Sen. Judiciary

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SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015 - 2016 Regular Session
SB 340 (Anderson)
Version: February 23, 2015
Hearing Date: May 5, 2015
Fiscal: No
Urgency: No
NR
SUBJECT
Dissolution: disclosure
DESCRIPTION
Existing law requires each party in an action for dissolution of marriage or legal
separation to serve a preliminary declaration of disclosure of assets, and a final
declaration of disclosure on the other party. In the case of a default judgment, a
petitioner may waive the final disclosure requirements.
This bill would state that a petitioner is not required to provide a preliminary
declaration of disclosure if the petitioner served the summons and petition by
publication or posting pursuant to court order, and the respondent has not responded.
The bill would require, when a petitioner has served the summons and petition by
publication or posting and the respondent files a response prior to default judgment
being entered, the petitioner must serve the respondent with a preliminary declaration
of disclosure within 30 days.
BACKGROUND
The Elkins Family Law Task Force, appointed in 2008 for the purpose of conducting a
comprehensive review of family law proceedings, produced a final report which
contains 21 main recommendations. (Elkins Family Law Task Force: Final Report and
Recommendations, (April 2010) Judicial Council <http://www.courts.ca.gov/
documents/elkins-finalreport.pdf> [as of March 24, 2015].) While many of the Task
Force ’s recommendations have been implemented by the courts, whether through Rule
of Court or informal policy change, others require statutory changes. In 2010, AB 939
(Committee on Judiciary, Ch. 352, Stats. 2010) was enacted to implement most of the
Elkins Task Force’s key legislative recommendations. Again in 2012, AB 1406
implemented another specific recommendation of the Task Force by setting a deadline
for service of preliminary financial disclosures and requiring the parties to include tax
returns from the two previous years. (AB 1406, Committee on Judiciary, Ch. 107, Stats.
SB 340 (Anderson)
Page 2 of 5
2012.) However, key recommendations from the report have yet to be adopted. For
example, one recommendation was to create more comprehensive, statewide rules. The
need for this change was argued for by local family court staff who noted, “for local
rules it is kind of crazy, because you have the same law being administered in different
ways in 58 counties. I think more uniformity would be good.” (Id. at 30.)
The lack of uniformity is evident in many places where the code is silent and counties
are left to fill in any necessary gaps. The subject of this bill, financial disclosures
between spouses in an action for divorce where one spouse cannot be located and
defaults after being served notice by publication, lacks the consistency the Task Force
called for in its recommendations. Specifically, when a person files for divorce, the law
requires the petitioning spouse to serve notice of the summons and the petition for
divorce on the other spouse. Both parties are also required to provide preliminary
financial disclosures to the other party. In cases where the whereabouts of both spouses
are known, service is relatively straight forward and can be accomplished in a number
of ways, including in person or by mail. (See Code Civ. Proc. Secs. 415.10; 1012.)
However, if the location of the responding spouse is unknown, notice and service
become more problematic. In these cases, the court may allow the petitioning spouse to
give “notice by publication” and publish the relevant information in a newspaper “most
likely to give notice to the party served.” (Code Civ. Proc. Sec. 415.50.) The requirement
of financial disclosure, however, is not so easily solved when the other spouse’s address
is unknown. Because the Family Code does not specify how financial disclosures must
be completed, there are inconsistencies in practice. Some counties have developed
systems through local rule of court, some rely on general service provisions under the
Code of Civil Procedure, and the Judicial Council has created a form which requires
that disclosures are sent to a respondent’s last known address.
Accordingly, this bill seeks to better implement the Task Force recommendation for
more statewide uniformity in family law procedures. By creating a very narrow
exception to the mandatory financial disclosure rules in cases where the petitioner
served the petition by publication or posting and the respondent has defaulted.
CHANGES TO EXISTING LAW
Existing law provides that parties to a dissolution or legal separation must serve on the
other party a preliminary declaration of disclosure of all assets and liabilities in which
one or both parties may have an interest. (Fam. Code Sec. 2103.)
Existing law provides that the preliminary declaration of disclosure of assets must be
served concurrently or within 60 days service of the petition for dissolution of marriage
or legal separation of the parties, and must be signed under penalty of perjury. (Fam.
Code Sec. 2104.)
SB 340 (Anderson)
Page 3 of 5
Existing law prohibits the court from entering a judgment regarding the parties’
property rights in a dissolution proceeding unless each party has submitted a final
disclosure declaration and a current income and expense declaration. (Fam. Code Sec.
2106.)
Existing law allows the petitioner, in the case of a default judgment, to waive the final
declaration of disclosure requirements. (Fam. Code Sec. 2110.)
This bill would provide that a preliminary declaration of disclosure is not required by a
petitioner if the petitioner served the summons and petition by publication or posting
pursuant to a court order, and the respondent has defaulted.
This bill would provide that when a petitioner serves the summons and petition by
publication or posting and the respondent files a response prior to a default judgment
being entered, the petitioner must serve the respondent the preliminary declaration of
disclosure within 30 days of the response being filed.
