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Recent Posts in Set Aside of Judgments and Orders Category
| November 13, 2011 |
| Wife Bears Own ATTORNEY FEES In Failed SET ASIDE MOTION Involving MSA |
| Posted By Thurman Arnold, CFLS |
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Marriage of Guilardi (11/7/11) 200 Cal.App.4th 770
The Sixth District Appellate Court (including Santa Clara County) has upheld a trial court denial of recovery for the attorney fees incurred by and during a former wife's unsuccessful bid to set aside a Marital Settlement Agreement (MSA), based upon express language and implied waivers contained in that agreement (which became incorporated into the Judgment once it was approved by the court), and some misconduct on Wife's part.
Wife sought an award of $157,650 which she had paid (or that possibly remained unpaid) to her attorney, under the "needs" based provisions of Family Code section 2030, even though she incurred them on an underlying motion to set aside the MSA and Judgment that had been determined adversely to her. Her application was made on the basis of fraud, mistake, perjury and noncompliance with the Family Code disclosure requirements - which are standard grounds that
Family Code section 2122 enumerates for setting aside family law judgments. It appears from this decision, which is obtusely written at times, that Wife had waived spousal support in that agreement.
Her motion was filed one day before the one-year statute of limitations expired as to some of those grounds (i.e., mistake). When Wife signed the MSA she was not represented by counsel, and for "reasons known only to her" declined to consult with anyone despite being warned by language in the MSA that she might wish to do so and would be bound by it in any event. The MSA contained two standard provisions that the trial court seized upon in denying Wife recovery of any fees: a) a waiver of all claims under Evidence Code section 1542 and b) a clause that stated that in the event of further litigation arising from the agreement, the prevailing party would be entitled to recover their attorney fees and costs. It did not contain any express waivers of need based or other attorney fee claims, but the trial court implied this waiver from the language and intent of the document.
Unfortunately for Wife, also, the trial court found that she had intentionally destroyed a premarital agreement - although the decision is vague about how the prenup related to the MSA (apparently it too waived spousal support, but the trial court refused to uphold that waiver to the extent it arose in the premarital agreement) - and this fact may be useful to distinguish this decision from other cases, and their lines of reasoning that suggest some courts might reach a different result. (The decision recognizes this split of authority and briefly discusses these other cases). Reference to Wife's destruction of the prenup is also confusing because it was apparently nonetheless litigated so someone must have retained a copy.
So began three years of litigation, and ended after two more years of appellate processes. And lots of attorney fees for both sides.
I have mixed feelings about this decision. Sometimes bad facts make bad law. The decision doesn't tell us what burden of proof the trial court applied in finding a "waiver" of rights - whether by a preponderance of the evidence or by clear and convincing proof - and the additional fact of wife's destroying the Prenup, which the appellate decision repeatedly points out, makes this case muddy in terms of its potential application. I suspect that trial judges who wish to apply this case to fact patterns they see in their courtrooms may apply this holding without regard for similar bad acts in their own cases; in this sense, if indeed wife's destruction of the prenup sealed her fate, as the decision seems to imply, other people's fates may be similarly sealed in the future even in the absence of bad faith. And, is it good public policy to declare that a party who, in good faith, prosecutes a set aside motion should not recover fees if they ultimately lose? The two provisions in this MSA that the trial court relied are pretty much universal in MSA's and Stipulated Judgments for Dissolution and related marital or domestic partnership proceedings. Provisions that might be enforceable in most business or nonmarital contracts, particularly as they relate to power imbalances over the control of property or income that may be controlled by an "in-spouse", arguably should not apply within the family law context.
On the other hand, the fiduciary relationship arising under the fact of the marriage ("de facto" fiduciary relationship) ended when the parties separated and began their divorce battle. This is to be contrasted with the continuing legal obligations ("de jure" fiduciary duties) between the parties that don't end until the community property has been distributed. Additionally, there is a strong public policy interest in the finality of judgments - and this case, extending over 3 years at the trial court level, must have been expensive for the Husband. To have prevailed but still to have been required to pay $156,000 (or some other substantial amount) to Wife for her failed attack seems inherently unfair. This is especially so to the extent that she was destroying documents or otherwise defrauding him or the court. Moreover, Wife did sign the MSA and never apparently satisfactorily explained how this was not her own fault. While she was unrepresented at that time, she made that choice willingly.
Another unanswered question in the reported decision is whether Husband himself sought attorney fees against the Wife as the prevailing party; it seems not. Presumably this is because Wife signed away substantial rights to property and support when she executed the MSA, and so had little to give towards his attorney fees. Notably this was a lengthy 16 year marriage, and it produced a 10 year old daughter. We know nothing about Wife's education, background, or the parties' assets and income.
Incidentally, Wife complained for the first on appeal that the denying her a need's based attorney fee award per Family Code section 2030 was inappropriate given that issues of child custody and support were also determined in the MSA; she did not urge this point in the lower court. The appellate decision implies that such an argument, if properly made, could have caused a different result even if Mom still had lost the set aside application.
This is an important case for protecting the interests of parties once settlement agreements are executed and approved by family court judges. It is also one of those cases that parties who are resisting set aside motions will use to intimidate the other side. It is not at all clear from the decision what would happen where a party files a fee application to underwrite their set aside motion and sets it to be heard before the final determination, i.e., before the other side is determined to have "prevailed." But the implications seem clear. This case should not be considered the final word on the subject.
