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The Finances Of Divorce

Be Warned!! Disclosure in divorces: In Marriage of Fong

The recent case of In re Marriage of Fong, 193 Cal.App.4th 278, 123 Cal.Rptr.3d 260, 3/3/2011 once again shows the risks for non-disclosure of community assets. in that case Husband was sanctioned $100,000 in attorneys fees for non-dsclosure

An interesting extract from the case:


"Gary contends the trial court failed to consider his ability to pay. A court awarding attorney fees and costs as a sanction under section 271 must consider "all evidence concerning the parties' incomes, assets, and liabilities" and must not impose an unreasonable financial burden on the sanctioned party. (Id., subd. (a).) Gary's final declaration of disclosure and income and expense declaration, filed in April 2008, was presented at the hearing on the motion. His disclosed assets included nine rental properties, his personal residence (a ranch), ten cars, a yacht, savings accounts, gold coins, and other items. Gary does not cite or discuss this evidence or argue that it is insufficient to justify the amount of the award. Instead, he argues in a conclusory manner and without citing the record that the court failed to consider his ability to pay. We conclude that Gary has not shown that the court failed to consider the evidence in the record and therefore has shown no error on this basis.*N5

Gary also contends the award is excessive in light of the trial court's prior orders awarding Marci a total of $272,500 in attorney fees for various reasons. We note that some of those orders stated that the awards were subject to later reallocation, if appropriate. Gary does not discuss the evidence of his ability to pay and has not shown that the award is excessive in light of that evidence, and therefore has shown no error on this basis.

Gary also argues that the evidence does not support the trial court's finding that his conduct frustrated settlement and cooperation between the parties and counsel. He cites evidence of his informal disclosures and purported cooperation in settlement efforts. In our view, the cited evidence does not compel the conclusion that the court's factual finding was erroneous.

Marci presented evidence that Gary had failed to fully and timely respond to discovery concerning bank records, mortgage loan applications, refinancing, and rental income; failed to cooperate in obtaining bank records directly from the Canadian banks; failed to respond to her two settlement offers; produced at trial bank records that he had failed to produce in response to discovery requests seeking those records; refinanced community real property on several occasions in violation of a court order; failed to provide an accounting of all rents and refinances and the disposition of those proceeds, as required by the order of March 21, 2007; and attempted to sell real property in Canada in violation of a court order. The trial court reasonably could conclude based on this evidence that Gary's conduct frustrated settlement and cooperation between the parties and counsel and justified an award of attorney fees and costs under section 271.

Finally, Gary argues that the trial court abused its discretion by awarding attorney fees and costs under section 271 to a party whose own conduct had frustrated settlement and cooperation between the parties and counsel. He notes Marci's failure to serve her preliminary declaration of disclosure until more than three years after filing her petition for dissolution, her "unreasonable" settlement proposal, and her filing of a duplicative proceeding in Canada. He argues that the court effectively awarded a noncomplying party for her noncompliance and that this cannot be what the Legislature intended.

The trial court awarded Marci $100,000 in attorney fees and costs under section 271 as a penalty for Gary's noncompliance and uncooperative conduct. As the party in possession of a greater share of the community assets, Gary bore a greater burden of disclosure and fiduciary responsibility with respect to the community assets. Unlike section 2107, subdivision (c), section 271 does not necessarily require that the moving party be in compliance with particular obligations before moving for an award. Although the extent to which the moving party's conduct furthers or frustrates settlement may be an appropriate consideration for a court considering an award under section 271, Gary has not shown that Marci's conduct in these circumstances was so egregious as to compel the conclusion that the award in her favor was unreasonable and an abuse of discretion."

Los Angeles Divorce Lawyer

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