Courtney Cox has been a beloved American icon since her role as Monica Geller on the timeless television series Friends. Cox married her husband David Arquette in 1999 while still filming Friends. By 1999 the show was a raging success and all of the Friends characters were collecting a reported $125,000 per episode. Interestingly, however, the divorce paperwork filed in the Cox-Arquette case makes no mention of a premarital agreement.

Arquette signed the dissolution paperwork on March 23, 2012. However, the couple has been separated since October 2010. In October they announced they were taking time apart in order to reevaluate themselves and the relationship. The initial paperwork indicated that Arquette was filing pro per and therefore pursuing a divorce without formal legal representation. Even more shocking, Cox filed her initial responsive documents pro per as well. Currently, Cox is worth an estimated $75 million dollars while Arquette is worth only $18 million. With such a large discrepancy between the parties’ net worth and no mention of a premarital agreement, it is surprising that so far no lawyers have been called to represent either spouse. Although neither party has formal legal representation, it is possible that both spouses have consulted attorneys prior to filing any paperwork.

Former Dallas Cowboy quarterback and NFL legend Troy Aikman paid $1.75 million dollars to his ex-wife as part of an agreed divorce settlement. Aikman was married to his wife Rhonda for eleven years until the couple split in April 2011. As we have previously blogged, ten years of marriage is a significant turning point under California family law and can greatly impact the rights of the parties to a divorce. Aikman’s estimated net worth is $25 million dollars and it is unclear whether he has or will make additional payments to Rhonda.

The San Diego family court system encourages parties to reach voluntary agreements, rather than pursuing a court-determined judgment. Before a divorce or child custody case will go to trial, the court requires the parties to participate in a mandatory settlement conference. A mandatory settlement conference is overseen by the judge on the case but is facilitated by a volunteer attorney within the community. The volunteer attorney is a recognized family law expert in the field and is called the “settlement judge.” Prior to the conference, the parties are required to submit briefs to the settlement judge so that he or she will have an opportunity to review the facts and issues in the case ahead of time. If the parties are represented, all attorneys are permitted to attend the conference and speak with the settlement judge. However, the settlement judge may ask an attorney to step out of the room so that the judge has an opportunity to hear the client’s concerns. Often, the settlement judge will propose solutions that address the needs and interests of both spouses and most importantly, any children involved in the case. The scope of the issues that the parties can agree on, and therefore exclude from any further litigation, is limitless. The parties may settle property disputes, spousal and child support, child custody and visitation, and any other issues in the particular case.

Settling a case that involves such personal and intimate issues, as in all family law cases, is advantageous for all parties. Reaching a settlement can give parties control over the outcome of the litigation. The order of a judge is not debatable and might not address the specific concerns of all parties. Trial and extended litigation can also be expensive for both parties. The earlier in the process that the parties reach an agreement, the less they will be forced to spend on costs and attorney’s fees. Settlements can also be reached much faster than a final adjudication of the case in court.

Although most people can gamble on a recreational basis, millions suffer negative consequences in their lives from problem gambling. According to the National Council on Problem Gambling about two to three percent of adults experience gambling-related problems each year. These problem gamblers have an uncontrollable urge to gamble and cannot stop gambling despite the negative consequences that result from their gambling. These negative consequences are frequently financial problems that impact the gamblers personal life, family relations, educational endeavors and/or employment.

Sometimes the gambling and problems stemming from the gambling becomes so bad that the non-gambling spouse files for divorce. When this occurs, the non-gambling spouse usually reports that the gambling spouse gambled away a significant amount of community property assets and that there are outstanding gambling debts. However, the non-gambling spouse may not be liable for the outstanding gambling debts.

Generally, all assets and debts incurred during marriage are considered community property. Family Code §2625 makes an exception to the general rule stating that, “All separate debts, including those debts incurred by a spouse during marriage and before the date of separation that were not incurred for the benefit of the community, shall be confirmed without offset to the spouse who incurred the debt.”

This Family Code section provides the court with the ability to assign gambling debts to the gambling spouse. This is one of the few insteances where a court has the discretion to make an equitable division based on fault rather than an equal division of debt.

In the case In re Marriage of Cairo, Wife was able to prove that debt incurred during marriage on credit cards in Husband’s name was for Husband’s gambling. The Trial Court characterized the credit cards in Wife’s name as a community property obligation and the credit cards in Husband’s as his separate property obligation. The Court of Appeal affirmed relying on the predecessor to Family Code §2625, which also stated that debts not incurred for the benefit of the community can be assigned without offset to the spouse who incurred the debt.

On the other hand, if the gambling spouse wins big when gambling with community property assets, then those gambling proceeds could be considered community property assets and equally divided between the parties.

In the case In re Marriage of Shelton, after separation Husband gambled $10,000 of community property monies at a casino in Nevada, won $22,000 and bought Ferrari for $32,000. Husband claimed that $22,000 of the value of the car was his separate property. The Trial Court disagreed and characterized as the car as community property. The Court of Appeal affirmed holding that the character of the gambling proceeds follow the character of their source. In this case the source of the monies used to gamble were community property, therefore, the gambling winnings were also community property. The Court of Appeal rejected Husband’s argument that the winnings were his separate property post-separation earnings because gambling is primarily a game of chance where the skill component is small.

In the case In re Marriage of Wall, Wife used her post-separation earnings (or support payments) to buy an Irish Sweepstakes ticket and won $120,000. Although Husband claimed the winnings were community property, the Trial Court disagreed and awarded the winnings to Wife as her separate property. The Court of Appeal affirmed. Unlike the Shelton case, in this case the source of the monies used to buy the Sweepstakes ticket was Wife’s separate property. Therefore, the Sweepstakes winnings were also her separate property.
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