The division of marital assets is often a contentious part of a divorce proceeding. Since California is a “community property” state, this is an extremely important phase in cases arising in this jurisdiction. According to Section 2601 of the Family Code, all property (including assets and debts) accumulated during the marriage is subject to equal division between the separating spouses. In order to identify, characterize, and value the assorted property, spouses are first expected to make sufficient disclosures under the law. Courts have the authority to set aside a judgment if one party fails to adequately disclose interests in marital assets. In order to be sure your financial rights are fully protected in divorce, you are strongly encouraged to contact a local San Diego family law attorney who has extensive experience handling such cases.
In an earlier blog post, we reported on a high profile divorce case involving a former owner of the LA Dodgers. There, a California court reviewed the wife’s petition to set aside the couple’s marital settlement agreement (the “MSA”) and judgment. She argued that her husband did not comply with the Family Code’s disclosure requirements regarding the value of the LA Dodgers, including assets associated with the team. Due to his lack of disclosure, she asserted that he engaged in fraud and that she was entitled to an equal division of assets under state law. Based on his alleged misrepresentations, the wife claimed she had the “mistaken belief” that the team-related assets as a whole were worth only $300 million.
Here, the parties were married in 1979. The wife had a law degree and later went to school for a master’s degree in business administration. After working as an attorney for more than a decade, she began working as the general counsel for her husband’s businesses. In 2004, the husband bought the LA Dodgers baseball team. In 2005, the wife became the president of the team, and between 2004 and 2009, she was responsible for the day-to-day management of the Dodgers. In late 2009, the wife was fired from her position, and in October of that same year, she filed for divorce. The underlying facts reveal that the wife was represented by six different law firms throughout the divorce proceedings.
After disclosure statements were exchanged and extensive discovery took place, the marriage was dissolved in October 2010, but the court retained jurisdiction to resolve other issues. At some point thereafter, the team filed for bankruptcy protection. After this development, the spouses filed updated income and expense declarations, and Major League Baseball filed a motion to obtain approval of a plan to market and sell the team. Both parties were aware that the husband was considering selling the team. A few days later, in October 2011, the parties entered into a MSA that provided, among other things, that the husband would pay the wife $131 million in cash for her share of the team (and its assets).
In March 2012, a company bid $2.15 billion for the team, and the Dodgers later announced an agreement for the sale. In September 2012, the wife moved to set aside the MSA and judgment. The trial court concluded that she failed to produce sufficient credible evidence to show that her husband concealed or misrepresented any information pertaining to the Dodgers assets. Here, the court said, the element of reliance was not met. The wife appealed. The court of appeals affirmed the ruling, rejecting all of her arguments, including her husband’s failure to comply with the Family Code’s disclosure requirement.
This case nicely illustrates the need to be fully aware of what constitutes marital property and the proper ways to value such assets. An experienced family law attorney would be able to sort through every detail while seeking to protect your financial interests. Roy M. Doppelt has been representing parties involved in family law disputes for more than 20 years. Doppelt and Forney, APLC serves clients throughout Southern California, including San Diego, Encinitas, La Jolla, and Chula Vista. For a free consultation, contact Doppelt and Forney, APLC through our website, or give us a call toll-free at (800) ROY IS IT (769-4748).
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