I. FACTUAL AND PROCEDURAL BACKGROUND
Husband and wife were married on February 14, 2002, and they separated on January 1, 2015. On July 21, 2015, husband petitioned the court for legal separation and filed a preliminary declaration of disclosure, which included (1) his separate property declaration (Form FL-160); (2) his community and quasi-community property declaration (Forms FL-160 & FL-161); and (3) his income and expense declaration (Form FL-150). Nine days later, a notice and
On August 24, 2015, the parties filed a stipulation and waiver of final declaration of disclosure (stipulation). According to the stipulation, the parties agreed that they had complied with Family Code sections 2102 and 2104 ; that they completed and exchanged a current income and expense declaration; that they entered into the stipulation knowingly, intelligently, and voluntarily; and that if they failed to comply with the legal disclosure obligations, "the court will set aside the judgment." Husband's attorney also caused to be filed a declaration stating that service of wife's preliminary declaration of disclosure was being filed simultaneously.
On September 25, 2015, husband requested entry of default. He did not attach either a completed income and expense declaration or financial statement because, according to him, there were no changes since the previous filing and any issues were resolved by the MSA. On November 10, 2015, a judgment of legal separation was entered and the property was divided as set forth in the MSA, attached to the judgment.
On July 12, 2016, wife filed a request for order to set aside the default judgment and MSA ( Fam. Code, § 2122, subds. (d) & (e) ), and to file a response and request for dissolution of marriage (RFO). In a supporting declaration, wife stated as follows: She received husband's documents the same day he "personally drove [her] to a notary," where he demanded that she sign them "in his presence." Husband also demanded that wife sign the MSA on July 23, 2015, "the same day that he handed [her] his Declaration of Disclosure ...." Wife pointed out that neither husband's property declaration nor his income and expense declaration contained any documents to support them, "so [she] had to rely on [his] representations of the value of the assets." Wife opined that "husband was directing [her] to sign documents that were lies." She declared that "[a]ll documents that [she] signed in the Legal Separation case were prepared by [her] husband and/or his attorney." She denied having any opportunity to consult with an attorney "outside of [her] husband's presence about whether [she] should agree to [his] demands that [she] waive spousal support after [their] long-term marriage, or any of the other terms of the MSA." Wife was also denied the opportunity to consult with a tax professional. When she filed taxes in April 2016, she "learned that the terms of the MSA converted the equalization payments from a tax-free equalization payment into a payment that is taxable to me and tax-deductible to [husband]." Because she suffers from depression, her ability to act in her own best interest was impaired. Wife also filed a memorandum of points and authorities and an income and expense declaration. And, she lodged the declaration of her primary care physician who confirmed that she suffers from depression
On February 9, 2017, wife replied to husband's opposition, reiterating her request to vacate the judgment due to husband's failure to disclose relevant information, mistake of fact as to both parties, and the complication of wife's depression. In support of her reply, wife lodged husband's responses to her discovery requests. According to the documents lodged, husband objected to most of wife's discovery requests, agreeing to respond to specified discovery only if the judgment is set aside.
The matter was heard on February 16, 2017, and on March 9, 2017, the trial court granted wife's RFO on the grounds of mistake of fact.
II. DISCUSSION
A. Applicable Legal Principles.
"Marriage creates a fiduciary relationship between spouses. [Citations.] The confidential relationship between spouses 'imposes a duty of the highest good faith and fair dealing on each spouse ....' [Citation.] As part of these obligations, each spouse is required to provide the other spouse with access to all books regarding transactions for purposes of inspection and copying [citation], and rendering upon request 'true and full information of all things affecting any transaction which concerns the community property.' [Citation.] Additionally, spouses must make full and accurate disclosure and account for separate and community property. [Citations.] The duty of disclosure 'includes the obligation to make full disclosure to the other spouse of all material facts and information regarding the existence, characterization, and valuation of all assets in which the community has or may have an interest ....' [Citation.]
"The parties also have 'a continuing duty to update and augment that disclosure to the extent there have been any material changes so that at the time the parties enter into an agreement for the resolution of any of these
Section 2122 governs motions to set aside judgments in dissolution proceedings. Under this statute, there are six grounds to set aside a judgment: actual fraud, perjury, duress, mental incapacity, mistake, or failure to comply with the disclosure requirements. ( § 2122, subds. (a) -
An order granting a motion to set aside a judgment under section 2122 is reviewed under an abuse of discretion standard. ( In re Marriage of Rosevear (1998)
