BILL ANALYSIS
AB 459
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Date of Hearing: March 31, 2009
ASSEMBLY COMMITTEE ON JUDICIARY
Mike Feuer, Chair
AB 459 (Lowenthal) - As Introduced: February 24, 2009
PROPOSED CONSENT (As Proposed to be Amended)
SUBJECT : DiSSOLUTION: DISCLOSURE
KEY ISSUE : SHOULD A PARTY TO A DIVORCE PROCEEDING BE ABLE TO
COMPLETE THE PROCEEDING EVEN IF THE OTHER SPOUSE REFUSES TO
PROVIDE REQUIRED FINANCIAL DISCLOSURE DOCUMENTS?
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
SYNOPSIS
Currently, parties to a dissolution of marriage or legal
separation must serve each other with a preliminary disclosure
listing the parties' assets and liabilities. Additionally, no
final judgment as to property rights may be entered unless the
parties have served the required declarations on the other
party, or they have stipulated to a mutual waiver of a final
disclosure declaration, having previously exchanged preliminary
disclosure declarations, unless the judgment is entered by
default, in which case only the petitioner's declaration of
service of the preliminary disclosure is required. There are
two remedies in the event one party complies with the service of
the preliminary disclosure but the other party does not. The
complying party may request compliance from the other party, and
if the noncomplying party still does not comply, the complying
party may (1) file a motion to compel a response; or (2) file a
motion for an order preventing the noncomplying party from
presenting evidence on issues that should have been covered by
the disclosure.
This bill, sponsored by the Family Law Section of the State Bar,
provides the complying party with a third alternative. It
allows the complying party to also file a motion showing good
cause for the court to grant the complying party's voluntary
waiver of receipt of the preliminary disclosure or final
disclosure. Proponents state that allowing the complying party
to waive the receipt of a disclosure from the noncomplying party
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would assist in moving a dissolution case forward, without
waiting for the noncomplying party's disclosure declaration,
which may never be forthcoming. There is no known opposition to
this bill.
SUMMARY : Provides a process whereby a party to a dissolution or
separate can waive disclosure of specified financial
declarations. Specifically, this bill :
1)Provides that if a party to a dissolution or legal separation
fails to serve the other party with a preliminary or final
disclosure declaration, and the other party has served the
respective declaration, that other party may, in addition to
other remedies, file a motion showing good cause for the court
to grant that party's voluntary waiver of receipt of the
disclosure declaration.
2)If a court grants a party's request for voluntary waiver of
receipt of a disclosure declaration under #1, provides that
the court may set aside the judgment entered after the waiver
for failure to comply with the disclosure requirements only at
the request of the party who complied with the disclosure
requirements.
EXISTING LAW :
1)In order to ensure full and accurate disclosure of all assets
and liabilities, requires parties to a dissolution or legal
separation to serve the other party with a preliminary and
final disclosure declaration, except as specified. Requires
the preliminary disclosure declaration to be served after or
concurrently with service of the petition for dissolution or
separation. (Family Code Sections 2103-04. Unless stated
otherwise, all further references are to this code.)
2)Except as provided, prohibits the court from entering a
judgment regarding the parties' property rights in a
dissolution unless each party, or their attorney, has executed
and served a final disclosure declaration and a current income
and expense declaration. (Section 2106.)
3)If a party fails to serve either the preliminary or final
disclosure declaration on the other party and if the other
party has served the required declarations, allows the
complying party to request preparation of the disclosure
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document(s). If the noncomplying party fails to comply,
allows the complying party to (a) file a motion to compel; or
(b) file a motion for an order preventing the noncomplying
party from presenting evidence on what should have been in the
declaration. Allows for the imposition of fees on the
noncomplying party. Allows the court to set aside a judgment
when the parties have failed to comply with disclosure
requirements. (Section 2107.)
COMMENTS : Currently, parties to a dissolution or nullity of
marriage or legal separation must serve each other with a
preliminary of disclosure listing the parties' assets and
liabilities, and the percentage of ownership in each item not
solely owned by one or the other party. Additionally, unless
the judgment is by default, no final judgment as to property
rights may be entered unless the parties have served the
required declarations on the other party, or they have
stipulated to a mutual waiver of a final disclosure declaration,
having previously exchanged preliminary disclosure declarations.
