In re Marriage of Davis - 61 Cal. 4th 846, 189 Cal. Rptr. 3d 835, 352 P.3d 401 (2015)

Rule:

The Legislature intended the statutory phrase "living separate and apart" to require both separate residences and accompanying demonstrated intent to end the marital relationship. Consistent with the history of Fam. Code, § 771, subd. (a), and the developed standard articulated by the case law, "living separate and apart" refers to a situation in which spouses are living in separate residences and at least one of them has the subjective intent to end the marital relationship, which intent is objectively evidenced by words or conduct reflecting that there is a complete and final break in the marriage relationship.

Facts:

Keith Xavier Davis (husband) and Sheryl Jones Davis (wife) were married on June 12, 1993. They have two children, a daughter born in August 1995 and a son born in November 1999. The wife claimed that by 2004, she and her husband were living separate lives. They spoke about divorce, but stayed together for the sake of the children. The parties maintained a joint bank account from the beginning of their marriage, which the wife managed. In 2001, however, husband started his own business and at some point, opened a separate bank account. In 2003, wife reactivated a separate bank account of her own to manage her business funds and pay for her personal expenses. The parties continued to live in the marital home after June 1, 2006. When wife filed the petition for dissolution of the marriage on December 30, 2008, she listed the date of their separation as June 1, 2006. In his initial response to wife's petition, husband listed the date of separation as January 2, 2009 (a few days after wife's filing of the petition). Wife did not move out of the marital home until July 2011. Husband subsequently filed an amended response listing the date of separation as July 1, 2011. For the purposes of dividing the parties’ property, the trial court found the date of separation to be the date when the spouses began to manage their finances separately, while still living in the same residence. The Court of Appeals affirmed. 

Issue:

Were spouses considered as “separated” when they began to manage their finances separately, notwithstanding the fact that they still live together in the same home? 

Answer:

No.

Conclusion:

The Court held that spouses were not living separate and apart under Fam. Code, § 771, subd. (a), when they continued to live in the same residence, whether or not their conduct otherwise demonstrated their intent to end the marital relationship. Because living in separate residences was an indispensable threshold requirement for earnings and accumulations to be characterized as separate property, all of the property acquired by the spouses while they lived in the same residence was community property in accordance with Fam. Code, § 760, and the lower courts erred in finding that separation occurred on the date when the spouses began to manage their finances separately, which was earlier than the date when one spouse actually moved out of the marital home.