Family Code Section 4322: Secret Weapon in High Wealth Spousal Support Cases?

A statute with origins in 1872 has potentially dramatic implications for the spousal support rights of the ultra-wealthy. Family Code section 4322 states that “no [spousal] support shall be ordered or continued” when the conditions of the statute are met. Section 4322 offers an avenue for opposing support independent of the amorphous section 4320 factors and may support denial of support even when one spouse has a bigger asset base or higher earning capacity than the other. Yet, the statute is frequently overlooked by litigators and has received surprisingly little discussion in the published case law.

The power of section 4320 is illustrated by the fact that the author recently won an appeal reversing a $972,000/year Ostler-Smith spousal support award for the trial court’s failure to properly consider section 4322, which ultimately will likely save our client millions of dollars.[1] This article explores the wording, history, and strategic application of section 4322 when support is at issue in high asset cases.

A. The text of Family Code section 4322

Family Code section 4322 has origins in 1872, and has existed largely in its present form for the past 80 years. The current text provides:

In an original or modification proceeding, where there are no children, and a party has or acquires a separate estate, including income from employment, sufficient for the party’s proper support, no support shall be ordered or continued against the other party.

In essence, the statute’s text mandates denial of support in all cases where a spouse has sufficient income or assets to provide themself with “proper support.”

This article will review the historical roots of section 4322, analyze the components and requirements of the statute, and address strategic application of this formidable legislation.

B. The statutory history of Family Code section 4322

Section 4322 has its origins in California’s initial Civil Code, which was enacted in 1872 to codify the then-existing common law rules.[2] At that time, Civil Code section 5 provided (and still provides): “The provisions of this Code, so far as they are substantially the same as existing statutes or the common law, must be construed as continuations thereof, and not as new enactments.”

Under California common law before enactment of the Civil Code, a husband’s “willful neglect,” “such as leaves the wife destitute of the common necessaries of life, or such as would leave her destitute but for the charity of others,” was an actionable ground for divorce.[3] But a claim for divorce would not lie if the wife had earnings or property sufficient to provide such support for herself.[4]

The principal alimony statutes enacted with the advent of the original Civil Code in 1872 were former Civil Code sections 136, 137, 139, and 142. Former Civil Code section 139 provided that when a divorce was granted, “the Court may compel [husband] . . . to make such suitable allowance to the wife, for her support during her life, or for a shorter period, as the Court may deem just. . . .”[5] Former Civil Code section 136 gave courts discretion to “provide for the maintenance of the wife and her children . . . by the husband,” even if a fault-based divorce decree was denied.[6]

Former Civil Code section 137 recognized an independent cause of action for support “ ‘[w]hen the husband willfully deserts the wife,’ ” irrespective of whether a divorce action was filed, and provided that the court may “ ‘require the husband to pay as alimony any money necessary to enable the wife to support herself . . . .’ ”[7] Under section 137, a finding of “wilful neglect” would require an award of support but, as at common law, if a spouse’s “earnings were sufficient to supply her with the common necessaries of life without assistance from others then she was not destitute and [her marital partner] did not wilfully neglect her.”[8]

Family Code section 4322 is a revision of former Civil Code section 142, a statute that specified circumstances in which support could be denied. From 1872 through 1939, section 142 gave trial courts the discretion to deny spousal support when a spouse had “either a separate estate, or there is community property sufficient to give her alimony or a proper support . . . .”[9]  A 1939 amendment to section 142 expanded the discretionary grounds for denying spousal support to include when a spouse “is earning his or her own livelihood,” or when “custody of the children has been awarded to the other party, who is supporting them.”[10]

A 1943 amendment to former Civil Code section 142 enacted the modern version of the statute.[11] The discretionary provisions of the one-sentence 1939 version of the statute were left unchanged. However, the Legislature added a second sentence identifying a circumstance in which denial of spousal support is mandatory: “Where there are not children, and either party has a separate estate sufficient for his or her proper support, no allowance shall be made from the separate estate of the other party.”[12]

In 1969, when the Family Law Act was enacted, former Civil Code section 142 was moved to former Civil Code section 4806.[13]  

A 1970 amendment to former Civil Code section 4806 altered the second sentence of the statute to make clear that the prohibition of spousal support awards to persons who can provide their own proper support applies in modification proceedings, as well as original proceedings, and that a party’s separate estate “include[es] income from employment.”[14] The 1970 amendment also modernized the statute’s language.[15]  

In 1992, when the Family Code was created, the first sentence of former Civil Code section 4806 was moved to Family Code section 4321 without substantive change.[16] The second sentence was moved to Family Code section 4322, also without substantive change.[17] Thus, the Legislature apparently separated a court’s discretionary power to terminate support (“may deny support”) under section 4321 from a mandatory provision prohibiting any support award (“no support shall be ordered or continued”) when the statutory criteria are met.

