There is always a temptation to want to “tell all” in a divorce case. Well now, in a California divorce case, an appeals court has warned of the consequences of not telling all.
The case is Marriage of Moore. The husband is a Chico Police officer. One of the benefits of his employment is a medical trust that pays retirees a monthly benefit for covered medical expenses and health insurance premiums. The trust does not mature until retirement, and in the case of the husband in this particular case, the trust had not “vested” when the parties split up, as the City of Chico had not contributed long enough under the plan into the husband’s account to allow him to vest. Complicated stuff.
The problem for the husband occurred during the disclosure process. In California divorces, each party must do a preliminary and then a final declaration of disclosure. However, the husband never disclosed the medical trust. When the wife finally found out, she asked that the husband pay her attorney fees, but the trial judge said no.
However, the appeals court ruled that “the court erred when it failed to consider (the wife’s) request for sanctions against (the husband) for his failure to disclose the medical trust in either of his preliminary or final declarations of disclosure”. The Court made note of the fact that the judge said the husband was not obligated to disclose the medical trust if it was his position the asset had no value. But the judge was wrong.
“A party’s preliminary declaration of disclosure must identify all assets in which the declarant may have an interest, regardless of the characterization of the asset as community or separate property”, the Court of Appeal said, quoting Family code section 2104, subd. (c)(1). Under Family code section 2101, the medical trust had to be disclosed because it is an “asset”, i.e., something “real or personal” whether “tangible or intangible, and “whether currently existing or contingent”. Furthermore, if a party fails to require with the disclosure requirements, the trial court, under Family Code section 2107, must impose sanctions against the noncomplying party. The amount of sanctions is supposed to be in an ammount sufficient to deter a repeat of the offense and must include reasonable attorney’s fees and costs in most cases.
Accordingly, the appeals court has ordered to trial judge to “hear and rule” on the request for sanctions, once and for all.
This case arose up in Butte County, but the decisions of any Court of Appeal are binding on all trial courts in the state, unless another appellate court has issued a contrary opinion.