Existing law requires each party to a proceeding for 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. Existing law requires each party to serve a preliminary declaration of disclosure either concurrently with the petition for dissolution, or within 60 days of filing the petition for dissolution of marriage. Existing law specifies, in the case of a default judgment, that a petitioner shall not be required to serve or receive a final declaration of disclosure, but a preliminary declaration of disclosure by the petitioner is still required.

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 court order and the respondent has defaulted. The bill would require, when a petitioner has served the summons and petition by publication or posting pursuant to court order and the respondent files a response prior to default judgment being entered, the petitioner to serve the respondent with a preliminary declaration of disclosure within 30 days of the response being filed. The bill would make other related, conforming changes.

Existing law requires each party to a proceeding for 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. Existing law requires each party to serve a preliminary declaration of disclosure either concurrently with the petition for dissolution, or within 60 days of filing the petition for dissolution of marriage. Existing law specifies, in the case of a default judgment, that a petitioner shall not be required to serve or receive a final declaration of disclosure, but a preliminary declaration of disclosure by the petitioner is still required.

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 court order and the respondent has defaulted. The bill would require, when a petitioner has served the summons and petition by publication or posting pursuant to court order and the respondent files a response prior to default judgment being entered, the petitioner to serve the respondent with a preliminary declaration of disclosure within 30 days of the response being filed. The bill would make other related, conforming changes.

Existing law requires each party to a proceeding for 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. Existing law requires each party to serve a preliminary declaration of disclosure either concurrently with the petition for dissolution, or within 60 days of filing the petition for dissolution of marriage. Existing law specifies, in the case of a default judgment, that a petitioner shall not be required to serve or receive a final declaration of disclosure, but a preliminary declaration of disclosure by the petitioner is still required.

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 court order and the respondent has defaulted. The bill would require, when a petitioner has served the summons and petition by publication or posting pursuant to court order and the respondent files a response prior to default judgment being entered, the petitioner to serve the respondent with a preliminary declaration of disclosure within 30 days of the response being filed. The bill would make other related, conforming changes.

Date of Hearing: June 16, 2015

ASSEMBLY COMMITTEE ON JUDICIARY

Mark Stone, Chair

SBPCA Bill Id:SB 340

Author:(Anderson) – As Introduced Ver:February 23, 2015

Proposed Consent

SENATE VOTE: 34-0

SUBJECT: Dissolution: disclosure

KEY ISSUE: TO BETTER PROTECT CONFIDENTIAL FINANCIAL INFORMATION, SHOULD A PETITIONER IN A DISSOLUTION PROCEEDING NO LONGER BE REQUIRED TO SERVE HIS OR HER ASSET DISCLOSURE DECLARATION ON A BAD ADDRESS FOR A RESPONDENT WHO HAS BEEN SERVED BY PUBLICATION OR POSTING BUT DEFAULTED IN THE ACTION?

SYNOPSIS

As part of a dissolution or legal separation, spouses must disclosure to each other detailed information about any of their assets in which the community may have an interest and all debts for which the community may be liable. To accomplish this, the parties are required to serve each other with preliminary and final disclosure declarations listing the parties' assets and liabilities. The final declarations can be waived in certain situations and if the respondent defaults, his or her disclosure declarations can be waived, but the petitioner's preliminary disclosure declaration is currently required in all cases. This non-controversial bill, sponsored by the Family Law Section of the State Bar, seeks to protect the parties' privacy by creating a very narrow exception to the mandatory financial disclosure rules in cases where the petitioner is unable to personally serve the respondent and the court permits service by publication (in a newspaper), or posting (in a location reasonably thought to notify the respondent), and the respondent defaults in the action. In this limited instance, this bill would allow the petitioner to not prepare and serve a preliminary disclosure declaration on a respondent who cannot be located. If the respondent appears in the action, however, the petitioner would be required to serve the disclosure declaration within 30 days. There is no reported opposition to this measure.

SUMMARY: Relieves a petitioner in a dissolution or legal separation proceeding of the requirement to serve a preliminary disclosure declaration on a respondent who was served by publication or by posting and who has defaulted in the action. Specifically, this bill:

1. Provides that a preliminary declaration of disclosure is not required by a petitioner in a dissolution or legal separation proceeding if: a) the petitioner served the summons and petition by publication or posting pursuant to a court order, and b) the respondent has defaulted.

2. Provides 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.

EXISTING LAW:

1. In order to provide full and accurate disclosure of all assets and liabilities in which one or both parties may have an interest, requires each party to a dissolution or legal separation proceeding to serve the other party with a preliminary declaration of disclosure and a final declaration of disclosure, as provided. (Family Code Section 2103. Unless stated otherwise, all further statutory references are to that code.)

