There’s No “Hiding the Ball” in Family Law Cases: The Importance of Understanding your Fiduciary Obligations to your Spouse or Domestic Partner
The California Family Code incorporates the rules of civil discovery that are generally applicable in all civil cases. Discovery is the process by which the parties to a legal dispute obtain information about the other side’s case so that the parties can engage in informed settlement negotiations and prepare their case for trial. Discovery devices include interrogatories (written questions to the other party requiring written responses under oath), depositions (taking oral testimony under oath from the other party), and inspection demands (requiring the other party to produce documents and/or tangible things for inspection).
In an ordinary “arm’s length” civil case (a contract dispute, for example), it is crucial to utilize these procedures effectively, as they are often the only means available to obtain information about the other side’s case. Parties in “arm’s length” civil disputes ordinarily have no independent duty to give the other side any information outside of the discovery process.
While discovery sometimes has its purpose in family law cases, there is an important distinction that makes family law cases unique. Under the Family Code, spouses owe one another fiduciary obligations both during the marriage and after separation. In other words, spouses must act “with the highest fairness and honor” in their dealings with one another. This is the highest duty known to the law. It is akin to the duty an attorney owes to his or her client and the duty owed to a business partner.
Why is this significant? It is significant because it means spouses have an independent obligation to disclose all material facts and information regarding the existence, characterization, and valuation of assets and debts, and all information about income and expenses, without request. This duty applies both during marriage and after separation until the date the asset or liability in question is actually distributed and, as to support and professional fees, until a binding resolution is reached on these issues. A spouse need not conduct formal discovery to enforce these obligations.
The consequences for violating one’s fiduciary duty can be devastating. Emblematic of this is the landmark California Court of Appeals decision in In re Marriage of Feldman, in which the court upheld an order levying $390,000 in sanctions against the husband for the husband’s failure to disclose financial information. The Feldman decision, issued in 2007, has generated much discussion in the legal community and is a significant articulation of the importance of this issue.
Other significant consequences can result from failure to adhere to spousal fiduciary obligations beyond monetary sanctions. It is therefore essential that parties initiating dissolution proceedings are aware of their rights and obligations from the outset, and that they carefully abide by the rules governing fiduciary obligations to avoid adverse consequences down the road.
If you have questions regarding your fiduciary obligations or those of your spouse, please contact the experienced Family Law attorneys at Lonich Patton Erlich Policastri for further information. Please remember that each individual situation is unique and results discussed in this post are not a guarantee of future results. While this post may include legal issues, it is not legal advice. Use of this site does not create an attorney-client relationship.
I need some help. My divorce was final 7 years ago and here is some basic info..the case was starkman vs. starkman and it went all the way to the appellete court. My former husband is an heir to UPS.. his great grandfather founded. He remarried..we have two children that we share though his home is their main home. Over past seven years he keeps taking me to court to say he is going broke. He lives lavish lifestyle and has show jumping horses and travels around doing that. I have negotiated down in my support with him..this october he just stopped paying. I lost my house and used up my savings relocating and getting better employment. We made a new agreement and he pays me 1500. per month until next feb. when we go back to court and have the judge review it. He claims his mother now pays for everything for his household ….she bought his house from him..nothing is in his name now. He only paid me half of the 1500. this month and sent me a letter stating that his tenant is going to be late on the rent and he will pay me balance of the 14th…nothing yet here. Here is the deal…I am reasonable to a fault but now I am just done. When UPS went public a number of years ago my former husbands wealth went to 10 million…his mother became worth 100 million. Her name is Linda Starkman. She is building a Horse facility equal to the Earl Warren Showgrounds in Santa Barbara. There is no lack of finances. Can I go after his property? Can I make his mother pay? My goal is to get someone to represent me and go for assets. When I was first divorced I received 16k per month spousal plus child support. I had a house…I had money to provide for my children. I work full time and have no retirement fund. I had a plan for the future with my house but I had to sell it as support declined I could not afford it. I just really need some help. Thank You.