I just finished a virtual trial on Monday, March 1, 2021. It was set for ten days with a bifurcated issue going first. The bifurcated portion was scheduled for three days, it lasted six days and I had two attorneys on the opposing side to contend with. The legal issue was complex, and the facts of the case were equally dense and complicated. I had successfully requested the husband and his wife to be “joined” to the case as Claimants on the issue of whether a quitclaim deed signed by wife during marriage was valid. If so, a property would not be characterized as a community asset to be divided. Round two of the trial will commence at the end of June, if no there is no settlement.

All persons involved in dissolution of marriage, legal separation or modification cases must be aware of the fiduciary duties that have been established in the law. These duties require each party to disclose information and documents that are material to the case—without being requested.

In California, Family Code section 721(b) highlights some of the disclosure responsibilities. But the list is not exhaustive.  These duties in the management and control of community assets continue, “until such time as the assets and liabilities have been divided by the court.”

The parties are subject to the standards provided in 721 as to all issues relating to the support and fees, including immediate, full and accurate disclosure of all material facts and information regarding the income and expenses of the party “from the date of separation to the date of a valid, enforceable and binding resolution of all issues relating to child, spousal, and professional fees.”

To implement the rules establishing the fiduciary duties between spouses, the law requires parties to exchange their preliminary and final declarations of disclosure. These disclosures consist of the following: detailed schedules of assets and debts, reporting of any important developments that might affect the marital assets and debts, completed income and expense declarations on court-mandated forms.

The court cannot file a judgment resolving the parties’ property rights until the declarations of disclosure have been exchanged. However, the final declarations do not have to be exchanged if the parties have agreed in writing to dispense with that requirement.

The consequences of not complying with the legally imposed fiduciary duties can be severe. If a party is found to have violated his/her duties, the court can do any or all of the following: Impose monetary sanctions (In Marriage of Feldman), make the party pay the other party’s attorney’s fees, court costs and other litigation expenses. The court further award all—not just half—of an asset a spouse has concealed to the other spouse (In Marriage of Rossi). Prevent the offending spouse from presenting his/her case in court or set aside a court order or judgment that was entered as the result of the party’s failure to comply.

The bottom line is that the days of “hide the ball” divorce litigation, where one or both of the spouses would conceal important information and documents from the other spouse, are clearly a thing of the past. In light of the severe sanctions that I have outlined above, each spouse must actively engage in complete and ongoing disclosures at all times.

I will discuss the case of Matthews, Haines and Burkle in my next article, which all reviewed the factual elements of what it takes to prove that a spouse knowingly and intelligently transferred her community rights.

If you have any questions, email me at [email protected]. I am taking some time to exhale from the “new world” of remote trials. There are definitely pros and cons, but I yearn to go back to the courtroom again soon.

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