The text of section 4322 has remained unchanged since it was moved to the Family Code by the 1992 legislation.

C. The Components of Section 4322

There are four components of section 4322 that must be satisfied before denial or termination of support is mandatory (“no support shall be ordered or continued”).

i. Component 1: “In an original or modification proceeding”

Section 4322 applies “[i]n an original or modification proceeding.” This clearly applies to permanent spousal support proceedings and motions to modify permanent support. While the statute will most often become at issue in permanent support proceedings, cases under the similar provisions of former Civil Code section 142 conclude that the statute “[a]pparently . . . does apply to awards of temporary alimony in situations meeting the conditions of the provision.”[18]

ii. Component 2: “where there are no children”

Section 4322 applies in proceedings “where there are no children.” Taken literally, the statute could be read as solely applicable to parties who have never had children, and excluding parties who have adult children. However, the statute has consistently been construed as applicable to parties who have children that have reached majority age.[19]

iii. Component 3: “a party has or acquires a separate estate, including income from employment”

The phrase “separate estate” appears in only two provisions of the Family Code – sections 1100 and 4322 – and nowhere is it defined. However, the meaning of the phrase appears to be synonymous with “separate property.” Indeed, in 1992 when former Civil Code section 4806 was split into Family Code sections 4321 and 4322, the Law Revision Commission’s comments on section 4321 observed that the former statute’s “reference to the undefined term ‘separate estate’ ” was being changed “to the defined term ‘separate property’[[20]]. . . . This is not a substantive change.” (Italics added.) Since section 4806 was not substantively changed when its provisions were moved into Family Code sections 4321 and 4322, and the switch from “separate estate” to “separate property” in section 4321 was deemed not to be a substantive change; the meaning of “separate estate” should be treated as interchangeable with “separate property.”

Accordingly, for purposes of section 4322, the “separate estate” includes property owned by a person before marriage, property acquired by a person after marriage by gift or inheritance, the proceeds and profits produced by separate property, post-separation earnings, and property validly transmuted into separate property (either from community property or from the other spouse’s separate property).[21]

Another potential source of a separate estate is community property divided in a divorce and awarded as separate property. (Fam. Code, § 2550.) As stated in In re Marriage of de Guigne, “[o]nce community property has been divided and separate property confirmed, the dissolved marriage gives rise to two separate estates, each belonging to a newly-single parent.”[22] This approach has been carried over into most section 4322 cases.[23]

Treating distributed community property as separate property for section 4322 purposes is a natural corollary of the 1970 amendment that clarified that the statute applies in modification proceedings as well as original proceedings – in post-judgment modification proceedings formerly community property is treated as separate property for purposes of section 4322. As discussed later, early, pre-judgment distributions of property may also have section 4322 implications.

iv. Component 4: Determining what is “proper support”

Clearly, the most challenging aspect of applying section 4322 is establishing what is “proper support.” The case law links the concept of “proper support” to needs or necessities.

For example, applying a predecessor to section 4322, the California Supreme Court affirmed denial of support based on the trial court’s finding that the wife “has a substantial income of her own in an amount sufficient to maintain and support [her] and provide [her] with all the necessities of life, in the station of life in which [she] is and has been accustomed,’ ” and that “it is not true . . . that [she] is or was without sufficient means with which to support herself.”[24]

Similarly, citing a predecessor of section 4322, the Supreme Court has held that where “there are sufficient assets available to enable each [spouse] to provide for his or her needs . . ., no support or support for only a limited time, without a retention of jurisdiction, would be appropriate.” [25]  Inthe Marriage of Terry case, the Court of Appeal reversed a trial court’s denial of section 4322 relief, holding that termination of support was mandatory where wife had between $5 million and $6 million in assets and reasonable needs of between $10,000 and $12,000 a month.[26] Even cases that have denied section 4322 relief have focused on the connection between the supported spouse’s needs and their separate estate resources.[27]

