Wife Not Liable for Husband’s Post-separation Debt

A California Appellate Court has ruled that Trial Court erred by entering a judgment against Wife for hospital and medical expenses incurred by Husband during separation that were not assigned to her by the divorce judgment. In the case of C.M.R.E. Financial Services, Inc. v. Parton, Wife called police on February 16, 2006, and told them that Husband had inflicted domestic violence on her. Not long after that, Wife got a restraining order against Husband, and Husband and Wife separated. After separation, Husband was admitted to Tri-City Medical Center (T.C.M.C.), apparently suffering from emotional illness. Husband was hospitalized from February 23, 2006, to February 27, 2006.

On May 17, 2006, Wife filed for divorce. Her divorce petition asserted that T.C.M.C. debt was Husbands obligation alone. The divorce judgment entered by Trial Court on September 26, 2006, did not assign T.C.M.C. debt to Wife.

On January 24, 2008, C.M.R.E. Financial Services, Inc. (C.M.R.E.), as assignee of T.C.M.C., sued Husband and Wife, seeking to collect unpaid T.C.M.C. debt of $26,083, plus interest and attorneys fees. In response, Wife denied material allegations in the complaint and cross-complained against C.M.R.E. for violating the Fair Debt Collection Practices Act [F.D.C.P.A.; 15 U.S.C. 1692 et seq.] by sending collection notices to her. When C.M.R.E. was unable to serve Husband with the complaint, Trial Court dismissed Husband from suit without prejudice. C.M.R.E. demurred to Wifes cross-complaint, asserting that Wife was liable for Husbands necessaries of life under California Family Code Section 914 and was not relieved of liability by the divorce judgment under California Family Code Section 916(a)(2)[non-debtor spouse not liable for debt of other spouse not assigned to him or her in the divorce judgment.]

Trial Court sustained demurrer without leave to amend and subsequently awarded judgment for C.M.R.E. of $26,083, plus interest, attorneys fees, and costs. Claiming that the divorce judgment relieved her of liability for T.C.M.C. debt, Wife appealed, and California Appellate Court has now reversed and remanded the case back to Trial Court for further action. The Appellate Court has ruled that (1) pursuant to California Family Code Section 4302, spouse is not liable for post-separation debt incurred for other spouses necessaries of life unless parties have so stipulated; (2) California Family Code Section 916(a)(2) relieves non-debtor spouse of liability for other spouses post-separation debt not assigned to him or her in the divorce judgment; (3) California Family Code Section 914 does not impose joint and several liability on spouses that is separate from and not affected by California Family Code Section 916; and (4) Trial Court erred by entering judgment against Wife for T.C.M.C. debt. As a result, the Appellate Court has reversed the judgment against Wife and has vacated the order sustaining the demurrer (Wife stated viable claim for violation of F.D.C.P.A.) Then, the Appellate Court remanded the case to Trial Court to dismiss C.M.R.E.s complaint and to consider whether C.M.R.E. had valid defense to Wifes F.D.C.P.A. cross-complaint.

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