BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015 - 2016 Regular Session
SB 340 (Anderson)
Version: February 23, 2015
Hearing Date: May 5, 2015
Fiscal: No
Urgency: No
NR
SUBJECT
Dissolution: disclosure
DESCRIPTION
Existing law requires each party in an action for dissolution of
marriage or legal separation to serve a preliminary declaration
of disclosure of assets, and a final declaration of disclosure
on the other party. In the case of a default judgment, a
petitioner may waive the final disclosure requirements.
This bill would state that a petitioner is not required to
provide a preliminary declaration of disclosure if the
petitioner served the summons and petition by publication or
posting pursuant to court order, and the respondent has not
responded. The bill would require, when a petitioner has served
the summons and petition by publication or posting and the
respondent files a response prior to default judgment being
entered, the petitioner must serve the respondent with a
preliminary declaration of disclosure within 30 days.
BACKGROUND
The Elkins Family Law Task Force, appointed in 2008 for the
purpose of conducting a comprehensive review of family law
proceedings, produced a final report which contains 21 main
recommendations. (Elkins Family Law Task Force: Final Report and
Recommendations, (April 2010) Judicial Council
[as
of March 24, 2015].) While many of the Task Force 's
recommendations have been implemented by the courts, whether
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through Rule of Court or informal policy change, others require
statutory changes. In 2010, AB 939 (Committee on Judiciary, Ch.
352, Stats. 2010) was enacted to implement most of the Elkins
Task Force's key legislative recommendations. Again in 2012, AB
1406 implemented another specific recommendation of the Task
Force by setting a deadline for service of preliminary financial
disclosures and requiring the parties to include tax returns
from the two previous years. (AB 1406, Committee on Judiciary,
Ch. 107, Stats. 2012.) However, key recommendations from the
report have yet to be adopted. For example, one recommendation
was to create more comprehensive, statewide rules. The need for
this change was argued for by local family court staff who
noted, "for local rules it is kind of crazy, because you have
the same law being administered in different ways in 58
counties. I think more uniformity would be good." (Id. at 30.)
The lack of uniformity is evident in many places where the code
is silent and counties are left to fill in any necessary gaps.
The subject of this bill, financial disclosures between spouses
in an action for divorce where one spouse cannot be located and
defaults after being served notice by publication, lacks the
consistency the Task Force called for in its recommendations.
Specifically, when a person files for divorce, the law requires
the petitioning spouse to serve notice of the summons and the
petition for divorce on the other spouse. Both parties are also
required to provide preliminary financial disclosures to the
other party. In cases where the whereabouts of both spouses are
known, service is relatively straight forward and can be
accomplished in a number of ways, including in person or by
mail. (See Code Civ. Proc. Secs. 415.10; 1012.)
However, if the location of the responding spouse is unknown,
notice and service become more problematic. In these cases, the
court may allow the petitioning spouse to give "notice by
publication" and publish the relevant information in a newspaper
"most likely to give notice to the party served." (Code Civ.
Proc. Sec. 415.50.) The requirement of financial disclosure,
however, is not so easily solved when the other spouse's address
is unknown. Because the Family Code does not specify how
financial disclosures must be completed, there are
inconsistencies in practice. Some counties have developed
systems through local rule of court, some rely on general
service provisions under the Code of Civil Procedure, and the
Judicial Council has created a form which requires that
disclosures are sent to a respondent's last known address.
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Accordingly, this bill seeks to better implement the Task Force
recommendation for more statewide uniformity in family law
procedures. By creating a very narrow exception to the
mandatory financial disclosure rules in cases where the
petitioner served the petition by publication or posting and the
respondent has defaulted.
CHANGES TO EXISTING LAW
Existing law provides that parties to a dissolution or legal
separation must serve on the other party a preliminary
declaration of disclosure of all assets and liabilities in which
one or both parties may have an interest. (Fam. Code Sec. 2103.)
Existing law provides that the preliminary declaration of
disclosure of assets must be served concurrently or within 60
days service of the petition for dissolution of marriage or
legal separation of the parties, and must be signed under
penalty of perjury. (Fam. Code Sec. 2104.)
Existing law prohibits the court from entering a judgment
regarding the parties' property rights in a dissolution
proceeding unless each party has submitted a final disclosure
declaration and a current income and expense declaration. (Fam.
Code Sec. 2106.)
Existing law allows the petitioner, in the case of a default
judgment, to waive the final declaration of disclosure
requirements. (Fam. Code Sec. 2110.)
This bill would provide that a preliminary declaration of
disclosure is not required by a petitioner if the petitioner
served the summons and petition by publication or posting
pursuant to a court order, and the respondent has defaulted.
This bill would provide that when a petitioner serves the
summons and petition by publication or posting and the
respondent files a response prior to a default judgment being
entered, the petitioner must serve the respondent the
preliminary declaration of disclosure within 30 days of the
response being filed.
