Presented by Ron J. Anfuso, CPA, ABV, CFF, CDFA, FABFA
Yes, California is a no-fault state. However, no fault relates only to grounds for the termination of a marriage. Financial fault, on the other hand, has no limits. It can lie in the past, present or future. In fact, it seems that as time passes and cases grow, in law, the theories for asserting financial fault have increased. You might say that financial fault is trending.
In this issue, I focus on the Superior Court of Los Angeles County appeals case of Diosdado v. Diosdado.
Diosdado v. Diosdado Background
Donna and Manuel Diosdado were married in November 1988. About four years later, Manuel had an affair. When Donna discovered this, the parties separated. Rather than divorce, they entered into a written Marriage Settlement Agreement, which was intended to preserve, protect and assure the longevity and integrity of an amicable and beneficial marital relationship between them.
There were three sections to their post-marital agreement. The first stated that if either party expressed a concern that the goals of the marriage were not being met, they would agree to seek counseling and make an effort the resolve their problems to preserve their marriage.
Section two further acknowledged that their marriage was intended as an exclusive relationship between Husband and Wife, and was based on the values of emotional and sexual fidelity and trust. The parties acknowledged their mutual understanding that any such breach by one party could cause serious emotional, physical and financial injury to the other.
Section three stated that if either party engaged in a breach of their obligation, either party could initiate an action to divorce and that the party committing the breach would be obligated to vacate the family home and would be responsible for all attorney fees and court costs incurred as the result of any litigation surrounding or related to said breach. In addition, the offending party would have to pay the other spouse $50,000 in damages over and above property settlement imposed by law as a result of the court proceeding. Manuel’s attorney drafted the agreement and both parties signed it.
In 1998, Manuel again had an affair. After Donna was able to verify the breach, the parties again separated and then divorced.
Donna brought action for breach of contract in February 2002 to enforce the damages caused by the divorce. On the initial day of trial, the court granted a judgment on the proceedings in favor of Manuel. Donna appealed the judgment.
The Superior Court’s Considerations and Its Disposition
The question before the court was whether the agreement was enforceable.
Fault is not a relevant consideration in the legal process by which a marriage is dissolved. Recovery in no-fault dissolution proceedings is basically limited to half the community property and appropriate support of attorney fee orders—no hefty premiums for emotional angst. (Askew v. Askew (1994) 22 Cal. App. 4th 942, 960.)
The agreement between the parties attempted to impose a premium for the emotional angst caused by Manuel’s breach of his promise of sexual fidelity. However, the family court may not look to fault in dissolving a marriage, dividing property or ordering support. The agreement attempted to penalize the party who was at fault for breaching the obligation of sexual fidelity. This breach provided the basis for terminating the marriage. The penalty, however, was in direct violation of the public policy underlying no-fault divorce.
A contract must have a lawful object to be enforcible. If a contract conflicts with a provision of the law, policy of the law or good morals, it is unlawful. In the case of Diosdado v. Diosdado, the agreement attempted to impose a penalty on one of the parties as a result of that party’s immoral behavior during the marriage. Since this was in direct opposition to the underlying policy of no-fault provisions for dissolution of a marriage, the agreement could not be enforced.
Why Did I Choose to Study this Case?
The explanation is simple. By having a thorough comprehension of no-fault divorce law and its financial implications, I am able to provide more thorough and effective litigation support to referring attorneys and their clients.