T.W. Arnold, III, CFLS |
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| March 05, 2011 |
| SANCTIONS For Failure to Complete the FINAL DECLARATION OF DISCLOSURE |
| Posted By Thurman Arnold |
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The Preliminary Declaration of Disclosure
I've recently blogged the importance of complying with Family Code section 2103 and
section 2104, which obligate both parties to a pending dissolution, legal separation, or annulment proceeding to exchange a preliminary declaration of disclosure using Judicial Council Forms FL-140, FL-141 and FL-142 (please see our Form Library for the PDF's]. Its purpose is to ensure a "full and accurate disclosure of all assets and liabilities in which one or both parties may have an interest" and it is a prerequisite to successfully performing one's fiduciary obligations in the course of such proceedings. The exchange is supposed to occur "early on" in the proceedings, whatever that means.
No case can be settled and a marital termination agreement or stipulated judgment cannot be accepted by the court clerk for filing or transmittal to a judge for signature unless both parties have exchanged their PDD's. There is a single exception where the other party does not appear in the action (i.e., file a Response and pay the fees) and so the case is resolved by way of a "default judgment." Moreover, where both litigants have formally appeared and either wants to move the case to a trial status so that it can finally be resolved (where for instance agreement is not occurring), a settlement conference or trial date will not be set by the court unless both parties have each complied with the preliminary declaration exchange and have first filed proof of that with the court.
However, beyond simply concluding your case, there are other extremely important consequences for failing to do your half of the heavy lifting in terms of identifying and attempting to value all community and separate property assets by way of PDD. In my practice I find that many client's resent the work that completing these documents entails, and yet there is no way around it. Inadequate or inaccurate disclosure declarations can create grounds for the other party to attempt months or even years later to set aside a judgment or settlement agreement. They can form the basis for breach of fiduciary duty claims. They must be dealt with in good faith. They are critical documents that must not be treated casually.
The Final Declaration of Disclosure
However, there is an arguably greater obligation that is addressed by what is called the Final Declaration of Disclosure. This is a second and final disclosure that is required in all dissolution or similar proceedings, assuming it is not waived by both parties by agreement (not a good idea for reasons I will separately blog). Where the case winds its way to trial on any aspect of it, the Final Declaration cannot be waived and it must be served prior to trial. Family Code section 2105 governs what it must contain and when it can be avoided. It is even more burdensome to fill out and comply with because supporting documents must be attached and it has to bring current all of the information regarding community and separate property not just as of the date of separation or at the time the PDD was filed, but also up to the date that it is prepared.
Based upon an Second District appellate decision issued March 3, 2011 entitled Marriage of Fong, other consequences for disclosure noncompliance are now apparent. The Fongs are one of those unfortunate couples where one or both parties seem conflicted enough that they will litigate on for years that exceed the entire length of their marriage.
Family Code section 2107 authorizes courts to award monetary sanctions for failing to comply with the disclosure obligations. It is often used in conjunction with a request for attorney fee sanctions under
Family Code section 271.
In the Fong case the trial court hit the husband with $200,000 in non attorney fee sanctions under section 2107(c) for "breach of fiduciary duties" relating to nondisclosures in the property declarations, among other things, and heaped on an additional $100,000 in fees and costs per section 271 because it concluded that his side engaged in discovery gamesmanship. Wife had contended that Husband had failed to comply with his statutory disclosure obligations regarding his assets, that he failed to respond to formal discovery, and that at trial he surprised her with documents he'd failed to earlier provide despite requests for them. Husband's alleged behavior is not unusual in high conflict divorce litigation, and so it is important that an aggrieved party, possibly like the Wife in this case, have a meaningful remedy.
Unfortunately, Wife had waited three years from the date the action was filed to serve her Preliminary Declaration of Disclosure, and at the time of the trial that led to these sanctions against the Husband (seven years after the case began) she still had not prepared and served her Final Declaration of Disclosure. Lawyers for "out-spouses" sometimes delay completing the FDD because they fear that they lack sufficient information to do them properly and so are reluctant to have those documents completed and so held against their clients as "judicial admissions" (statements under oath in the pleading files) until later in the proceedings - after they've first gotten the disclosures from the "in-spouse" who probably controls all the information.
In the first reported California appellate decision squarely construing compliance with FC section 2105 together with 2107 sanction's requests, the Second District reversed the trial court's award under section 2107. I can only guess that Wife's efforts cost she and her attorneys between $500,000 and $1,000,000 in attorney fees.
The appellate court did uphold the sanctions award per Family Code section 271 for the $100,000. That part of the ruling is also important, but this blog will be way too long if I cover it here so I will write about it separately.
The Court determined that Wife's failure to have first served her Final Declaration of Disclosure before seeking sanctions by way of motion against the Husband, on the theory that he was himself out of compliance, deprived her of the right to complain. It interpreted section 2107(a) as permitting only a "complying party" to seek the sanction remedies. By the time of a trial on a motion for a sanctions for alleged disclosure misconduct, a party is not in compliance IF she has only served their PDD and therefore not entitled to maintain a sanctions' request.
This case reminds lawyers and parties that the California disclosure statutes mean what they say. It provides useful guidance to attorneys representing the disadvantaged spouse in terms of what they must do in getting their ducks in a row before going off half-cocked. IMHO. Both sides in a California family law case have equal burdens to meet their fiduciary duties. Please take them seriously.
Here is a link to Marriage of Fong.
Thurman W. Arnold, III, CFLS
www.PeacemakingDivorce.com
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| December 03, 2010 |
| ELKINS and New FAMILY CODE SECTION 217: How It AFFECTS YOU! |
| Posted By Thurman Arnold, CFLS |
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The most important new rule in decades affecting the experience of California Family Law litigants is set to be unleashed on January 1, 2011.