In case of a default judgment, only the petitioner's
declaration of service of the preliminary disclosure is
required.
Current law provides two options in the event a party complies
with the service of the preliminary disclosure but the other
party does not. First, the complying party may request
compliance from the other party, and if the noncomplying party
still does not comply, the complying party may do one or both of
following: (1) file a motion to compel a response; or (2) file a
motion for an order preventing the noncomplying party from
presenting evidence on issues that should have been covered by
the disclosure.
This bill, sponsored by the Family Law Section of the State Bar,
provides the complying party a third alternative. It allows the
complying party to also file a motion showing good cause for the
court to grant the complying party's voluntary waiver of receipt
of the preliminary disclosure or final disclosure declaration.
The sponsor states that allowing the complying party to waive
the receipt of a disclosure from the noncomplying party will
assist in moving a dissolution case forward, without waiting for
the noncomplying party's declaration of disclosure or attempting
to obtain a response when the complying party knows that it will
not be made. According to the author:
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Existing law provides that all family law litigants
who have appeared in a dissolution of marriage, legal
separation, nullity or domestic partnership action
serve on the other party a Preliminary and Final
Declaration of Disclosure, which details the assets,
liabilities, income and expenses of the parties.
Existing law permits the waiver of a Final Declaration
of Disclosure, but does not permit a waiver of the
Preliminary Declaration of Disclosure. . . .
Currently, . . . there is no provision allowing the
complying party to obtain a judgment of dissolution of
marriage, nullity, legal separation or domestic
partnership if both sides do not comply with the
disclosure requirements, if both sides have appeared
in the action.
The problem is that in many cases, particularly with
self-represented litigants, both parties appear in the
action by filing a Petition and Response. However,
after filing the initial pleading, one party decides
not to participate in the action, oftentimes because
there aren't many assets, and he or she does not serve
the required Declaration of Disclosure on the other
party. When this occurs, the complying party cannot
obtain a judgment and terminate the parties'
relationship. A default cannot be taken because the
other party has appeared. When this situation occurs
the litigants either cannot obtain a judgment
terminating their relationship status or the court
must come up with 'creative ways' in which to enter a
judgment to terminate the status.
This bill expands the remedies to allow the party who has
complied with the disclosure statutes the ability to file a
motion requesting the court, upon good cause shown, to grant the
complying party's right to waive receipt of the other party's
disclosure documents. This will allow the complying party to
obtain a judgment and terminate the relationship and divide the
assets and liabilities. The good cause requirement allows the
court to use its discretion to review the facts justifying the
requested waiver and entry of judgment, such as the likelihood
that the noncomplying party will never comply with the
disclosure requirements. If the court decides that the facts do
not justify waiver of the disclosure requirements, the court can
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deny the motion and order further actions to be taken before
granting the motion and entering a judgment.
Under current law, a judgment may be set aside if the parties
have not complied with all the disclosure requirements. The
statute specifically provides that failure to comply with the
disclosure requirements is not harmless error. In order not to
penalize the party who complied with all the disclosure
requirements, this bill allows that party to set aside the
judgment, even if that party voluntarily waived receipt of the
disclosure declarations, but prevents the noncomplying party
from setting aside the judgment. This will allow the complying
party to terminate the legal relationship and divide the assets
and liabilities, but still be protected if the noncomplying
party hid assets from the complying party.
Author's Amendment : In order to better clarify the language in
the bill, the author has agreed to the following amendment: On
page 2, line 5, delete "who has appeared in" and insert "to"
Previous related legislation : This provision had been included
in AB 2303 (Judiciary), Chap. 5667, Stats. 2006, the Committee's
civil omnibus bill, but was deleted in the Senate Judiciary
Committee because of concern that the provision was too
substantive for an omnibus bill.
REGISTERED SUPPORT / OPPOSITION :
Support
Family Law Section of the State Bar (sponsor)
Opposition
None on file
Analysis Prepared by : Leora Gershenzon / JUD. / (916) 319-2334
AB 459
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