the calendar is called the judge simply calls each case in alphabetical order and asks the attorneys or people who are representing themselves how long they estimate it will take to have the case heard. If different hearing times are given, the judge will usually take the long estimate so that each party will have as much time as possible.
During the calendar call there may be one or more cases that are not ready to be heard, either because one or the attorneys has not arrived or because the attorneys are negotiating the case in the hallway. When this happens, the case is put on "second call." This means that the judge will call the case later in the morning.
When the calendar call is completed, the judge has a list of cases that are ready to be heard. The judge will then call the cases for hearing, with the shortest time estates being called first. These are usually cases in which the attorneys are simply going to recite the terms of an agreement or where one party has defaulted and is not expected to show up.
Hearing or Trial Preliminaries
Review of Pleadings
Court rules require the attorneys to file their papers ("pleadings") before the hearing date. This gives the judge and the attorneys an opportunity to know what each side is going to as the judge to do. Before the judge comes out in the morning he or she will usually have read the court papers that have been filed and will be familiar with the "issues" that are to be decided.
If you are in court for the final trial of your case, both attorneys will have given the judge a "trial brief." This is an outline of the case and the issues which are going to be litigated.
Where there is a complex or unique legal issue, the attorneys might also give the judge a "Memorandum of Points and Authorities," which is a discuss of relevant legal precedents.
If financial issues, such as child support, spousal support or attorneys fees and costs, are to be decided, each attorney will also be required to give the judge their client's current Income and Expense Declarations.
Stating of Appearances
When your case is called by the judge, both attorneys and the clients (the "parties") step forward and take their places at the counsel table. Usually the attorneys sit on the inside chairs and the clients sit in the chairs at opposite ends of the table. The Attorneys will first state their "appearances for the record." For example, Mr. Rabenn will say, "Good morning, your honor. I am Glen Rabenn, counsel for Petitioner Jane Jones, who is present."
Administering the Oath
Before anything takes place the clerk will administer the following oath to both parties by instructing them to raise their right hands. The clerk will then ask:
"Do you solemnly swear to tell the truth, the whole truth and nothing but the truth, so help you God?"
In a clear and audible voice, both parties are required to say "I do."
If your religious convictions prevent you from swearing to God the clerk will administer another oath that does not contain a reference to God. Please advise Mr. Rabenn if you wish the alternative oath administered to you.
In either case, you should understand that your testimony is being given under penalty of perjury. This means that you can be charged with and convicted of a crime if you knowingly tell a lie when you testify.
Stipulations and Unresolved Issues
The judge will then want to determine which issues have been settled by agreement ("stipulations") and which ones remain unresolved. One of the attorneys will then recite any agreements and list the issues which remain "contested." In many courts, the judges insist that all agreement be put in writing and given to the clerk before the case is called.
After the judge reviews the written agreement or listens to the statement of the settled issues, he or she will ask the parties if they understand the agreement. Once the parties tell the judge that they understand the agreement and are willing to abide by its terms, the judge will usually make a statement confirming the agreement as a court order, such as, "The court accepts the stipulations of the parties and confirms it as an order of this court."
Testimony
Once the preliminaries are completed the actual hearing or trial begins. If the hearing is an Order to Show Cause for temporary orders or for modification of an existing orders, the party who filed the Order to Show Cause puts on his or her case first. In the case of a dissolution trial, the petitioner - the person who filed the case - goes first.
Direct Examination
The hearing usually begins with the attorney calling his or her client for "direct examination," although that is not always done. Sometimes an attorney will decide to call a witness "out of order" because that witness cannot stay long or for strategic reasons.
During direct examination the attorney will ask questions that will enable the judge to understand his or her client's position. In most cases the attorney will have previously discussed direct testimony with the client and witnesses, so the questions should not come as a surprise.