It promises a radical change in the way that all family court proceedings - whether they be dissolutions, legal separations, annulments, support applications, custody, and modifications of all of the above - are processed and decided by Superior Court judges and commissioners.
This is a result of the Elkins Task Force, which has been quietly operating in the background of the California family law world since roughly August 6, 2007, when the game changing case of Jeffrey Elkins v. Superior Court (2007) 41 Cal.4th 1337 was decided by our California Supreme Court.
Elkins was a landmark decision which held that the Contra Costa County Superior Court could not through its local rules limit parties in marital dissolution actions to introducing evidence in written declaration form that had to be submitted in advance of trial, or prohibiting except in "unusual circumstances" one party from cross-examining the other about the contents of those declarations. Such a rule, intended for the sake of calendar management and judicial economy, not only had the practical if unintended consequence of favoring parties with attorneys who understood how to work with these rules but fundamentally it violated due process by cutting off litigants' abilities to present all relevant, competent evidence on material issues. Judges, as the triers of fact, are not able to assess witness demeanor and credibility without live testimony.
What is earth shattering about this decision in these economic times is that the Contra Costa Superior Court had urged that its policies and local rules were essential for the "expeditious resolution of family law cases." Soon to be former Chief Justice Ronald George rejected this justification:
"We are aware that superior courts face a heavy volume of marital dissolution matters, and the case load is made all the more difficult because a substantial majority of cases are litigated by parties who are not represented by counsel. [Reference omitted]....
In light of the volume of cases faced by trial courts, we understand their efforts to streamline family law procedures. But family law litigants should not be subjected to second-class status or deprived of access to justice. Litigants with other civil claims are entitled to resolve their disputes in the usual adversary trail proceeding governed by the rules of evidence established by statute. It is at least as important that courts employ fair proceedings when the stakes involve a judgment providing for custody in the best interest of a child and governing a parent's future involvement in his or her child's life, dividing all of a family's assets, or determining levels of spousal and child support....
Trial courts certainly require resources adequate to enable them to perform their function. If sufficient resources are lacking in the superior court or have not been allocated to the family courts, courts should not obscure the source of their difficulties by adopting programs that exalt efficiency over fairness, but instead should devote their efforts to allocating or securing the necessary resources."
Justice George ended by directing the California Judicial Council to create a task force (the 'Elkins Task Force) "to study and propose measures to assist trial courts in achieving efficiency and fairness in marital proceedings and to ensure access to justice for litigants, many of whom are self-represented. Such a task force might wish to consider proposals for adoption of new rules of court establishing state wide rules of practice and procedure for fair and expeditious proceedings in family law, from the initiation of an action to postjudgment motions. Special care might be taken to accommodate self-represented litigants. Proposed rules could be written in a manner easy for lay-persons to follow, be economical to comply with, and ensure that a litigant be afforded a satisfactory opportunity to present his or her case to the court." Hence, the Elkins decision is essentially a Jeffersonian ruling that its intended to empower family law litigants and to require counties and courts to adapt.
The Elkins Task force completed its work and has issued lengthy recommendations. The first changes take place on January 1, 2011. Possibly the most important change is embodied in Family Code section 217. It states:
"(a) At a hearing on any order to show cause or notice of motion brought pursuant to this code, absent a stipulation of the parties or a finding of good cause pursuant to subdivision (b), the court shall receive any live, competent testimony that is relevant and within the scope of the hearing and the court may ask questions of the parties.
(b) In appropriate cases, a court may make a finding of good cause to refuse to receive live testimony and shall state its reasons for the finding on the record or in writing. The Judicial Council shall, by January 1, 2012, adopt a statewide rule of court regarding the factors a court shall consider in making a finding of good cause.
(c) A party seeking to present live testimony from witnesses other than the parties shall, prior to the hearing, file and serve a witness list with a brief description of the anticipated testimony.
If the witness list is not served prior to the hearing, the court may, on request, grant a brief continuance and may make appropriate temporary orders pending the continued hearing."
Family Code section 217 will cause a sea-change in day to day family court proceedings across our state, unless family court judicial officers ignore it to the limited extent possible by court rules. It will likely have immense financial and resource consequences upon not only the courts but upon parties to family court proceedings. It will force the state government in coming years to study whole new paradigms for resolving divorce and domestic partnership dissolution outside the adversary template, including those currently practiced in New Zealand and southern Australia.
It will also pressure parties to consider mediation, and collaborative processes which occur outside congested courthouses, much more carefully. The costs of adversary litigation are about to sky-rocket, making mediation even more appealing from a financial perspective (I have written extensively about the emotional and psychological benefits here an elsewhere). There simply is no governmental money available to absorb the coming Elkins Onslaught. For more information about an alternative method for resolving family disputes, please visit us at www.DesertFamilyMediationServices.com.
At the same time, at least in the short run taken together with some of the other revisions that become effective next month, it may encourage more people to litigate more stubbornly and so make mediation seem less attractive than it did before the changes (just the reverse will be true). Some folks will mistakenly assume that this invites the use of court hearings as a live-testimony forum for sharing unresolved complaints relating to their marriage or domestic partnership dissolution with the other party in open court. Instead, judges will sustain objections to such irrelevant material and parties who seek to use Family Court as a platform to air relationship grievances will find themselves alienating the trier of fact in ways that will have adverse consequences to them beyond just the time and expense of the exercise.
