Last week we discussed whether or not a spouse can be criminally liable for damaging his community owned property.  We’re continuing on the theme of community property with this two-part pop quiz. Today we ask if community property (that is, property jointly owned by spouses) can be collected by a victim in cases where one spouse has committed a tort against a third individual (i.e., not his/her spouse).

The courts have been tackling this thorny community property issue for decades: How to determine whether the community is liable for injuries to a third party when the tort is committed by just one of the spouses? It’s a difficult question because it involves the competing interests of two innocent parties – the person injured by the negligent/reckless spouse, and the other spouse who’s life savings are often at stake for something he or she didn’t have anything to do with.

Although New York state is not a community property state, the related issue of the assets of a possibly innocent spouse have been big news lately as Ruth Madoff has tried to protect her millions from the many angry creditors of her fraudster husband Bernie. Poor Ruth!

First, let’s look at a more common example of how this problem might arise:  Let’s say Able is hit by Harry Husband”s car while Harry is speeding through a red light.  Able is injured, and eventually sues Harry for the injuries he suffered.  Able is successful and the jury awards him several thousands of dollars to compensate for his injuries.  Now, Able wants to collect his money from Harry.

But let’s say Harry has been married to Wanda for 30 years.  His house is co-owned by Wanda.  All of Harry’s bank accounts are co-owned with Wanda, and all of the money sitting in them was earned over the last 30 years.   Is it fair for Able to take property that is co-owned by Wanda, when Wanda is not personally responsible for the accident that injured Able?

In situations like this, the court has to first determine whether or not the community is liable to the injured person.  The court does this by determining whether or not the tort was committed either (1) in the “management” of community property or (2) while the tortfeasor (the person who caused the injury) was acting for the “benefit” of the community.

If the court finds that only one of the spouses is responsible for the injury, the court must then perform a delicate balancing act, and consider the rights of a victim to compensation for injuries caused by one spouse and the innocence of the tortfeasor’s spouse.  After all, it hardly seems fair that a victim can take property co-owned by a person who did not cause the injury.  Nor does it seems fair that an injured person should be practically precluded from collecting on a judgment because the tortfeasor is married and has no separate property. (If the wrong-doing spouse had sufficient separate property to pay off the injured party, or course, it would be much simpler!)

Let’s see how this has played out in court, in one case from the Thirties and another one from the Fifties.

THE ROAD WARRIOR

Here, we have a classic case of old-timey road rage. The court’s description of the case explains the situation quite eloquently:

It appears by the findings of fact that the appellant Newbury, while driving an automobile southerly on Thirty-fifth avenue N.E., in Seattle, overtook an automobile belonging to Remington and wife going in the same direction and driven by A. D. Remington. Appellant attempted to pass the automobile belonging to the Remingtons, and for a distance of several blocks Remington, by turning his car to his left at times, so drove it as to prevent appellant from passing, and on several occasions abruptly slowed down his car so as to require appellant to act quickly to avoid a collision, during all of which time A. D. Remington, and another man riding with him, were making gestures of various kinds to the appellant.

[Remington] alighted from his automobile and went back to the plaintiff’s automobile and accused the plaintiff of driving through an arterial highway at the intersection of E. 95th St. without stopping. The said defendant at said time threatened to have the plaintiff arrested. The plaintiff remained seated in his automobile in company with his young lady companion and refused to engage in any altercation with said defendant. That the said defendant suddenly said: ‘I have changed my mind about having you arrested, and will take care of you myself,’ and thereupon reached through the open window of the plaintiff’s automobile and with one hand grabbed the glasses from plaintiff’s nose, and at the same time struck the plaintiff a violent blow across the mouth with his other hand, cutting the plaintiff’s lip and inflicting permanent injuries as hereinafter set out. That the said defendant threw the plaintiff’s glasses to the pavement, breaking and ruining them.

So, Newbury sued Remington for the assault.  He was eventually awarded 1000 dollars. Was he able to collect funds owned by Remington and wife as community property?

a) Yes, the marital community is jointly responsible for any tort committed.

b) Yes, the community was liable because the husband was driving the community-owned car.

c) No, because the wife didn’t do anything wrong.

d) No, because the family car didn’t actually injure the victim.

Answer: D. The court examined whether Remington committed the tort in “the management of community property.”  In other words, the court wanted to know if the husband was somehow acting for the community at the time he assaulted Newbury.  The court ultimately determined that Remington acted as an aggressor, without consideration of the family vehicle. Thus, Newbury could not collect his judgment against Remington from community assets.

Essentially, because Remington got out of the family car and used his separate fists to assault Newbury, the community was not liable.  Had Remington hit Newberry with the family car, the result likely would have been different because Remington would have used a piece of community property to cause injury.  See Newbury v. Remington, 184 Wn. 665, 52 P.2d 312 (1935).

(Note: This case is no longer considered to be good law, as it was overruled by a 1980 case, deElche v. Jacobsen.  That case will be discussed in the 2nd part of this quiz).

THE PEDOPHILE

Here we have a case where the couple agreed to care for another woman’s child while the woman traveled out of state.   The husband and wife were paid a month fee for this service.  However, unbeknown to the wife, the husband molested the child and was eventually arrested and charged for his crime.  The child’s mother then sued both the husband and wife for the husband’s transgression.  Was the community liable for the husband’s egregious tort?

a) Yes, because the tort occurred in the management of a community business.

b) No, because the wife didn’t do anything wrong.

c) No, because the husband was not acting in the course and scope of his employment.

Answer: A. The husband and wife agreed to care for the child, and received payment for the service.  Because the community (i.e. both the husband and the wife) benefited financially from the child care arrangement, both the husband and the wife were responsible for any act by either husband or wife while caring for the child.  Thus, the court held that the child’s mother could take community property as compensation for injuries suffered by the child as a result of the husband’s actions. See LaFramboise v. Schmidt, 42 Wn.2d 198, 254 P.2d 485 (1953).

These cases demonstrate how courts determine whether or not a victim of a tort can take community property, by determining whether or not the tort was committed either (1) in the management of community property or (2) while one or both spouses are acting for the benefit of the community.

Part two of this pop quiz will focus on how courts determine whether a victim can take community property when it’s clear that tort that the tortfeasor spouse is solely liable for the victim’s injuries.