BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2009-2010 Regular Session
AB 459
Assemblymember Lowenthal
As Amended April 13, 2009
Hearing Date: June 9, 2009
Family Code
KB:jd
SUBJECT
Dissolution: Disclosure
DESCRIPTION
This bill would create a process whereby a party to a
dissolution or separation can waive disclosure of specified
financial declarations.
BACKGROUND
Currently, parties to a dissolution of marriage or legal
separation must serve each other with a preliminary disclosure
listing the parties' assets and liabilities. (Fam. Code Secs.
2103-04.) 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. (Fam. Code Sec. 2106.)
There are two remedies in the event one party does not comply
with the service of the preliminary disclosure. 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. (Fam. Code Sec. 2107.)
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AB 459 (Lowenthal)
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This bill, sponsored by the Family Law Section of the State Bar,
provides the complying party with a third alternative. It would
allow 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. This bill would also provide that if a court grants
a party's request for voluntary waiver of receipt of a
disclosure declaration, 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.
CHANGES TO EXISTING LAW
Existing law provides that in order to ensure full and accurate
disclosure of all assets and liabilities, parties to a
dissolution or legal separation must serve the other party with
a preliminary and final disclosure declaration, except as
specified. Existing law requires the preliminary disclosure
declaration to be served after or concurrently with service of
the petition for dissolution or separation. (Fam. Code Secs.
2103-04.)
Existing law , 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. (Fam. Code Sec. 2106.)
Existing law provides that 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, the
complying party may request preparation of the disclosure
document(s). If the noncomplying party fails to comply,
existing law 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. (Fam. Code Sec. 2107.)
Existing law allows for the imposition of fees on the
noncomplying party. (Fam. Code Sec. 2107.)
Existing law allows the court to set aside a judgment when the
parties have failed to comply with disclosure requirements.
(Fam. Code Sec. 2107.)
AB 459 (Lowenthal)
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This bill would provide 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.
This bill would provide that if a court grants a party's request
for voluntary waiver of receipt of a disclosure declaration, 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.
COMMENT
1. Stated need for the bill
The author states:
Currently, the only remedy for [a] complying party to obtain a
Preliminary Declaration of Disclosure from the non-complying
party is to file a motion to compel the non-complying party to
produce the disclosure documents and then, if they are still
not produced, to file a motion to prohibit the non-complying
party from producing evidence at trial on those issues covered
by the Declaration of Disclosure (property and income issues).
However, 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 action
filing a Petition and Response. However, after filing the
initial pleading, one party decides not to participate in the
action, often times 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
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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.
2. The bill would create a new remedy for complying parties
This bill expands the remedies currently available 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. The "good cause" requirement
would enable 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 determines there
is good cause to grant the waiver, the complying party would be
able to obtain a judgment, terminate the relationship, and
divide the assets and liabilities. If the court decides that
the facts do not justify waiver of the disclosure requirements,
the court can deny the motion and order further actions to be
taken before granting the motion and entering a judgment.
This new remedy would promote efficiency within the court system
and would enable litigants who have complied with all statutory
disclosure requirements to obtain final resolution of their
cases.
3.This bill would provide that judgments may be set aside only
at the request of the complying party
Under current law, a judgment may be set aside if the parties
have not complied with all the disclosure requirements. (Fam.
Code Sec. 2107.) The statute specifically provides that failure
to comply with the disclosure requirements is not harmless
error. (Id.) The commission of perjury on the preliminary
declaration of disclosure may also be grounds for setting aside
the judgment. (Fam. Code Sec. 2104.) So as not to penalize the
party who complied with all of the disclosure requirements, this
bill would provide that if a court grants a party's request for
voluntary waiver of receipt of a disclosure declaration under
this bill's provisions, the court may set aside the judgment
only at the request of the party who complied with the
disclosure requirements. Thus, a party who did not comply with
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the statutory disclosure requirements would not be able to later
set aside a judgment based on his or her own noncompliance.
For example, if a party complies by serving an inaccurate or
false disclosure declaration, then waives receipt of the other
party's declaration, would the noncomplying party be completely
barred from setting aside the judgment based on the inaccuracies
in the complying party's declaration? This committee may wish
to consider whether this bill should be amended to clarify that
the court may still set aside judgments at the request of the
noncomplying party based on the complying party's fraud or
perjury on the declaraton. Such a clarification would serve to
discourage gamesmanship among litigants and provide the court
with flexibility to address instances where there are
potentially bad actors on both sides.
The suggested amendment would be as follows:
On page 4, line 39, after "party" insert "unless the motion to
set aside the judgment is based one of the following: (1) actual
fraud where the defrauded party was kept in ignorance or in some
other manner was fraudulently prevented from fully participating
in the proceeding; or (2) perjury, as defined in Penal Code
Section 118, in the preliminary or final declaration of
disclosure, the waiver of the final declaration of disclosure,
or in the current income and expense statement."
Support : None Known
Opposition : None Known
HISTORY
Source : Family Law Section of the State Bar
Related Pending Legislation : None Known
Prior 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.
Prior Vote :
AB 459 (Lowenthal)
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Assembly Judiciary Committee (Ayes 10, Noes 0)
Assembly Floor (Ayes 74, Noes 0)
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