The purpose of today's Blog is to introduce you to section 217 and the new changes. I will follow up with more articles in coming weeks. Without a doubt the new rules will make all the information I provide on my websites more relevant and timely for my readers.
December is new legislation month at the Southern California Family Law Blog presented by Family Law Attorney Thurman W. Arnold. My goal is to inform you well, and early on, on any number of topics that will improve your outcome in family law matters and hopefully help you to reach results that are fair for you, your spouse or ex-partner, your children, and your blended and extended families.
T. W. ARNOLD, III, CFLS
(State Bar of California, Board of Legal Specialization) |
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| November 21, 2010 |
| The TIME PERIODS for FILING SET ASIDE MOTIONS DEPENDS.... |
| Posted By Thurman Arnold |
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Dear Thurmond:
Just thought you might want to point out that there is a different code section about setting aside judgments (2122) as opposed to orders (3691). It's important because the statute of limitations is 1 year for judgments and 6 mos. for orders.
Thanks for your excellent articles,
Bruce J.
Northern California Attorney
Bruce:
I appreciate you for pointing out that some clarification would be helpful (seriously) - most people won't drop me a note - and sometimes I am slow to respond. ; (
Anyway,, I am grateful to hear from you.
As you note, there are different statutes of limitations that serve to potentially cut off or extinguish your right to challenge settlement agreements, judgments, or court orders depending on which of these you are challenging and the grounds for the set aside request (i.e., fraud, duress, mistake, etc.) You need to carefully research and understand these rules as they apply to your situation. Mixing up the statutory time periods may result in the denial of your motion, and even subject you to attorney fees for the costs incurred by the other party. I wrote about a recent case in April, 2010, where this occurred entitled
Marriage of Zimmerman.
With respect orders for support, for instance, Family Code section 3691 generally sets a six month window on the time to file a set aside of child or spousal support orders.
For settlement agreements and stipulated judgments, Family Code section 2122 sets forth the time limits for filing set aside motions. These time-frames differ depending upon the grounds you allege for the set aside, but generally range from one to two years. Note that grounds for set-aside not only include alleged misconduct of the other party but also your own circumstances that contributed to a mistake or other situation that would tend to make a set aside the fair and just remedy. I recommend that you attempt to justify your motion on every legitimate ground, even if it appears to be time-barred, unless the claims are so unlikely as to appear frivolous.
Look at these statutes carefully. Events that trigger the time to commence running can be tricky and fact specific. This is an area where you need to find competent local counsel, because if you draft the motion yourself you may not recognize that what you thought you needed to say actually undermined or destroyed your claim.
T. W. Arnold, CFLS
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| November 11, 2010 |
| Is It Possible to Get My Ex's TAX RETURNS Without Any MOTION to MODIFY Pending Between Us? |
| Posted By Thurman Arnold |
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Q. We were divorced three years ago and I haven't taken my ex-husband back to Court. I think he is earning a lot more now. Is there anything I can do to find out what his situation is short of actually filing a modification motion?
A. Absolutely. There is a little known trick for obtaining useful information, possibly with a minimum of trouble, once each year. This is the Request for a completed Income and Expense Declaration (Form FL-150) pursuant to
Family Code section 3664.
When there is no motion or OSC pending for a modification, termination, or set aside of earlier support orders you are limited in terms of your discovery rights in California - assuming the proceedings were completed in the sense that nothing is pending or presently calendared (if there is no final judgment in a divorce, partnership dissolution, or paternity action then you are entitled to continue to utilize discovery and what I say here doesn't apply). You cannot, for instance, schedule a deposition or send out interrogatories or even subpoena records, at least not properly. I have seen lawyers send subpoenas when nothing was pending and if I had done nothing they probably would have gotten the information requested since the receiving party doesn't know the status of the case, but when I objected they backed off and canceled the subpoenas at once because it was abuse of process to do what they were attempting.
But in your case you only have the option provided for by FC section 3664. This entitles you to send out on an approved
FL-396 Request for Production of An Income and Expense Declaration After Judgment a request no more than once each year
(Family Code section 3663) for the other party to produce for you an updated Income and Expense Declaration.
Importantly, the responding party is required to attach to it their last year's federal and state personal income tax returns. (Family Code section 3665).
If they do not respond to you within 35 days, or if there information is incomplete as to wages, you may serve Judicial Council Form Request FL-397 upon their employer per
Family Code section 3664(b) and (c). Unfortunately, compliance by the employer is voluntary and so this provision lacks teeth. Yet if you later do file a motion and can show a history of noncompliance by the employer and/or the other party you are more likely to recover attorney fees or sanctions as well as prove that the other party is being evasive or possibly dishonest and this may help you not only to carry your burden of proof and obtain a modification but it may impact how strongly the court acts towards your ex. In the case of family businesses where there is a lack of cooperation it helps the Court to see that you are being stymied.
Section 3664 is also a very useful tool for parties who are trying to modify or terminate support payments that they have been ordered to make. If you are a payor former spouse or domestic partner and want to terminate the other party's support rights, you would begin by sending them the Request. Again, if they fail to cooperate and comply it makes them look like they are hiding something.
Finally, Family Code section 3667 entitles you to recover certain sanctions where the Income and Expense declaration wasn't provided you, was incomplete, or lacked the required tax return attachments. While you cannot recover attorney fees if you don't actually have an attorney (and this section doesn't provide for them anyway), you can recover deposition and related costs, like for subpoenaed records (which can be significant charges), even where you are a self-represented party.