COMMENT
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1.Stated need for the bill
According to the author:
The court can approve service by publication or posting in
cases where the respondent cannot be served with reasonable
diligence in another manner authorized by statute (Code of
Civil Procedure Section 415.50). In these cases, if the
respondent defaults, and most do, it can reasonably be assumed
the respondent will not get actual notice of the disclosures,
making petitioner's efforts in completing, filing and serving
the required forms an unnecessary expenditure of time and
resources. These disclosures, which often contain personal
financial information, like bank account and credit card
account numbers and balances, must be mailed to the last known
address, so there is the possibility a third party may come
into possession of the Petitioner's sensitive financial
information. These disclosures are not filed with the court,
so eliminating the requirement to serve a defaulting spouse
with these forms, when service is by publication or posting,
will not deprive the court of needed information.
2.Does not create exception for respondent to serve preliminary
disclosures
This bill would exempt a person who is seeking a divorce and
cannot locate her spouse, from the obligation of serving
preliminary financial disclosures on the missing spouse if
notice by publication has been approved by the court.
This bill does not exempt the missing spouse, who has been
served notice by publication, from the obligation to provide
preliminary financial disclosures. If the respondent does, in
fact, respond to the notice by publication, the petitioner is
required to serve preliminary declarations upon the respondent
within 30 days of that response, and the respondent must make
those same disclosures within 60 days. Accordingly, the only
difference between the requirements under existing law and those
set forth under this bill are that a petitioner would not be
required, in the rare situation that she gave notice by
publication, to send financial information to an address where
the respondent no longer lives.
Staff notes that it is in a respondent's best interest to
respond, and not default, to a petition for dissolution to
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ensure that both parties are able to present information to the
court prior to the division of assets. When a respondent
defaults, the court only reviews information that the petitioner
has provided. Judicial Council has created a number of forms to
assist a petitioner who is asking the court to divide property.
For example, the "Request to Enter Default" form (FL-165) should
be accompanied by a "Property Declaration" form (FL-160) and a
"Proposed Judgment" form (FL-180) to help the court make the
division of property. Further, under existing law (and this
bill) if a petitioner lies about not knowing where the
respondent is in order to get permission to serve by posting or
publication, the entire judgment could subsequently be set aside
due to fraud.
3.Privacy
Existing law requires that preliminary financial disclosures be
served on a spouse concurrently or within 60 days service of the
petition for dissolution of marriage. This bill would eliminate
this requirement for an individual who is unable to locate his
or her spouse and has, with the court's approval, served the
petition by publication. In the event that a spouse does
respond to the publication, this bill would require the
petitioner to serve the respondent with the preliminary
financial disclosures within 30 days.
The Executive Committee of the Family Law Section of the State
Bar (FLEXCOM), the sponsor of this bill, explains that, "in the
vast majority of cases where service was accomplished by
publication or posting, respondents default in the case, meaning
they never appear or participate in the case." Thus, preparing
the financial disclosures is arguably unnecessary expenditure of
time and resources because a defaulting respondent will never
see the disclosures and the court does not evaluate them to
determine the disposition of the case.
In addition, because existing law is silent regarding how or
where the disclosures must be served, counties have developed
different practices to address this issue. For example, Santa
Clara County employs a local rule which allows a petitioner, in
the case of publication, to file his or her preliminary
financial disclosures with the Superior Court. (Super. Ct. Santa
Clara County, Local Family Rules, Rule. 1(J)(3).) However, the
instructions on the Judicial Council form created for serving
the petition by publication or posting indicate that any
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documents posted must be mailed to the last known address. (See
Code Civ. Proc. Sec 415.50; Judicial Council Form FL-982 found
at < http://www.courts.ca.gov/documents/fl982.pdf.> [as of April
29, 2015].) Because these disclosures contain personal financial
information (e.g., tax returns, and bank/credit card account
numbers and balances) mailing to a respondent's last known
address creates the possibility a third party may come into
possession of the petitioner's sensitive information.
As noted above, this bill would address that issue by instead
providing that preliminary disclosures in cases where the
petitioner provided service by publication or posting need not
be completed unless the respondent actually responds to the
petition. Accordingly, this bill seeks to save these
petitioners the time and expense of preparing preliminary
disclosures and protect against the possibility that sensitive
financial information will fall into the hands of third parties.
Support : None Known
Opposition : None Known
HISTORY
Source : Executive Committee of the Family Law Section of the
State Bar (FLEXCOM)
Related Pending Legislation : None Known
Prior Legislation :
AB 1406 (Committee on Judiciary, Chapter 107, Statutes of 2012)
set a 60 day time limit for the preliminary declaration of
disclosure, as specified, and required the preliminary
declaration of disclosure of assets to include all tax returns
filed by the declarant within the two years prior to the date
that the party served the declaration.
AB 939 (Committee on Judiciary, Chapter 352, Statutes of 2010)
made various changes to family law proceedings thereby
implementing a number of the legislative recommendations issued
by the Elkins Family Law Task Force.
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