B. The Trial Court Did Not Violate Section 217.
Husband contends the trial court erred by failing to receive live testimony in contravention of section 217. He faults the court for allowing wife to " 'rest on the pleadings,' " instead of presenting evidence, and he argues that while this "may have been an acceptable practice prior to the passage of [ section] 217... it does not accord with the clear mandate of [ In re Marriage of Shimkus (2016)
For decades, practitioners have enjoyed the informality and flexibility afforded in marital dissolution proceedings. Nonetheless, these proceedings are governed by the same statutory rules of evidence and procedure applicable in other civil actions. ( Elkins v. Superior Court (2007)
In Elkins , the Supreme Court reiterated the supremacy of statutory rules of evidence and procedure when it struck a local court rule that called for the
The February 16, 2017, proceeding at issue in the present case did not involve a contested marital dissolution trial, as was the issue in Elkins . It involved a hearing that falls under section 217, which gives the parties the right to present live testimony instead of relying on declarations. However, section 217 does not mandate live testimony when the parties indicate their desire to rely solely on declarations. Rather, the right to live testimony may be forfeited. ( Mendoza v. Ramos (2010)
In the present case, neither party presented live testimony at the hearing. The court began the hearing by confirming that both husband and wife had been sworn in. In response to the court's inquiry of a time estimate, wife's counsel replied: "If the Court could give us a preliminary-an indication of the Court's intended, I may just rest on the pleadings." Husband's counsel replied, "Probably 15 minutes-ten, 15 minutes, if it's just going to be attorney argument." The following exchange then occurred:
"[HUSBAND'S COUNSEL]: I believe that testimony may be necessary depending on the tentative of the Court, but our position is ... that this judgment is ironclad.
"THE COURT: I'm sorry?
"[HUSBAND'S COUNSEL]: Our position-
"THE COURT: I know what your position is. I'm trying to get a time estimate ... I know very well what your position is. I've read the paperwork. In fact, I guess I should [recite] on the record what I read." The court then recited each of the documents it had reviewed and considered.
The court invited wife's counsel to proceed:
"[WIFE'S COUNSEL]: Thank you, Your Honor. I-in my belief, this has been adequately pled supported by the testimony of [wife], and I am willing to rest on the pleadings, sir.
"THE COURT: Thank you. This is a very important issue, obviously, involving basically all of the assets as well as spousal support, and so it's a very important issue, and I want you to understand that. [Wife's counsel], anything else?
"[WIFE'S COUNSEL]: If the Court has any questions he would like to direct my client, I would be open to that as well.
"THE COURT: Thank you. [Husband's counsel]?
Following argument, the trial court took the matter under submission. Wife's request was granted and the judgment was set aside.
According to husband, absent live testimony there was no evidence presented to support the trial court's ruling. Not so. While section 217 requires the court to receive "relevant" testimony that is "within the scope of the hearing" when offered by the parties ( § 217, subd. (a) ), it does not foreclose the parties from submitting evidence through other means, such as declarations, pleadings, etc. (§ 210 ["the rules of practice and procedure applicable to civil actions generally ... apply to, and constitute the rules of practice and procedure in, proceedings under this [Family] code."]; Code Civ. Proc., § 2009 ["An affidavit may be used ... upon a motion."].) If husband wanted to testify or examine wife, he could have informed the court of his intent to do so. He did not. Rather, he stated: "I believe that testimony may be necessary depending on the tentative of the Court, but our position is ... that this judgment is ironclad." The court responded by informing the parties of each document it had read and reviewed. Husband never indicated that the contingency he anticipated-that live testimony is necessary-had occurred, nor did he explicitly request to present live testimony.
Nonetheless, citing Shimkus , supra , 244 Cal.App.4th at pages 1270 through 1271,
On appeal, the wife challenged the trial court's failure to "automatically" admit the declarations. ( Shimkus , supra , 244 Cal.App.4th at pp. 1269-1270,
The facts in Shimkus are distinguishable from those presented in this case. Here, the trial court never limited receipt of evidence to live testimony. Rather, it asked the parties whether they would be presenting live testimony. In response, they indicated that testimony may be necessary depending on the court's position, otherwise, the matter was adequately pled. When the court listed each of the documents it had reviewed, husband did not raise any evidentiary objection. Rather, he relied upon the documents in support of his argument. His actions indicate an implicit agreement between the parties to rely on the documents submitted, unless the court directed otherwise.
