Francom v. Costco: how to sink a family.

October 13, 2011, by

TE BLOG. Moving day boxes. 08.23.2011.iStock_000008388519Medium[1].jpgGary and his employer Costco were both sued by Kim for sexual harassment of her. Gary's wife Sherry was also sued, not for participation in the alleged acts but to make Gary and Sherry's community property available to satisfy the claim.

Community property is net worth developed during the marriage by the work of either or both of the spouses. The idea is that, even if only one spouse is working for money, he or she couldn't do it without the support of the other. Separate property is what is brought into the marriage, or gotten by gift or inheritance while married. Separate property may be made into community property by commingling (mixing together with community property) or by agreement.

Kim sued Gary and Sherry's community on the notion the harassment occurred at work, where Gary was working to gain community income. Did the Court make Gary and Sherry's community property available to the suit?

In January of 2000, when Santana had two songs in the top 50, actually the top 12, the Washington Court of Appeals declined to make Gary and Sherry's community property available to Kim's suit for Gary's harassment at work. The Court cited a piece of understatement from an earlier Farman case:

[C]ommunity liability cannot attach under the theory of community benefit when, from the perspective of a reasonable person, the wrongful acts in question are unlikely to produce the desired community result.

True. If Gary is found liable for sexual harassment of Kim, Sherry is unlikely to see this as the "desired community result" of Gary's working at Costco. Thus a wife's community property shouldn't be put at risk by a husband's alleged intentional misbehavior.

But the news isn't so good for Gary. The Court in Francom v. Costco notes:

Assuming he is found individually liable, the law already would permit [Kim] to recover against [Gary's] separate property and his one-half interest in the community's real and personal property.

So the community (Gary's half) is at risk after all. And, to compound the misery, if the accused husband and his wife were to divorce, any liability would likely be taken from his share of the assets.

Yes, for a lot of people Lars knows, the center isn't holding. For Lars and Kyra, though, it pretty much is. Lars has some notions why.