Sanctions, Fees Ordered for Spouse who Concealed Income in Divorce Case – In re Marriage of Vazquez

Trust is the cornerstone of any marriage, and the lack of it permeates a great many divorces. In In re Marriage of Vazquez, California’s Fourth District Court of Appeal explains that lying about income and other information in a divorce proceeding can be very costly.

the-truth-shall-make-you-free-1437041-m.jpgHusband and Wife divorced in 2008 and the court ordered Husband to pay Wife an unidentified amount of monthly child support. Wife returned to court four years later, however, arguing that Husband committed perjury by purposely misstating his monthly income.

During the 2008 proceedings, Husband asserted that he earned about $9,550 a month. Three years later, however, Wife obtained his 2008 income tax return while seeking an order to force him to contribute to their child’s orthodontic expenses. The trial court granted Wife’s motion to compel Husband to respond to a demand for inspection of documents relating to his finances, including the tax returns, which showed that Husband made nearly $21,000 a month in income during the time of the divorce. The trial court set aside its previous child support order and entered a new order requiring Husband to pay more in current child support as well as $25,000 in sanctions and more than $36,000 in attorney fees.

On appeal, the Fourth District said the trial court didn’t abuse its discretion in ordering the sanctions and fees. First, the Court found that the trial judge’s reference to the California Evidence Code section 271, rather than the same section of the state’s Family Code, as the basis for the sanctions was merely a clerical error. “Indeed, the fact that no Evidence Code section 271 even exists tends to negate any potential inference that the court itself would have based its oral pronouncement of the sanctions on that phantom authority, when it could easily have cited Family Code section 271 instead,” the Court wrote. It also noted that it assumed that the trial court’s order was correct, given that the Court had not been provided with an actual transcript of the hearing in which the trial court ordered the sanctions.

The Court also rejected Husband’s claim that the sanctions order violated his due process rights, because the trial court didn’t give him sufficient notice that they may be ordered. Specifically, he argued that Wife’s motion for sanctions, which was filed prior to the hearing, didn’t cite Family Code section 271 as the basis for the remedy. The court noted, however, that Wife identified section 271 as the sanctions justification in supporting documents attached to the motion.

The Court also said Husband waived his right to raise this due process argument. “Where, as here, a party is merely claiming that the notice of motion actually given with respect to a particular issue he knows will be decided was insufficient or defective, that claim is subject to waiver,” the court noted. “If the party shows up for the noticed hearing and argues the merits of the issue, rather than registering any objection to the defective notice, the defect is waived.”

Regardless of the process chosen to end a marriage, whether traditional litigation, mediation or Collaborative divorce, an exchange and review of income tax returns is most always part of the process and should have prevented the error that occurred in this matter where support was ordered based on incorrect income. In Collaborative law and mediation, spouses agree to voluntarily exchange any and all financial information that is reasonably necessary to negotiate optimal settlements. And they do so without court orders and the wasteful time and expense of formal discovery. Fraud and untruthfulness really have no place in a Collaborative or mediated divorce where couples commit to honest and open disclosure. To learn more about peaceful divorce and innovative approaches to resolve family law disputes without the bitterness and acrimony engendered by the adversarial process, contact the Law & Mediation Office of Lorna Jaynes.

Related blog posts:

Court: Client List, Bonus Money is Community Property – In re Marriage of Finby

Follow Procedural Rules in California Divorce Cases, Or It Might Cost You Your Case – In re Marriage of Kosharek

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