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The 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.