Good luck!
Thurman W. Arnold III,
Certified Family Law Specialist
Board of Specialization, State Bar of California
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| September 18, 2010 |
| Am I Entitled to Obtain DISCOVERY If I File a SET ASIDE MOTION Before the Matter is Decided? |
| Posted By Thurman Arnold |
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Q. Hello Mr. Arnold,
I appreciate your website, it is very useful. I really hope you can let me know if I am allowed to serve Form Interrogatories on my ex after I file a FL-360 Application to set aside support order under family law section 3691. Is discovery in this manner permitted before the hearing? If so, how long do I have to wait after filing FL-360 before I serve him with Form Interrogatories? Any help is GREATLY appreciated!
Wendy
A. Hi Wendy -
Discovery is permitted by the CCP in any post-judgment proceeding, once its been filed - I would serve the form interrogatories along with your application together, and personally and not by mail. The proper analysis is that each post-judgment modification or set aside motion is a discrete proceeding with discrete discovery rights and obligations. I'm not sure that all judges see it that way though but it is an accurate statement of the law. One problem is timing - if you file an OSC then the clerk sets the hearing date, which in most jurisdictions will be about the same time as your form interrogatory answers are due - and you can expect your ex to toy with you and so you may not get useful answers within the 30 days after you propound them. When interrogatories are served by mail, they are due 35 days after mailed, plus the responding party can mail the responses and so this adds another 5 days.
His answers may come in after the time your Reply to any Responsive Declaration must be filed and served, so you can't bring the quality (or lack thereof) or information contained in the responses to the judge's attention in a procedurally correct fashion. I usually go with a Notice of Motion format where I want some discovery completed before the hearing - and set the date 60 to 75 days out to give time for the other side to have a reasonable opportunity to have gotten it done and to appear unreasonable or obstructionist if they have not.
It never hurts to send out a set of form interrogatories because at least you can complain about the other party's failure/refusal to comply with their discovery obligations, which may win you a continuance or some bias against the ex.
However, form interrogatories are extremely limited in their usefulness except when seeking general information in the course of a dissolution or legal separation action. A better or additional practice would be to use a demand for production instead of or in addition to form rogs, or possibly special interrogatories if you can draft them properly. You can use a Notice to Appear and Produce Documents at the hearing, assuming you are looking for specific records. I don't have that form up on my website and I'm not sure if there is a Judicial Council form for it. Subpoenas to third parties can be useful in small jurisdictions particularly when those records won't be lost by the clerk's office, but third parties often ignore them and judges usually don't grant continuances based upon the lack of a response (for subpoean's, always demand that the custodian of records actually appear on the date and at the time specified rather than giving them the option of not appearing).
If you had a lawyer and if a lot of money was involved, you might consider a deposition. They require only 10 day's personal service when the Notice is served personally, unless they include a document production request. C.C.P. § 2025.270.
Finally, you might hit the "Other" box on the FL-300 and FL-310 application forms and specifically ask the Court to allow you to complete specific discovery before your application is heard on its merits, as in "I request an order permitting me to complete the following discovery (state it, but make the discovery as short and pin-pointed as you can) before this application is decided by the Court."
How this goes for you depends a lot on the personality of the judge and their custom and practices in managing their calendar. If you have a reasonable and narrow discovery request, no good judge will preclude you from exercising these rights.
Finally, be careful not to draft your application as a sort of disguised motion for reconsideration. If the Court feels you are just trying to take another bite of the apple from a recent hearing, unless you have material new evidence that wasn't disclosed by the other party you may not get much traction.
One more thing - I am assuming this set aside is a post-judgment application. If you are in the middle of a dissolution, legal separation, or paternity action and no final judgment has been entered then you are free to do discovery and then file the motion afterwards or do both concurrently. On the other hand, if there has already been a judgment and the set aside deals with an order that came as a result of a post-judgment motion either of you filed, then one route is follow my recommendations above.
Thurman W. Arnold III
225 S. Civic Drive
Suite 1-3
Palm Springs, CA 92262
760-320-7915
760-320-0725 (fax)
SBN: 107101
Website: http://www.ThurmanArnold.com
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| September 08, 2010 |
| What do I do if my spouse or domestic partner does not complete their DECLARATION OF DISCLOSURE? |
| Posted By Thurman Arnold |
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Q. What do I do if the other party to a divorce or dissolution of domestic partnership proceeding refuses to file their Preliminary Declaration of Disclosure?
A. Declarations of Disclosure must be exchanged in all California proceedings for dissolution of marriage or domestic partnership, for legal separations, and for annulments. They do not need to be served in any other form of family law proceeding.
There are two forms of Declarations of Disclosure: Preliminary Declarations of Disclosure (PDD's) and Final Declarations of Disclosure (FDD's). PDD's are governed by Family Code section 2103 and FC section 2104. FDD's are governed by Family Code section 2105. While parties to a dissolution or legal separation action can waive the exchange of the FDD in writing (although it is not a good idea to do so for reasons discussed in my blogs about fiduciary duties), they cannot waive exchanging the Preliminary Declarations with one exception: Where a dissolution or legal separation judgment is obtained by default, the defaulting party need not provide the PDD to the other party. Family Code section 2110.
Note that I used the words "exchange" and "serve." This is because the forms themselves are not required to be filed with the Court itself - instead, the proof of service upon the other party to the proceeding is what is to be filed. Judicial Council Form FL-141 is what you file with the clerk's office. In practice many people do file the actual schedules with the clerk, which can be a good idea because whether these forms were really exchanged and their contents can have a big impact on future set aside motions.