Rules of Evidence in Direct Examination
In conducting direct examination, there are certain rules of evidence that must be followed. The most common rule is that any question must be "relevant" to the subject matter. For example, if the only contested issue is child support, a question about the client's political affiliation would be irrelevant and, therefore, objectionable.
A question cannot call for "hearsay" testimony. Hearsay is anything said by another person who is not present in court. The question is objectionable if the answer to the question is being offered for its truth. An example of a question that is objectionable under the hearsay rule is the following:
Mrs. Smith, did Mr. Smith's employer tell you how much Mr. Smith is being paid?"
The only way this information can be presented to the judge is to actually subpoena the employer to come to court or to subpoena the employer's records.
Another important rule of evidence in direct examination is that the question must not "lead" the witness. A leading question is one that suggests the answer. For example, where the issue is spousal support, it would be improper for the wife's attorney to ask the wife,
"You haven't had a job for twenty years, have you, Mrs. Smith?"
Instead, the attorney should ask,
"When is the last time you had a job?"
If the attorney has properly prepared the wife for her direct testimony, she should quickly answer,
"Twenty years ago."
Cross-Examination
After direct examination is completed the other attorney is permitted to cross-examine the witness. Cross-examination gives the other attorney an opportunity to test the credibility of the witness and, on occasion, show the weaknesses in the other party's case.
In cross-examination the attorney asking the questions is limited to the scope of the questions asked on direct examination. Thus, if the direct examination was limited to question concerning child support, the attorney conducting cross-examination cannot ask questions about community property.
Rules of Evidence in Cross-Examination
The attorney asking questions on cross-examination must also follow the rules of evidence, but some flexibility is allowed. For example, leading questions, which are not allowed in direct examination, are permitted in cross-examination. However, the rules of relevance and hearsay must still be followed.
During cross-examination, the attorney is not permitted to pose questions that are "argumentative." For example, an improper question would be,
"Mr. Smith, are you seriously asking the court to believe that you can't find a job?"
These types of questions may be common in courtroom scenes on television, but they are not allowed in real hearing and trials.
Further Examinations
After the completion of cross-examination, the attorney who called the witness is permitted to conduct "re-direct examination." These questions must be limited to the subject matter of the cross-examination.
An attorney will ordinarily conduct re-direct examination if his or her witness said something inaccurate or misleading while being cross-examined. For instance, where the issue is child custody, under cross-examination the following question and answer might take place:
Question: Isn't it true that you leave your child home alone?
Answer: Yes, it is.
If the parent's attorney knows that his client does not actually leave the child home alone, he might ask the following question during re-direct examination:
Question: When you were being cross-examined, you said you leave your child home Alone. Isn't that true?
Answer: Well, not exactly.
Question: What did you intend to say?
Answer: Sometimes I leave my child home alone with her 16 year-old sister.
After re-direct examination is completed, the other attorney can ask more questions in "re-cross examination," in which the scope of questions is limited to the scope of the re-direct examination.
General Rules for Testimony
Regardless of which attorney is conducting the examination, there are several rules that you should follow when you are testifying:
- Listen carefully to the question that you are being asked.
- Do not guess at the answer to a question. Instead of guessing, simply say that you do not know or do not remember the information requested. However, you may estimate an answer, such as an approximate date or amount of money.
- Wait until the question has been completed before you start to give your answer. This is important for several reasons:
* If you prematurely answer a question you might give the cross-examining attorney some information that he or she had not thought of asking.
* The court reporter can only record one person talking at a time. So, if you start talking while the attorney is asking the question, the court reporter may not be able to keep a clear record of the proceedings.
* If the other attorney questioning you and Mr. Rabenn wishes to object, he will not have any opportunity to make the objection if you answer immediately. - State your answers clearly. If the question asks for yes or no answer say "yes" or "no," instead of "uh huh" or "uh uh."
- Answer only the question that is asked. Never go beyond the scope of the question.
- Pause a few moments after the question has been asked before you start talking. This will give you time to think about the question and formulate your answer. It will also give Mr. Rabenn time to make appropriate objections to the judge.
