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Case of the Month Archive

June 2017

Do-it-yourself division of CP items does not deprive trial court of jurisdiction to divide them equally . . .

 

In reversal, Third District holds that trial court erred by denying wife’s motion to divide unadjudicated community property under Fam C §2556 because wife was not required to file prior motion for set-aside of default disso judgment before seeking division and was not precluded from seeking division some two years after disso judgment was entered

 

In re Marriage of Huntley

(April 17, 2017)

California Court of Appeal 3 Civil C080534 10 Cal.App.5 th 1053 , 216 Cal.Rptr.3d 904, 2017 FA 1786, per Hoch, J (Butz, Acting PJ and Renner, J, concurring). Yolo County: White, J, reversed. For appellant: Matthew Smith, (530) 758-7800. For respondent: Pamela Bair, CFLS, (530) 756-2247. CFLP §J.2.0.2.

 

Frank and Deanna Huntley were married in 2000 and separated in June 2011. In December, Frank served Deanna with a disso petition, an I&E declaration, and a property declaration, which listed the family home as their only property. Deanna did not respond to the petition, and in July 2012, Frank filed a request for default, which he served on her. The trial court entered a default judgment in October 2012, which dissolved the parties’ marriage, but did not mention any community property. Some time after that, Deanna signed a grant deed conveying her interest in the family home to Frank.

 

In January 2014, Deanna filed a motion under Fam C §2556, seeking to adjudicate omitted community property. At a subsequent hearing, the trial court reasoned that Deanna should have been aware that no property orders were made in the default judgment and filed a motion to set aside the judgment, since she was fully aware of the parties’ assets and debts and had been in charge of paying their bills during the marriage. In the meantime, the lower court reasoned, the parties’ community assets were held as per their title, retirement accounts were owned solely by the party who earned them, and the parties had divvied up their furniture and furnishings. In addition, the trial court continued, the fact that Deanna had signed the grant deed supported Frank’s claim that he and Deanna had an oral agreement to divide their community debts and assets. Finding that the case was concluded, the trial court denied Deanna’s motion.

 

Deanna appealed, and the Third District reversed and remanded.

 

Left out, but not forgotten . . .
Deanna contended that Fam C §2556 gave the lower court continuing jurisdiction to divide unadjudicated or omitted assets without a prior motion to set aside the default judgment. The justices found that her contention “has merit.” The panel explained that a spouse’s entitlement to a share of the parties’ community property may be altered only by a judicial decree or the parties’ own agreement. Moreover, they continued, property that is not mentioned in the disso pleadings is not affected by the disso judgment and remains unadjudicated until future litigation. In the meantime, the panel noted, that property is held by the parties as tenants in common.

 

The KISS principle . . .
The panel noted that when the Legislature enacted former CC §4353, later codified without change as Fam C §2556, it intended to do away with the then-existing requirement that a party must file a new action to obtain division of community assets omitted from the disso judgment. The panel found that the statute gives the trial court continuing jurisdiction to divide omitted assets without the moving party’s having to file a set-aside motion, and requires that court to divide the unadjudicated assets equally, unless an unequal division is required by a finding of good cause or the interests of justice. Moreover, it applies even where the parties were aware of the extent of their community property when the disso judgment was entered. And, the justices pointed out, it contains no time limit for filing a motion under its provisions.

 

In writing or on the record . . .
Frank urged the justices to follow the lower court’s determination that the parties had previously divided their community property per their oral agreement, leaving it with nothing to divide. Not so, the justices said. Any agreement that the parties made, the panel found, was not valid or binding on the trial court unless it was in writing or recited on the record, neither of which was the case here. Thus, the trial court still had the duty to divide the parties’ community property equally and had not been deprived of jurisdiction by any alleged oral agreement of the parties. Given all that, the justices concluded, the trial court’s disso judgment must be reversed and the matter remanded for further proceedings.

 

 

Comment

  

Many family law attorneys are used to thinking of Fam C §2556 as a kind of oops statute that gives the trial court continuing jurisdiction to divide community assets that weren’t known or were concealed when the other community property was divided. For those attorneys, this case will be a real eye-opener. Turns out that the statute applies where, as here, the parties knew about all of their community property, but the trial court didn’t divide it in the disso judgment. Moreover, there is no time limit for a party to seek adjudication of unadjudicated or omitted assets. And, even if the parties have divvied-up their property themselves, the trial court may redo the division if they have not reduced their division to writing or recited it orally on the record.

 

 

For Frank, as for others in his shoes, Deanna’s action must have come as a rude surprise. He must have thought that the disso was long since over and done with. Unfortunately, that was not the case. We are inclined to believe that this problem will come up more frequently in cases where the parties are in pro per. We like to believe that most family law attorneys would not leave the parties’ assets and liabilities unadjudicated.

 

 

 
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