Here is the California Judicial Council Form FL-140 cover sheet that accompanies the PDD or the FDD. As you can see, it is the same form but different boxes are checked for each. A form FL-150 Income and Expense Declaration must accompany both, in addition to the FL-142 Schedule of Assets and Debts and the FL-160 Property Declaration.
The FDD is supposed to have much more detailed information, including supporting attachments, then is expected in the PDD.
Where the proceedings do not conclude by way of a default Judgment, the problem you have where the other party fails or refuses to exchange at least their PDD and thereupon to file the FL-141 proof of service is that the clerk cannot (a) set the matter for trial or (b) cannot accept for submittal to a judge and later filing a Stipulated Judgment or Marital Termination Agreement. This can make it impossible to conclude a case even by way of settlement where both parties are in perfect agreement, or to obtain a trial date where they are not. One party can hold up the entire process, and it is true that this often happens intentionally.
There is no set time for when parties must complete and exchange their preliminary declarations. Family Code section 2104 states in part that "after or concurrently with service of the petition for dissolution or nullity of marriage or legal separation of the parties, each party shall serve on the other party a preliminary declaration of disclosure...." The problem with this language is the word "after." The expectation is that this will be done within a reasonable time not usually exceeding 60 days from the date a party appears in the action by filing a Petition or a Response, but the statute does not explicitly say that.
The only remedy you have is file a notice of motion (or OSC application) pursuant to Family Code section 2107 asking that the court order the other party to serve their PDD and file the proof of service within a given number of days, not usually exceeding thirty. That motion should request an order that the other party's Petition or Response be stricken if they then fail to do so in a timely manner, so that your matter may effectively proceed by default hearing.
Expect the Court to give the other side one or two opportunities to get themselves into compliance with their fiduciary obligations to provide this exchange.
Thurman W. Arnold III
http://www.DesertDivorceandFamilyLawyer.com
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| May 12, 2010 |
| Is there any way to request that the Judge RECONSIDER her rulings in my case? |
| Posted By Thurman Arnold |
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Q. I was in Court three days ago and the Judge ordered me to pay an amount in support that there is no way I can afford. The Judge averaged my earnings over the past 12 months, and then entered that information into the Dissomaster. She then told me how much I had to pay for child and spousal support. The problem is that my hours were drastically cut back by my employer 10 days before the hearing and what I have been earning is not what I will be earning. I was so nervous in the courtroom I didn't explain this change to the Judge. Is there anything I can do to get the Judge to reconsider this order?
A. There are two important procedures that you can use to try to get a rehearing or a reconsideration of a court's award or decision, a motion for reconsideration and an application for CCP § 473 relief. Each is tricky and they do not succeed too often. I know of no statistics, but my guess is that court's will reconsider and reverse or modify their earlier decisions less than 10% of the time. 473 relief is more commonly granted.
The first is called a Motion for Reconsideration. The California statute governing reconsideration motions is California Code of Civil Procedure section 1008. It has at least two important parts: a) it must be timely filed and b) it must be based upon new or different facts,
circumstances, or law than what was known or shown at the time the hearing took place.
The threshold requirement is timing: § 1008(a) states that the motion must be filed "within 10 days after service upon the party of written notice of entry of the order." Courts consider that the failure to timely file a motion to reconsider is jurisdictional - which means they don't have the power to even consider your request if you are too late.
A literal reading of this statute suggests that the 10 day clock doesn't start ticking until you receive a hard copy of the court's order or ruling (typically through the mail or sometimes by personal service), but this is generally not how judges view it. Typically a judge announces their decision in open court. In the case of a Dissomaster or other support calculation they may print it out and give each party or the attorney for each party a copy. A minute order will be written by the court clerk, and placed in the file. It usually goes out in the mail to both sides the same day.
Sometimes a party or attorney will be directed by the Court to prepare a formal order. That formal order is usually on a Judicial Council form. The losing side is customarily asked to review and approve it before it is submitted to the judge for signature, except that many courts do not require an attorney to get the approval of an unrepresented party first and so it may wind up just being prepared and approved by the drafting attorney alone. Once the order after hearing gets signed by the court, it is supposed to be served upon the other party but often through sloppy practices or oversight it is not.
What this means is that you cannot rely on written notice as triggering your obligation to get the reconsideration motion filed - and you definitely cannot sit back and think that your time is not running just because no written order has been received by you.
Where the Judge makes their ruling while you are present in court, in my experience, most courts start the time running from the date of hearing regardless whether written notice or a formal written order is to follow. An exception is where a judge takes the matter "under submission" and makes her decision later, when a decision or ruling is mailed.
Many judges believe you have been "served" with the decision when you hear it - and therefore that your time to file a motion for reconsideration begins to run from that moment. This means that the only safe practice is to file your reconsideration motion no later than 10 calendar days after the hearing (not counting the first day, and if the 10th day falls on a weekend or holiday, your time is extended to the next calendar day).
10 days is not a lot of time to put a Motion for Reconsideration together. It needs to include a Notice of Motion form, an application form which includes your detailed declaration, and it is a good idea to provide legal authorities.
Assuming you meet the deadline you will find that Judges don't like to be asked to reconsider their decisions except for really good reason, and do not appreciate parties that simply are unhappy with the outcome and want to take another shot at it. They apply the technical rules technically to avoid changing their rulings, which makes some sense in terms of court efficiency because in litigation one side is almost always unhappy with the outcome and would like to reargue the matter.
