California Court Upholds Decision to Set Aside Divorce Judgment

bank-loan-concept-1446014-1-m.jpgCalifornia law sets forth certain grounds on which parties may petition a court to set aside a divorce judgment. These grounds include actual fraud, perjury, duress, mental incapacity, mistake of law or fact, and the failure to comply with statutory disclosure requirements. The law also grants courts the discretion to determine whether one party or the other has presented sufficient evidence to set aside a judgment. In most divorce cases, spouses feel some relief when the court issues the final judgment. But in some cases, one spouse may find legitimate grounds to set aside the decision. No matter what the situation, it is vitally important that the parties each consult with their own family law attorney at the outset to ensure that their rights are protected. Couples are encouraged to reach out to an experienced divorce lawyer from the San Diego area, someone who is fully aware of the laws affecting their family.

In a recent divorce case, the husband moved to set aside the divorce judgment, claiming that he had made a mistake concerning the value of the former family home. When a married couple divorces, their accumulated community assets will be divided between them. In many cases, the family home represents the couple’s largest jointly owned asset, subject to division in divorce. Any errors, mistakes, or deliberate deception with respect to the value of a family home may provide sufficient grounds to set aside a divorce judgment.

Here, the couple got married in 1996, and the husband filed for divorce in 2012. They have two children. The parties agreed that the wife would be awarded the family home, which had an estimated equity value of $22,000 and a mortgage balance of $580,000, totaling $602,000. The wife was required to make all mortgage payments, and the husband agreed to make an “equalization” payment of $40,000. The final divorce judgment included these agreed-upon terms. As part of this agreement, the wife was required to refinance the home. She sought the husband’s signature on the documents, but he refused to sign them after discovering the bank’s valuation of the home at $699,000.

The husband petitioned the court to: 1) set aside the portion of the divorce judgment regarding the value of the home, 2) appraise it for the current value, 3) have the equity in the home equally divided between the couple, and 4) have the wife pay attorney fees and costs as sanctions. The husband claimed that the judgment should be set aside on the grounds of fraud, perjury, duress, and mistake of fact under Civil Procedure Code Section 473 and Family Code Section 2122. He alleged that his wife “manipulated” the home’s value by choosing only comparable homes that supported the value she sought. He further claimed that he relied on the wife’s expertise in real estate, since she was a former broker.

The trial court found insufficient evidence of actual fraud, duress, or perjury, and it instead granted the husband’s motion entirely under Section 473. The wife appealed, arguing that the husband’s mistake regarding the value of the home was not one that entitled him to relief under Section 473. The court of appeals concluded that it did not need to review the parties’ arguments under Section 473 by concluding that the lower court acted within its discretion in setting aside the judgment under Section 2122. Under California case law, the failure of a spouse to disclose the existence or value of community assets constitutes a basis for setting aside a judgment on the grounds of mistake under Section 2122.

Here, the court found, among other things, sufficient evidence to prove that the husband had been misled into believing the value of the home was lower than it actually was. The court reversed the judgment and remanded the matter back to the trial court. This case nicely illustrates the importance of accurately identifying, characterizing, and valuing community property in divorce.

Spouses who are considering divorce are encouraged to consult with a family law attorney in order to adequately protect their respective financial rights. Roy M. Doppelt is a matrimonial attorney with more than 20 years of experience representing parties in family law disputes. His office serves clients throughout Southern California, including San Diego, Encinitas, La Jolla, and Chula Vista. For a free consultation, contact Doppelt & Forney through our website, or give us a call toll-free at (800) ROY IS IT (769-4748).

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