COMMENT
1. Stated need for the bill
According to the author:
The court can approve service by publication or posting in cases where the
respondent cannot be served with reasonable diligence in another manner
authorized by statute (Code of Civil Procedure Section 415.50). In these cases, if the
respondent defaults, and most do, it can reasonably be assumed the respondent will
not get actual notice of the disclosures, making petitioner’s efforts in completing,
filing and serving the required forms an unnecessary expenditure of time and
resources. These disclosures, which often contain personal financial information,
like bank account and credit card account numbers and balances, must be mailed to
the last known address, so there is the possibility a third party may come into
possession of the Petitioner’s sensitive financial information. These disclosures are
not filed with the court, so eliminating the requirement to serve a defaulting spouse
with these forms, when service is by publication or posting, will not deprive the
court of needed information.
2. Does not create exception for respondent to serve preliminary disclosures
This bill would exempt a person who is seeking a divorce and cannot locate her spouse,
from the obligation of serving preliminary financial disclosures on the missing spouse if
notice by publication has been approved by the court.
SB 340 (Anderson)
Page 4 of 5
This bill does not exempt the missing spouse, who has been served notice by
publication, from the obligation to provide preliminary financial disclosures. If the
respondent does, in fact, respond to the notice by publication, the petitioner is required
to serve preliminary declarations upon the respondent within 30 days of that response,
and the respondent must make those same disclosures within 60 days. Accordingly, the
only difference between the requirements under existing law and those set forth under
this bill are that a petitioner would not be required, in the rare situation that she gave
notice by publication, to send financial information to an address where the respondent
no longer lives.
Staff notes that it is in a respondent’s best interest to respond, and not default, to a
petition for dissolution to ensure that both parties are able to present information to the
court prior to the division of assets. When a respondent defaults, the court only reviews
information that the petitioner has provided. Judicial Council has created a number of
forms to assist a petitioner who is asking the court to divide property. For example, the
“Request to Enter Default” form (FL-165) should be accompanied by a “Property
Declaration” form (FL-160) and a “Proposed Judgment” form (FL-180) to help the court
make the division of property. Further, under existing law (and this bill) if a petitioner
lies about not knowing where the respondent is in order to get permission to serve by
posting or publication, the entire judgment could subsequently be set aside due to
fraud.
3. Privacy
Existing law requires that preliminary financial disclosures be served on a spouse
concurrently or within 60 days service of the petition for dissolution of marriage. This
bill would eliminate this requirement for an individual who is unable to locate his or
her spouse and has, with the court’s approval, served the petition by publication. In the
event that a spouse does respond to the publication, this bill would require the
petitioner to serve the respondent with the preliminary financial disclosures within 30
days.
The Executive Committee of the Family Law Section of the State Bar (FLEXCOM), the
sponsor of this bill, explains that, “in the vast majority of cases where service was
accomplished by publication or posting, respondents default in the case, meaning they
never appear or participate in the case.” Thus, preparing the financial disclosures is
arguably unnecessary expenditure of time and resources because a defaulting
respondent will never see the disclosures and the court does not evaluate them to
determine the disposition of the case.
In addition, because existing law is silent regarding how or where the disclosures must
be served, counties have developed different practices to address this issue. For
example, Santa Clara County employs a local rule which allows a petitioner, in the case
of publication, to file his or her preliminary financial disclosures with the Superior
SB 340 (Anderson)
Page 5 of 5
Court. (Super. Ct. Santa Clara County, Local Family Rules, Rule. 1(J)(3).) However, the
instructions on the Judicial Council form created for serving the petition by publication
or posting indicate that any documents posted must be mailed to the last known
address. (See Code Civ. Proc. Sec 415.50; Judicial Council Form FL-982 found at <
http://www.courts.ca.gov/documents/fl982.pdf.> [as of April 29, 2015].) Because
these disclosures contain personal financial information (e.g., tax returns, and
bank/credit card account numbers and balances) mailing to a respondent’s last known
address creates the possibility a third party may come into possession of the petitioner’s
sensitive information.
As noted above, this bill would address that issue by instead providing that preliminary
disclosures in cases where the petitioner provided service by publication or posting
need not be completed unless the respondent actually responds to the petition.
Accordingly, this bill seeks to save these petitioners the time and expense of preparing
preliminary disclosures and protect against the possibility that sensitive financial
information will fall into the hands of third parties.
Support: None Known
Opposition: None Known
HISTORY
Source: Executive Committee of the Family Law Section of the State Bar (FLEXCOM)
Related Pending Legislation: None Known
Prior Legislation:
AB 1406 (Committee on Judiciary, Chapter 107, Statutes of 2012) set a 60 day time limit
for the preliminary declaration of disclosure, as specified, and required the preliminary
declaration of disclosure of assets to include all tax returns filed by the declarant within
the two years prior to the date that the party served the declaration.
AB 939 (Committee on Judiciary, Chapter 352, Statutes of 2010) made various changes
to family law proceedings thereby implementing a number of the legislative
recommendations issued by the Elkins Family Law Task Force.
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