Marr. of Georgiou and Leslie
218 Cal. App. 4th 561
| Cal. Ct. App. | 2013Background
- Leslie and Georgiou divorced; their 2007 marital settlement agreement (MSA) divided a prospective referral fee Georgiou expected from Milberg Weiss's fee award in Enron litigation (Leslie got 10%, Georgiou 90%, plus other asset allocations).
- Leslie knew of Georgiou's referral relationship and that a large fee award was possible but did not receive a copy of the fee agreement before signing the MSA; her counsel conducted limited discovery.
- Federal court awarded Milberg Weiss $688 million in fees in 2008; Georgiou negotiated a 9% referral payment and paid Leslie portions in 2008 and 2009.
- In December 2010 Leslie sued under Fam. Code § 1101, alleging Georgiou breached his fiduciary duty by understating/concealing the referral fee and sought 50% or 100% of the fee under § 1101.
- The family court granted Georgiou summary adjudication, holding § 1101 does not permit a postjudgment action that would disturb an adjudicated asset and that Leslie’s exclusive remedy was a § 2122 set-aside action, which she did not timely bring.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1101 authorizes an independent postjudgment action to recover an allegedly concealed/diverted community asset already adjudicated by a dissolution judgment | Leslie: § 1101 creates an independent remedy (3-year statute) and may be used postjudgment to recover concealed assets | Georgiou: § 1101 does not apply to postjudgment challenges that would upset an adjudicated distribution; § 2120–2129 (esp. § 2122) provides exclusive postjudgment set-aside remedies | Court: § 1101 does not authorize a postjudgment action here because relief would upset the judgment; § 2122 is Leslie’s exclusive remedy for adjudicated assets |
| Whether the action was time-barred if treated under § 2122 | Leslie: action accrued when she learned final fee amounts in 2008; she filed within three years | Georgiou: the proper remedy was § 2122(f) for nondisclosure, subject to a 1-year discovery rule; Leslie filed after that period | Court: § 2122(f) one-year period applies to failure-to-disclose claims; Leslie’s § 2122 remedy was untimely, depriving the court of jurisdiction |
| Whether Rossi (and related precedent) supports a postjudgment § 1101 action | Leslie: Rossi shows § 1101 may be used postjudgment to recover concealed property left unadjudicated | Georgiou: Rossi is distinguishable—there the concealed asset (lottery winnings) was not adjudicated in the prior judgment | Held: Rossi is distinguishable; § 1101 may apply where asset was unadjudicated, but not where judgment already divided the asset |
| Whether summary adjudication was proper | Leslie: factual disputes preclude summary adjudication | Georgiou: legal bar (statutory exclusivity/timeliness) defeats the claim as a matter of law | Court: de novo review; summary adjudication affirmed because § 1101 remedy unavailable for adjudicated asset and § 2122 deadline was missed |
Key Cases Cited
- In re Marriage of Rossi, 90 Cal.App.4th 34 (2001) (postjudgment § 1101 recovery allowed where concealed asset was not adjudicated in judgment)
- In re Marriage of Varner, 55 Cal.App.4th 128 (1997) (discussing postjudgment relief and setting-aside judgments for misconduct)
- In re Marriage of Brewer & Federici, 93 Cal.App.4th 1334 (2001) (spouses’ fiduciary disclosure duties during dissolution negotiations)
- Rubenstein v. Rubenstein, 81 Cal.App.4th 1131 (2000) (procedural standards for summary adjudication in family law context)
- In re Marriage of Thorne & Raccina, 203 Cal.App.4th 492 (2012) (critical question is whether benefits were actually litigated and divided in prior proceeding)