The second half of a motion for reconsideration requires you establish that you have discovered "new or different facts or law." The "new law" situation is rare and does not mean that you just discovered that you quoted the wrong legal authorities to the Court and so now have "new" ones to present; it is intended to cover situations where the law changes or is clarified by statute or case decision in a way that would caused the Court to make a different decision.
Another important ground for reconsideration motions is the Court's inherent power "to do equity" or correct its own mistakes.
These motions are complicated and this Blog is just to give you some familiarity with them. These are the points I want to leave you with at the moment:
- If you can, try to research CCP § 1008, including looking at some legal treatise or the reported appellate decisions that mention it
- New or different facts don't generally include things you forgot to mention, unless you have some really credible explanation of why you forgot
- You must explain to the Court what you learned, how and when you learned it, why you didn't learn it earlier, and why these new or different facts matter enough that the Court should render a different outcome. If the other party withheld facts that you became aware of only after the hearing, you need to describe your reasonable diligence in having attempted to first get all the facts
- New facts are not the same as different facts. Be specific
- Telling the judge you just think she was wrong is rarely helpful - judges know they will be wrong some of the time, and they are trained as much to just make a decision as to get it right (clearly they want to get it right). Most of us don't like being told we are wrong and that is rarely a useful persuasive tool. Instead, focus on the justice or injustice of the situation and be humble
- Explaining that you made a mistake without more is also risky, because lawyers and parties do make mistakes in presenting their cases but the law favors finality in decision-making. Your mistake needs to have been a reasonable one.
- Always consider combining your reconsideration request with a request for relief under Code of Civil Procedure § 473, which is a very important statute that covers relief from orders or judgments that result from your inadvertence, surprise, mistake, or reasonable neglect
In your situation the question will be: If you knew 10 days before the hearing that your time had been cut back, why didn't you mention it? If you did mention it, then the Court considered your evidence and ruled against you, so this would not be new information.
Also, how different would the outcome have been if the Court had considered or known of the cut backs in your work? For instance, if those cut backs are partial and your income is 15% less than the Court supposed, this may not seem so important to the Judge that she thinks she needs to correct the unfairness of the result. If it is 40% less, she might. There are no hard and fast rules that can be applied with consistency.
It is quite common for clients to wind up hiring attorneys after they attempted to handle their case on their own, and it blew up at the hearing, and now they need desperately to get more or better information in front of the judge. It is very difficult to "un-ring the bell."
When these things happen they are a good lesson of why the adversarial court process is to be avoided whenever possible, and of the importance of finding and listening to a competent lawyer early on in your case.
Thurman W. Arnold
http://www.ThurmanArnold.com |
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| April 13, 2010 |
| What Are My Rights When I Believe My Spouse Committed Fraud in Their Income & Expense Statement? |
| Posted By Thurman Arnold |
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Q. What remedies do you have if you believe your spouse concealed income or lied about assets in their Income and Expense Declaration [Form FL-150]?
A. The FL-150 Income and Expense Declaration must be filed by each party in every California family law case involving requests for money (whether support or attorney fees), and it must accompany the FL-142 Schedule of Assets and Debts that is part of the Preliminary Declaration of Disclosure that must be exchanged in all action for dissolution of marriage or domestic partnership, legal separation, and annulment. In addition, Rule of Court 5.128 requires these Income and Expense Declarations to be current, which means they need to be updated so that they are, generally speaking, not more than 90 days stale.
Family Code section 3691 sets for the grounds and time limits for filing a Motion or OSC to set aside and correct an order for child support or spousal support which was obtained by your present or former spouse, or the other parent. You need to be very careful with these time limits, because they are shorter than other set aside remedies contained in the Family Code (for instance, Family Code section 2122 dealing with property settlements and judgments). It is important get the applicable code sections right, because different time limits apply for seeking relief from the Court.
Family Code lists the grounds for a support set aside as a) actual fraud; b) perjury; and c) lack of notice.
a) Fraud - this occurs when 1) the defrauded party is kept in ignorance or 2) in some manner other than their own lack of care or attention was fraudulently prevented from fully participating in the proceeding. This set aside ground is different from perjury. It applies to a situation, for instance, where you were told that your spouse was not seeking certain orders and so you failed to attend to the hearing only to learn later that in your absence much broader relief was requested than represented. It also applies any time information is provided by the other side that was materially false and when you relied on that false information not knowing that it was false (for instance, a party fails to disclose another job, much higher earnings, or property).
b) Perjury - where the other side has simply lied outright under oath in their Income and Expense Declaration or in the supporting verified application. Be sure to allege fraud as well since a perjurious statement is often a fraud.
c) Lack of Notice - this generally applies to situations where the other side claims you received notice of the proceedings but in fact you were not served. This can be difficult to prove where a proof of service was filed with the Court which itself is perjurious (i.e., your husband's best friend he claims he hand delivered to the documents to you on a day you were in New York).
This section applies equally to orders which were way too high based upon any of the above grounds as those that were way too low.
Family Code section 3691 will not help you in situations addressed in Family Code section 3692, where your support order was merely unfair or subsequent circumstances caused the order to be excessive or inadequate. Section 3692 is your first argument in defending a support order set aside motion.
In any of the above cases, you must file your motion within six months of the time you discovered or reasonably should have discovered the fraud, perjury, or reasonably adequate notice of the order.
Thurman W. Arnold, III
California Family Law Attorney
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| January 17, 2010 |
| What are interspousal FIDUCIARY DUTIES? |
| Posted By Thurman Arnold |
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Q. I keep hearing the phrase "interspousal fiduciary duties". What does it mean?