Likewise, husband has not argued that any objection to the alleged failure to comply with section 217 would have been futile. Thus, as in Mendoza , supra ,
On March 26, 2018, Husband notified this court about new legal authority that he is relying upon to support his argument: In re Marriage of Swain (2018)
On appeal, the appellate court reversed, finding that the trial court erred in relying on wife's declaration. ( Swain , supra , at pp. 843-844,
Assuming, without deciding, that the court's actions constituted a refusal to receive live testimony, we conclude that the court made a sufficient finding of good cause under the circumstances of this case. ( § 217, subd. (b) ["In appropriate cases, a court may make a finding of good cause to refuse to receive live testimony and shall state its reasons for the finding on the record or in writing."].) As set forth above, the trial court began by acknowledging that a substantive matter (spousal support) was at issue and that the parties were entitled to question anyone submitting reports or other information to the court. ( Cal. Rules of Court, rule 5.113(b)(1) and (4).) The court's lengthy recitation of the numerous documents that it had reviewed in preparation for the hearing notified the parties that the court was well-informed as to the relevant events and the parties' positions. The court's words that it knew
In deciding to set aside the judgment, the trial court found that husband failed to complete the preliminary and final disclosures, as evidenced by the following: (1) there were no supporting documents attached to the preliminary disclosure; (2) the stipulation was prepared by husband's attorney; (3) wife never actually exchanged any documents with husband; (4) husband was unable to produce copies of the documents that support the preliminary disclosure; and (5) husband has over $400,000 in cash and checking accounts that was not disclosed in his income and expense declaration. Husband asserts that the trial court erroneously relied upon an incorrect legal standard when finding the failure to complete preliminary and final disclosures provided sufficient grounds to vacate the judgment.
"The Family Code requires the parties to a dissolution proceeding to serve on each other a preliminary, sworn declaration, on forms prescribed by the Judicial Council, identifying all assets and liabilities. ( Fam. Code, § 2104, subds. (a) & (c).) Similarly, before the parties to a dissolution proceeding enter into an agreement for the resolution of property issues, or before any trial, each must serve on the other 'a final declaration of disclosure and a current income and expense declaration, executed under penalty of perjury on a form prescribed by the Judicial Council ....' ( Fam. Code, § 2105, subd. (a).) These mandatory statutory requirements cannot be waived, except in strict compliance with provisions of the statute. [Citation.]" ( In re Marriage of Burkle (2006)
III. DISPOSITION
The order is affirmed. Wife is awarded her costs on appeal.
We concur:
MILLER, J.
FIELDS, J.
Notes
The Judicial Council adopted California Rules of Court, rule 5.113 which, in relevant part, provides:
"(a) Purpose
"Under Family Code section 217, at a hearing on any request for order brought under the Family Code, absent a stipulation of the parties or a finding of good cause under (b), the court must receive any live, competent, and admissible testimony that is relevant and within the scope of the hearing.
"(b) Factors
"In addition to the rules of evidence, a court must consider the following factors in making a finding of good cause to refuse to receive live testimony under Family Code section 217 :
"(1) Whether a substantive matter is at issue-such as child custody, visitation (parenting time), parentage, child support, spousal support, requests for restraining orders, or the characterization, division, or temporary use and control of the property or debt of the parties;
"(2) Whether material facts are in controversy;
"(3) Whether live testimony is necessary for the court to assess the credibility of the parties or other witnesses;
"(4) The right of the parties to question anyone submitting reports or other information to the court;
"(5) Whether a party offering testimony from a non-party has complied with Family Code section 217(c) ; and
"(6) Any other factor that is just and equitable.
"(c) Findings
"If the court makes a finding of good cause to exclude live testimony, it must state its reasons on the record or in writing. The court is required to state only those factors on which the finding of good cause is based." (Cal. Rules of Court, rule 5.113 (a), (b), (c), bolding omitted.)
"I have read a motion [to set aside judgment and MSA, etc.] that was filed on July 12th, 2016; I have read-I have reviewed an FL160 that was filed July 21, 2015 ... I think actually it was attached to the motion. I have reviewed points and authorities that were filed August 1, 2016 by ... [¶] ... [¶] -by [wife]; I have reviewed an Income and Expense Declaration filed September 21, 2016 by [wife]; I have reviewed an Income and Expense Declaration filed by [wife], February 3rd, 2017; I have reviewed a responsive declaration filed February 3rd, 2017; I have reviewed a memorandum of points and authorities filed February 3rd, 2017; I have reviewed an Income and Expense Declaration filed by [husband], February 3rd, 2017; I have reviewed respondent's points and authorities in reply filed by [wife], February 9th, 2017; and I have reviewed a notice of lodgment of evidence in support of respondent's points and authorities in reply filed February 9th, 2017, by [wife]."
Husband contends that "[b]y relying on Wife's declaration, without it being offered at the hearing, allowing objections, or subjecting Wife to cross examination, the trial court effectively denied Husband the basic right of due process." However, husband's reliance on his own declaration and other filed documents at the hearing belies this claim; husband is disingenuous to fault the trial court for doing the same that he did.