contrast with American states, but most especially with California,
could not be more extreme. Section 721 of California's Family Code
requires each spouse to make full disclosure to the other spouse of all
material facts and information regarding the existence,
characterization, and valuation of all assets and to provide equal
access to information. This duty persists until each asset has been
divided by the trial court. Section 2100(c) mandates full disclosure of
all assets and liabilities of each party in the early stages of a
divorce proceeding, regardless of whether a party believes them to be
community or separate property. Furthermore, the information must be
updated when changes occur. The parties are required to exchange
preliminary and final declarations of disclosure (Family Code, Sec.
2103). In order to deter nondisclosure, Section 2107(c) of the Code
requires the trial court impose monetary sanctions if a party fails to
comply with disclosure obligations. Sanctions shall be in an amount
sufficient to deter repetition of the conduct or comparable conduct, and
shall include reasonable attorney's fees, costs incurred, or both,
unless the court finds that the non-complying party acted with
substantial justification or that other circumstances make the
imposition of the sanction unjust. In In re Marriage of Feldman, 153
Cal.App.4th 1470, 64 Cal.Rptr.3d 29 (Cal.App. Dist.4 July 20, 2007), the
California courts have made it clear that, not only must a spouse
respond fully to requests by the other spouse for documents and
information about assets, but it is no longer necessary for a spouse to
take the initiative in seeking such information.
Fourth Circuit Ruling
The Fourth District Court of Appeal affirmed a trial court's order that a husband in a dissolution proceeding had to pay $390,000 in sanctions and attorney's fees to his wife because he did not disclose financial information. The parties had been married for 34 years, during which time the husband had formed many companies. He declared that his assets were worth over $50 million. Throughout the proceeding, he provided updates to his Schedule of Assets and
Debts, and responded to discovery demands from his wife's attorney. However, it was shown that he did not disclose several financial transactions, including a residence, a bond, a 401(k) account and several privately held companies.
The sanctions were ordered, even though there was no economic damage to the wife, who had learned of the non-disclosed assets before trial and had received her share of the assets. The court held that the wife need not prove damage because the sanctions were designed to deter repetition of non-disclosure and to encourage disclosure. The court stated that the husband had the duty to disclose material facts to the wife in writing; to supplement and augment the discovery continually; and to disclose material data immediately and before a new project.
Fourth Circuit Ruling
The Fourth District Court of Appeal affirmed a trial court's order that a husband in a dissolution proceeding had to pay $390,000 in sanctions and attorney's fees to his wife because he did not disclose financial information. The parties had been married for 34 years, during which time the husband had formed many companies. He declared that his assets were worth over $50 million. Throughout the proceeding, he provided updates to his Schedule of Assets and
Debts, and responded to discovery demands from his wife's attorney. However, it was shown that he did not disclose several financial transactions, including a residence, a bond, a 401(k) account and several privately held companies.
The sanctions were ordered, even though there was no economic damage to the wife, who had learned of the non-disclosed assets before trial and had received her share of the assets. The court held that the wife need not prove damage because the sanctions were designed to deter repetition of non-disclosure and to encourage disclosure. The court stated that the husband had the duty to disclose material facts to the wife in writing; to supplement and augment the discovery continually; and to disclose material data immediately and before a new project.