- Stop talking if the judge or either of the attorneys starts to talk.
- If you feel physically or emotionally unable to continue with the examination you should make that fact known to the judge immediately.
Documentary Evidence
A judge decides the case by applying the law to the facts of the case. The facts are based on the evidence that is present to the judge during the trial.
Evidence is usually presented in two forms: oral testimony and documents. When an attorney wishes to present documentary evidence there are several steps that must be followed:
Marking of Exhibits
The first this the attorney does is to request that the clerk "mark" the document as an exhibit. This involves assigning a number or letter to the document so that it can be easily identified whiled the trial is in progress. In most courts written evidence submitted by the Petitioner is assigned numbers, while the Respondent's exhibits are given letters.
When an attorney wants to have an exhibit marked, he or she says, "Your honor, I would like this [letter, contract, etc.] to be marked as Petitioner's Exhibit 1."
If there are going to be a significant number of exhibits presented, the judge will want the attorneys to have the exhibits marked before the trial starts. This avoids using court time to mark exhibits.
Foundation
Marking an exhibit does not guarantee that the judge will allow it to be "received." Before that happens, the attorney must first establish the "foundation" for the receipt of the document. "Laying a foundation" is the process by which the attorney submitting a document shows the judge that it is authentic.
In dissolution cases it is common for a spouse's payroll records to be subpoenaed to court. Before the judge can consider such records, the attorney submitting them must first have the spouse's employer testify that the document is true and correct. Once this is done, the records will be received as evidence.
Receiving Evidence
Once the foundation has been properly laid, the propounding attorney will ask,
"Your honor, I am requesting that this document be received as Petitioner's exhibit 1."
Before the judge receives an exhibit, the other attorney will be asked if there are any objections to the document. As with oral testimony, there are many grounds for objecting to the receipt of documentary evidence, such as relevancy or hearsay.
Respondent's or Responding Party's Case
After the requesting party in an Order to Show Cause hearing or the Petitioner in a trial has presented all of his or her evidence, that party's attorney will say, "Your honor, Petitioner rests." It is then time for the other party's attorney to present his or her case. The same procedures and rules discussed above are followed during the presentation of the other party's case.
Rebuttal
When the responding party or the Respondent has finished his or her case, the trial is not necessarily over. The first party's attorney now has the right to call "rebuttal" witnesses to contract the other party's evidence. The most common rebuttal witness is the other party, but any witness can be called for rebuttal purposes.
Closing Arguments
Once the testimony stage of the trial s completed it is time for the attorneys to make their "closing arguments" to the judge. In the closing argument each attorney summarizes the important points of the case and tells the judge why his or her client should win on the various issues involved in the case. In their closing arguments the attorneys will often refer to statutes or relevant appellate court decisions that are relevant to the case.
Some judges prefer to have the attorneys submit their arguments in writing. Where this is the practice, the judge will usually order the Petitioner's attorney to submit a closing argument within two weeks, followed by the Respondent's closing argument two weeks later, and then a rebuttal argument by the Petitioner one or two weeks after that.
After the arguments are completed the judge can either announce the decision orally in open court or take the matter "under submission." This means that the judge is going to think the case over and issue a written decision within a few weeks.
Completion of the Hearing or Trial
The reference in the title of this discussion to your day in court is somewhat misleading. Because of the staggering number of dissolution cases that are being filed, family law courts are becoming overburdened with cases. This means that even if your case is on calendar for a particular day, there is no guarantee that will be completed, or even started, on that day.
In fact, in many family law courts as many as one-half of the matters on calendar in a particular day have to be continued to another day for completion. In some courts, it can take many separate court days, spread out over six months to a year, to complete a lengthy trial. This can cause problems for the attorneys in the presentation of their cases, not to mention the inconvenience to the parties and witnesses. Unfortunately, it is a fact of life in the judicial system.
http://www.divorcenet.com/states/california/ca_art01
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