2. In a dissolution proceeding, requires the petitioner to serve the other party with the preliminary declaration of disclosure either concurrently with the petition for dissolution, or within 60 days of filing the petition. Requires the respondent to serve the other party with the preliminary declaration of disclosure either concurrently with the response to the petition, or within 60 days of filing the response. Allows the time periods to be extended by written agreement of the parties or by court order. Also requires that the parties provide each other with a completed income and expense declaration. (Section 2104.)

3. 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. (Section 2106.)

4. Allows the petitioner, in the case of a default judgment, to waive the final declaration of disclosure requirements. (Section 2110.)

5. Allows the court to permit service by publication if the court determines that the party cannot, with reasonable diligence, otherwise be served. (Code of Civil Procedure Section 415.50.)

6. Where service cannot otherwise be accomplished, allows the court to permit service in a manner which is reasonably calculated to give actual notice to the party being served. Provides that the service by posting is only permitted if the petitioner is eligible for a waiver of court fees. (Code of Civil Procedure Section 413.30; California Rules of Court, Rule 5.72.)

FISCAL EFFECT: As currently in print this bill is keyed non-fiscal.

COMMENTS: Divorcing spouses are required to serve each other with preliminary and final disclosure declarations listing their assets and liabilities. This non-controversial bill, sponsored by the Family Law Section of the State Bar, seeks to protect the parties' privacy by creating a very narrow exception to the mandatory financial disclosure rules in cases where the petitioner has served the petition by publication or posting and the respondent has defaulted in the action. In these limited instances, the petitioner would not be required to serve a preliminary disclosure declaration. Writes the author:

The court can approve service by publication or posting in cases where 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, it can reasonably be assumed that 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. Additionally, the mandatory disclosures have to be served to respondent’s last known address, which means that petitioner’s sensitive and private financial information will most likely fall into the hands of unknown persons who may abuse it. This proposal would change the law to allow a very narrow exception to the financial disclosure rules in cases where service of Summons and Petition was by publication or posting and the respondent defaults. If respondent answers prior to entry of default, this bill would require petitioner to serve the mandatory disclosures within 30 days of when response was filed.

Disclosure Declarations Designed to Provide Both Spouses With Knowledge of Their Community's Assets and Liabilities. As part of a dissolution or legal separation, spouses must, until assets and liabilities have been divided, make full disclosure to each other of all information about all assets in which the community may have an interest and all debts for which the community may be liable, and to provide access to all information, records, and books that pertain to the value and character of those assets and debts. To accomplish this, the parties are required to serve each other with preliminary disclosure declarations, listing the parties' assets and liabilities and stating the percentage of ownership in each item not solely owned by one or the other party. The disclosure declarations are designed to ensure that both parties understand their assets and their debts when determining how to divide the community estate. Additionally, unless the judgment is by default, no final judgment as to property rights may be entered unless the parties have served the required declarations, or have stipulated to a mutual waiver of a final disclosure declaration, having previously exchanged preliminary disclosure declarations. In case of a default judgment, only the petitioner's declaration of service of the preliminary disclosure is required.

Serving the Summons and Petition and Disclosure Declarations are Difficult When One Party Cannot be Located or Otherwise Provided with Notice and Required Legal Documents. 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. Each party is also, as discussed above, required to provide preliminary financial disclosures to the other party. In cases where the whereabouts of both spouses are known, service of both the summons and petition and the disclosure declaration is relatively straightforward and can be accomplished in a number of ways, including by in person service, or service by mail. (See Code Civil Procedure Sections 415.10 et seq.)

However, if the location of the responding spouse is unknown, notice and service become more problematic. In these cases, the court may, if it determines that the respondent cannot, with reasonable diligence, be served, allow the petitioning spouse to provide notice through alternative means, including notice by publication. Notice by publication requires the petitioner to publish, for a specified period of time, the summons in a newspaper “most likely to give notice to the party served.” (Code Civil Procedure Section 415.50.) Where no statutory prescribed method will work to provide notice, the court may allow a party to serve in another method, as directed by the court, "which is reasonably calculated to give actual notice to the party to be served." (Code of Civil Procedure Section 413.30.) One of the options under this service alternative of last resort is service by posting. Service by posting is accomplished by posting the documents in a location where the respondent is most likely to receive actual notice of the pending litigation. By court rule, service by posting is only permitted when the petitioner is eligible for a waiver of court fees, likely because the cost of service by publication can be prohibitive to parties receiving fee waivers. (Rule of Court 5.72.)