Analysis of whether denial of support is mandatory under section 4322 is a stark contrast with the often-amorphous standards of section 4320 support analysis, where the numerous discretionary factors are balanced. This is illustrated in my recent appellate victory, where the Court of Appeal reversed and remanded because “section 4322 operates independently of section 4320,” “ ‘proper support’ in section 4322 is not equivalent to [section 4320] ‘needs’ of the supported party based on the standard of living,” and construing a section 4320 discussion “to constitute an analysis of section 4322 would render the latter statute superfluous, contrary to longstanding axioms of statutory interpretation.”[28]

Guidance from precedents is limited, and litigators can debate what constitutes “proper support” in individual cases. In the Strategic Considerations section below, strategies and approaches are discussed from the point of view of both those seeking an award of spousal support and those seeking denial of support in high wealth cases.

v. Component 5: Sufficiency of the Separate Estate

Once the extent of “proper support” is ascertained, there are three principal aspects in determining whether the separate estate is sufficient to mandate denial of support.

First, the statute makes clear that the separate estate “includ[es] income from employment.” Thus, when a spouse requesting support has employment income (or employment income is imputed to them), that stream of income is included in determining the sufficiency of the separate estate.

Second, actual income from separate property, or an imputed rate of return on what separate property assets should reasonably generate, is considered in determining the sufficiency of the separate estate.[29]  

Finally, there is the question of whether separate property capital should be included in determining whether a separate estate is sufficient for proper support. Marriage of Terry holds that sufficiency of a separate estate for proper support is not limited to income produced from separate capital: “The statute references the estate, not just the income from the estate. Had the Legislature intended to cut off or preclude spousal support only when a spouse has or acquires income sufficient for that party’s proper support, it could easily have said so.”[30] Theoretically, this would support an argument that if separate property capital is sufficient to cover “proper support” needs for a spouse’s expected lifespan, no spousal support should be ordered – e.g., if a spouse has a 10 year life expectancy and more than $2 million, and their proper support needs are $200,000 per year, no support should be ordered. However, most section 4322 cases do not look to capital in determining the sufficiency of a separate estate, and Terry itself walks away from that notion: “we are not suggesting that courts look beyond the actual income produced from the supported spouse’s assets in cases where those assets are reasonably managed.”[31]

D. Strategic Considerations

In high asset cases where there are no minor children, Family Code section 4322 provides a potent vehicle for arguing that no spousal support should be awarded. Litigation strategy can play a major role in the outcome.

Counsel should carefully consider the strategic implications of pre-judgment distributions of community assets and income, and how those distributions are characterized. If advance distributions are specifically characterized as separate property, they ordinarily should be considered to be part of the recipient spouse’s separate estate that will be considered under section 4322.[32] If there are advance distributions of assets or income, but they are not characterized as a separate property award prior to judgment, they may be excluded from section 4322 analysis.[33] Also, if property issues are bifurcated and decided in advance of spousal support, the divided community estate arguably becomes a separate estate subject to section 4322 support analysis. Counsel should carefully draft stipulations for advance distributions, and may even want to specify that such distributed property will not be subject to section 4322.

One source for establishing and quantifying “proper support” is a party’s Income and Expense Declaration, Judicial Council Form FL-150. Of particular interest is the form’s options of providing “estimated expenses,” “actual expenses,” and “proposed expenses.” Where “proposed expenses” are provided, or compelled from a party through discovery, this can provide a baseline for quantifying what should be determined as the party’s “proper support.” This in fact was a major factor in the author’s recent section 4322 victory. When a party’s own “proposed needs,” possibly adjusted for reasonableness when unrealistically inflated, do not exceed the income of their separate estate, the case may be a prime candidate for a section 4322 argument.

Another issue is whether a marital history of savings can be considered as a component of “proper support.” While a history of savings is frequently a factor in section 4320 determinations, there are strong arguments based on both section 4322’s text and the cases interpreting it that “proper support” is limited to living expenses. After all, savings increase a separate estate, whereas the statute seeks to measure whether the current separate estate is “sufficient.” At present, no cases shed light on treatment of historic savings under section 4322 analysis.

E. Conclusion

Family Code section 4322 can have a dramatic impact on spousal support litigation in high asset cases. The statute has unique historical roots, and provides a powerful basis for escaping the amorphous section 4320 factors and arguing that “no support shall be ordered” for spouses with sufficient separate property.

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This article originally appeared in Family Law News Monthly, May 2024.

This article is copyright © in the year of publication above.