A. Few areas of California divorce and family law is changing as rapidly, or is having as great an impact upon property division and support obligations, as is interspousal fiduciary duties.
Until the mid-1970s lesser "good faith" standards were imposed upon married persons which had consequences to usually only in extreme situations of self-dealing by one spouse or domestic partner. These standards have since morphed into much higher level "confidential duty" and "fiduciary duty" standards.
On January 1, 1994 Family Code section 721 became operative. That was revolutionary, but widely not understand, for the next 10 years. Section 721 has since been revised, extended, and expanded by statutory amendments and judicial decisions, and this continues.
The penalties for violating a fiduciary duty can be severe. Many attorneys, and some judges, are behind the curve in understanding the nuances of the obligations imposed by FC section 721 and related statutes. This ignorance places clients at financial risk in the course of dissolution or legal separation litigation. Indeed, it opens the door to the litigation continuing or re-emerging long after Judgment if breaches of fiduciary duty are discovered or alleged downstream. Having a lawyer who understands this developing area of the law will make or break some litigants, today and for years to come.
Fiduciary duty rules help to balance economic power in marriage and divorce. One reason people roll our eyes when the topic of "divorce" comes up is who doesn't know someone who out cheated, or got cheated by the other spouse, in matters of support or property division? There are lawyers who pander to clients who want to cheat their spouse or domestic partner. Americans share a cultural mythology that these attorneys charge the highest fees and if they can out-cheat the other spouse and their attorney, they deserve them.
The accountability that the law of fiduciary duties add to the dissolution mix is a useful tool for combating marriage fraud by the other spouse. If society favors the party with more money or power over the weaker party, it will become increasingly unglued.
Fiduciary Duties Described
In financial and property transactions with third parties and each other, spouses owe one another important statutory duties that create huge responsibilities and pitfalls. As between themselves, a husband and wife are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other. "This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other." Family Code section 721(b).
The essence of the "fiduciary relationship" is that the parties are treated under the law as though they do not deal with each other on equal terms because one person (typically the managing spouse) in whom trust and confidence is reposed and who accepts the trust and confidence is in a superior position to exert influence over the dependent party. A presumption of undue influence arises whenever either party benefits from the transaction over the other, however innocuous the circumstances may seem. Breach of fiduciary duty is to some extent a strict liability offense, meaning if it occurs consequences may be set in motion that run the course to an expensive end.
In 2002 Family Code section 721 was amended to expand this confidential fiduciary relationship and impose the same rights and duties as applies to nonmarital business partners under the California Corporations Code, and includes but is not limited to:
(1) Providing each spouse access at all times to any books kept regarding a transaction for the purposes of inspection and copying;
(2) Rendering upon request true and full information of all things affecting any transaction which concerns the community property.
(3) Accounting to the spouse, and holding as trustee, any benefit or profit derived from any transaction by one spouse without the consent of the other spouse which concerns the community property (i.e., all property acquired by a married person during the marriage).
While Section 721 does not mention Registered Domestic Partners, it applies to them as well.
One major consequence is that transactions which benefit only one spouse may be set aside by the other, either before or during a divorce proceedings.
As a practical matter for divorcing couples, this means:
a) If one party has benefited over the other in a transaction involving money or property and thereby gained an advantage during the course of the marriage, the law presumes the advantage was gained through undue influence exerted on the part of the benefited party, and the transaction is presumed invalid and can be set-aside;
b) The burden of convincing a Court that a set-aside should not occur then shifts to the advantaged spouse;
c) All this can occur without regard to good or bad intent on the part of the advantaged spouse (i.e., actually intending to defraud as opposed to merely being sloppy). Either way the law declares the transaction to be the result of "constructive fraud". Once the Court finds constructive fraud the transactions can be set aside, the benefited party can be ordered to pay restitution to the other and to disgorge any profits they alone received, title may be reformed to include both parties' names, or the property may be held in trust for both on a present and go-forward basis rather than in the name of the one alone. If there is an actual fraudulent intent, the remedies to the injured spouse are more severe.
The fact that parties have separated or that a dissolution or legal separation is pending does not end the parties' fiduciary responsibilities. Family Code section 1100(e) continues those same duties "until such time as the assets and liabilities have been divided by the parties or by a court."
Remedies for breach of the fiduciary duty as described in Family Code section 721, and section 1100, include an amount equal to one-half of the value of any asset undisclosed or transferred in breach of fiduciary duty, plus attorneys fees. This includes inadvertent or unintentional violations. Family Code section 1101(g). Where a court comes to believe a spouse acted intentionally to defraud the other spouse, the Court "shall" award 100% of the value of what should have been disclosed, or what should not have been transferred, to the innocent spouse! FC section 1101(h).
If you have a business, or investments in real estate or simply a family residence, and certain transactions have occurred, you may have a problem. If you are a dependent spouse, regardless whether the other party intended to cheat you, you may have important entitlements and remedies.
This is one of the most complicated, emerging areas of California family law. Do not go it alone! In every dissolution and legal separation case, regardless whether either party has an attorney, each party must exchange a Preliminary Declaration of Disclosure, and unless expressly waived, a Final Declaration of Disclosure. If these documents contain errors, misinformation, or are incomplete the consequences can be financially devastating because an entire settlement or judgment may later be set aside. These documents sit as leverage tools and landmines for years to come.
TWA
http://www.ThurmanArnold.com
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