The requirement of financial disclosure, however, is not so easily solved when the other spouse cannot be located and served. Because the Family Code does not specify how financial disclosures must be completed, there are inconsistencies in practice. For example, Santa Clara County has a local rule which allows a petitioner, in the case of publication, to send his or her preliminary financial disclosures to the respondent in care of the court clerk. (Superior Court Santa Clara County, Local Family Rules, Rule 1(J)(3).) Alternatively, 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, which could mean that the disclosure declaration must also be posted and mailed. (Judicial Council Form FL-982.) However, none of these solutions is particularly satisfactory because the disclosures contain personal financial information (e.g., tax returns, as well as bank and credit card account numbers and balances) and mailing to a respondent’s last known address makes it possible that a third party could obtain the petitioner’s sensitive information.

The Family Law Section of the State Bar explains that in "the vast majority of cases where service was accomplished by publication or posting, [r]espondents default in the case, meaning they never appear or participate in the case. Preparing the financial disclosures is quite time consuming, and they often contain personal financial information, like bank account and credit card account numbers and balances. Requiring a spouse to complete these forms when the other side will never see them is an unnecessary expenditure of time and resources." Moreover, since the court does not receive or independently evaluate the disclosure declaration to determine the disposition of the case, their preparation and service may be of no value to anyone, and could potentially cause harm if the confidential financial information falls into the wrong hands.

This Bill Creates a Limited Exception to Disclosure When the Respondent Cannot be Located and Fails to Participate in the Proceeding. This bill exempts a person seeking a divorce, who cannot locate his or her spouse for purpose of service of process, from the obligation of serving preliminary financial disclosures on the missing spouse if the court has approved notice by publication or posting. However, this bill does not provide a blanket exemption to providing disclosure declarations if service by publication or posting is used. If the respondent does, in fact, respond to the notice by publication or posting, 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 he or she gave notice by publication or posting, to send financial information to an address where the respondent no longer lives. And, as a result, this bill will save 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.

Pending Related Legislation: AB 1519 (Judiciary), among other things, requires that the timeframe for exchange of the preliminary disclosure declaration in dissolution cases also applies to legal separation cases – within 60 days of the filing of the petition or the response. AB 1519 passed the Assembly and is concurrently awaiting hearing in the Senate Judiciary Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

Family Law Section of the State Bar (sponsor)

Opposition

None on file

Analysis Prepared by: Leora Gershenzon / JUD. / (916) 319-2334

 THIRD READING  

Bill No: SB 340

Author: Anderson (R)

Introduced: 2/23/15

Vote: 21

SENATE JUDICIARY COMMITTEE: 7-0, 5/5/15

AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski

SUBJECT: Dissolution: disclosure

SOURCE: Executive Committee of the Family Law Section of the State Bar

DIGEST: This bill provides 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 court order and the respondent has defaulted. This bill requires, when a petitioner has served the summons and petition by publication or posting pursuant to court order and the respondent files a response prior to default judgment being entered, the petitioner to serve the respondent with a preliminary declaration of disclosure within 30 days of the response being filed. This bill makes other related, conforming changes.

ANALYSIS:

Existing law:

1. 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.)

2. 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.)

3. 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.)

4. Allows the petitioner, in the case of a default judgment, to waive the final declaration of disclosure requirements. (Fam. Code Sec. 2110.)

This bill:

1. Provides 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.

2. Provides 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.

Background

The Elkins Family Law Task Force (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, Chapter 352, Statutes of 2010) was enacted to implement most of the Task Force’s key legislative recommendations. Again in 2012, AB 1406 (Committee on Judiciary, Chapter 107, Statutes of 2012) 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. 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.

Comments

The author writes:

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.

Prior Legislation

AB 1406 (Author: 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 Task Force.

FISCAL EFFECT: Appropriation: No Fiscal Com.: No Local: No

SUPPORT: (Verified 5/8/15)

Executive Committee of the Family Law Section of the State Bar (source)

OPPOSITION: (Verified 5/8/15)

None received

ARGUMENTS IN SUPPORT: The Executive Committee of the Family Law Section of the State Bar, 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.”

Prepared by: Nichole Rapier / JUD. / (916) 651-4113

5/8/15 15:09:19

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2015 - 2016 Regular Session

Bill No: SB 340 (Author:Anderson)

Amended: Version: February 23, 2015

Hearing Date: May 5, 2015

Fiscal: No

Urgency: No

Consultant: 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. 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.)

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.

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 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 (Author: 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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