Failure To Disclose Information In A Dissolution Action Only Spells Trouble Later

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A recent appellate case that stemmed from Ventura County again points out that failure to disclose information in a marital dissolution case will generally not work out well for the party who chooses not to disclose. Much has been developing in this area of disclosure. The disclosure requirements in a dissolution action stem largely form several Family Code sections. Family Code, Section 721, states in pertinent part that: 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. Section (b) allows each party access to records “at all times” for inspection and copying. Further, upon request parties must disclose “true and full information of all things affecting any transaction which concerns the community….” Under Family Code, Section 2100, spouses are obligated to give: full and accurate disclosure of all assets and liabilities in which one or both parties have or may have an interest in regardless if it is separate or community property.

 

You get the idea? Disclosure is crucial. In the case from Ventura, Marriage of Hofer, Husband found out disclosure is crucial, too. Husband had ownership interest in several family businesses. The parties were married in 1991, had two children, and filed for divorce in 2009. Wife, through the dissolution process, tried several ways to get Husband to disclose information about his assets and income. Husband had various reasons that he would not disclose this information but the court sanctioned Husband various amounts for his failing to provide the requested information to the tune of approximately $30,000. Wife still had approximately $160,000 in fees due and owing and Husband paid his attorney around $300,000 in fees. Wife sought a fee order against Husband for $200,000 which was granted. Of course, Husband appealed claiming the court did not have the necessary information from which to base such a fee award. The appellate court dismissed the appeal based on a theory called “disentitlement”, stating that Husband chose not to disclose evidence of his financial circumstances despite three separate discovery orders and sanctions. This choice “disentitles” Husband to a choice accorded most litigants, the choice to appeal. So, again, we see the importance of disclosing information in a marital dissolution action and another consequence of failing to do so.

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