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AB-2373 Dissolution of marriage and legal separation: disclosure of assets and liabilities.(2017-2018)

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Date Published: 04/05/2018 04:00 AM
AB2373:v98#DOCUMENT

Amended  IN  Assembly  April 04, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Assembly Bill No. 2373


Introduced by Assembly Member Acosta

February 14, 2018


An act to amend Sections 2105 and 2107 of the Family Code, relating to dissolution of marriage.


LEGISLATIVE COUNSEL'S DIGEST


AB 2373, as amended, Acosta. Dissolution of marriage and legal separation: disclosure of assets and liabilities.
(1) Existing law requires each party to a proceeding for a dissolution of marriage or legal separation to serve on the other party a preliminary declaration of disclosure of assets, as specified, and a final declaration of disclosure, as specified. A party who has complied with these disclosure requirements may waive his or her right to receive these disclosures from a party who has not complied, upon court approval, as specified.
This bill would remove the need for court approval and instead authorize the complying party to waive the right to receive these disclosures by filing and serving a declaration, executed under penalty of perjury, waiving receipt of the noncomplying party’s disclosures. The bill would require the declaration to include specific representations, including, among others, that the complying party is advised and informed that he or she is entitled to full financial disclosure from the other party and waives that right knowingly, intelligently, and voluntarily. By requiring the declaration to be executed under penalty of perjury, the bill would expand the crime of perjury, and thus impose a state-mandated local program.
(2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 2105 of the Family Code is amended to read:

2105.
 (a) Except by court order for good cause or unless waived as provided in Section 2107, before or at the time the parties enter into an agreement for the resolution of property or support issues other than pendente lite support, or, if the case goes to trial, no later than 45 days before the first assigned trial date, each party, or the attorney for the party in this matter, shall serve on the other party a final declaration of disclosure and a current income and expense declaration, executed under penalty of perjury on a form prescribed by the Judicial Council, unless the parties mutually waive the final declaration of disclosure. The commission of perjury on the final declaration of disclosure by a party may be grounds for setting aside the judgment, or any part or parts thereof, pursuant to Chapter 10 (commencing with Section 2120), in addition to any and all other remedies, civil or criminal, that otherwise are available under law for the commission of perjury.
(b) The final declaration of disclosure shall include all of the following information:
(1) All material facts and information regarding the characterization of all assets and liabilities.
(2) All material facts and information regarding the valuation of all assets that are contended to be community property or in which it is contended the community has an interest.
(3) All material facts and information regarding the amounts of all obligations that are contended to be community obligations or for which it is contended the community has liability.
(4) All material facts and information regarding the earnings, accumulations, and expenses of each party that have been set forth in the income and expense declaration.
(c) In making an order setting aside a judgment for failure to comply with this section, the court may limit the set aside to those portions of the judgment materially affected by the nondisclosure.
(d) The parties may stipulate to a mutual waiver of the requirements of subdivision (a) concerning the final declaration of disclosure, by execution of a waiver under penalty of perjury entered into in open court or by separate stipulation. The waiver shall include all of the following representations:
(1) Both parties have complied with Section 2104 and the preliminary declarations of disclosure have been completed and exchanged.
(2) Both parties have completed and exchanged a current income and expense declaration, that includes all material facts and information regarding that party’s earnings, accumulations, and expenses.
(3) Both parties have fully complied with Section 2102 and have fully augmented the preliminary declarations of disclosure, including disclosure of all material facts and information regarding the characterization of all assets and liabilities, the valuation of all assets that are contended to be community property or in which it is contended the community has an interest, and the amounts of all obligations that are contended to be community obligations or for which it is contended the community has liability.
(4) The waiver is knowingly, intelligently, and voluntarily entered into by each of the parties.
(5) Each party understands that this waiver does not limit the legal disclosure obligations of the parties, but rather is a statement under penalty of perjury that those obligations have been fulfilled. Each party further understands that noncompliance with those obligations will result in the court setting aside the judgment.

SEC. 2.

 Section 2107 of the Family Code is amended to read:

2107.
 (a) If one party fails to serve on the other party a preliminary declaration of disclosure under Section 2104, unless that party is not required to serve a preliminary declaration of disclosure pursuant to Section 2110, or a final declaration of disclosure under Section 2105, or fails to provide the information required in the respective declarations with sufficient particularity, and if the other party has served the respective declaration of disclosure on the noncomplying party, the complying party may, within a reasonable time, request preparation of the appropriate declaration of disclosure or further particularity.
(b) If the noncomplying party fails to comply with a request under subdivision (a), the complying party may do one or more of the following:
(1) File a motion to compel a further response.
(2) File a motion for an order preventing the noncomplying party from presenting evidence on issues that should have been covered in the declaration of disclosure.
(3) File and serve by mail a declaration, executed under penalty of perjury, unilaterally waiving receipt of the noncomplying party’s preliminary declaration of disclosure pursuant to Section 2104 or final declaration of disclosure pursuant to Section 2105, no later than 45 days prior to entry of final judgment on support and property issues. The declaration does not affect the rights enumerated in subdivision (d). The declaration shall include all of the following representations by the complying party:
(A) Complying party has complied with Sections 2104 and 2105 by serving his or her preliminary and final declarations of disclosure on the noncomplying party.
(B) Complying party has made at least three attempts to have the noncomplying party produce financial disclosures as required by Sections 2104 and 2105, listing the dates, mode of communication, and results of each attempt.
(C) As of the date of execution of the declaration, the noncomplying party has not responded to demands nor has he or she complied with Sections 2104 and 2105.
(D) Complying party is advised and informed that he or she is entitled to full financial disclosure from the other party pursuant to this chapter and waives that right knowingly, intelligently, and voluntarily.
(c) If a party fails to comply with any provision of this chapter, the court shall, in addition to any other remedy provided by law, impose money sanctions against the noncomplying party. Sanctions shall be in an amount sufficient to deter repetition of the conduct or comparable conduct, and shall include reasonable attorney’s fees, costs incurred, or both, unless the court finds that the noncomplying party acted with substantial justification or that other circumstances make the imposition of the sanction unjust.
(d) Except as otherwise provided in this subdivision, if a court enters a judgment when the parties have failed to comply with all disclosure requirements of this chapter, the court shall set aside the judgment. The failure to comply with the disclosure requirements does not constitute harmless error. If the court granted the complying party’s voluntary waiver of receipt of the noncomplying party’s preliminary or final declaration of disclosure pursuant to paragraph (3) of subdivision (b), the court shall set aside the judgment only at the request of the complying party, unless the motion to set aside the judgment is based on one of the following:
(1) Actual fraud if the defrauded party was kept in ignorance or in some other manner was fraudulently prevented from fully participating in the proceeding.
(2) Perjury, as defined in Section 118 of the Penal Code, in the preliminary or final declaration of disclosure, in the waiver of the final declaration of disclosure, or in the current income and expense statement.
(e) Upon the motion to set aside judgment, the court may order the parties to provide the preliminary and final declarations of disclosure that were exchanged between them. Absent a court order to the contrary, the disclosure declarations shall not be filed with the court and shall be returned to the parties.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.