Thursday, September 28, 2017
Man Who Retired, Transferred Business to His Wife, Not Entitled to End of Support to Ex-Wife—C.A.
Opinion Explains He Still Has Access to Income From the Business
By a MetNews Staff Writer
The Court of Appeal for this district yesterday affirmed a decision denying a termination of spousal support in the case of a man who, at 65, retired, and gave the business to his current wife.
Div. Eight, in an opinion by Justice Madeleine Flier, agreed with Los Angeles Superior Court Judge Laura L. Seigle that the transfer appears to have been for the very purpose of avoiding further alimony payments, with no showing of a diminished income from profits of the business.
Seeking termination of spousal support in 2015 was Kevin J. Berman. His income tax return, submitted by his ex-wife, Cathy Berman, reflected an annual salary of $50,113 and $220,442 in business income from Berman & Ely, a westside firm that provides investigation, security, and tax preparation services.
Siegel lowered the spousal support from $4,000 a month to $3,500 a month to reflect Berman’s loss of a paycheck.
Declining to disturb the order, Flier said:
“Based on the applicable law, we find no abuse of discretion in the trial court’s ruling. Central to that ruling was the court’s finding that Kevin had transferred Berman & Ely to his current wife in bad faith with the goal of avoiding his support obligations. This finding is supported by substantial evidence. It is undisputed that Kevin transferred to his wife an asset that had generated $220,000 in business income the previous year. It is undisputed that there was no consideration for the transfer of this apparently valuable asset. As the court noted, Kevin presented no evidence to explain the lack of consideration for the transfer. The court could reasonably infer that Kevin had arranged this transaction to eliminate his business income on paper while still enjoying its benefits through his wife’s ownership.”
Kevin Berman cited the 1998 Court of Appeal decision in In re Marriage of Reynolds, which declares that “no one may be compelled to work after the usual retirement age of 65 in order to pay the same level of spousal support as when he was employed.”
Under that decision, he declared, he could have simply shut down the business. Handing the business over to his wife, he argued, should be treated no differently.
“Of course, had Kevin closed the business, there would be no concern that he still had access to its benefits through his wife, and thus that particular evidence supporting a finding of bad faith would not be present.”
The trial court ruling, Kevin Berman protested, forces his current wife—who is not named in the opinion—to work to support his ex-wife. Flier answered that there is nothing in the record to show how much labor is devoted to the business by that unnamed spouse.
The case is In re the Marriage of Berman, 2017 S.O.S. 4851.
The attorneys on appeal were Gary Fishbein of Buter, Buzard, Fishbein & Royce, for Kevin Berman, and Robert L. Schibel, for Cathy Berman.
Copyright 2017, Metropolitan News Company