Buyer’s remorse in family law occurs when one party, after agreeing with the court’s findings, decides he or she was unhappy with the ruling. In this case, Susan, the respondent, moved for an order to set aside judgment based on her opinion that Kevin, the other party, provided false information in the Declaration of Disclosure.*
Susan suspected that her husband was dishonest and believed the court should have awarded her more money. The judgment did reveal there were two mistakes in the Declaration of Disclosure. Despite her argument, however, the errors had no impact on the decision by the court. Regardless, the case went to trial.
As a result, the action to attempt to modify the judgment caused both parties to hire forensic accountants to perform tracings. My tracing revealed that nothing was material enough to cause her any economic harm. Her forensic accountant agreed with my findings.
It was clear that the other forensic accountant was not given the opportunity by Susan to trace all the financial accounts before deciding to go to trial. Had he done so, pursuing a trial likely never would have happened.
It is usually essential for forensic accountants to meet and confer prior to the decision to go to trial. I almost always recommend this. In this case, it would have saved the parties unnecessary expense, time and emotional energy.
The issue presented before a Superior Court in San Bernardino County was whether the judgment of dissolution that was entered in September 2019 should be disregarded. Susan Peters, respondent, moved for an Order to Set Aside Judgment based on the assertion that Kevin Peters, the party I represented, failed to disclose material assets, breached his fiduciary duty, and committed fraud.
After 30 years of marriage, the parties separated on March 4, 2019 and Kevin filed a petition for dissolution of their marriage. Susan was involved in the dissolution process and filed a Preliminary Declaration of Disclosure and Income and Expense Declaration on September 7, 2019. The parties filed a Stipulation and Waiver of Final Declaration of Disclosure on the same day.
Susan filed a Request for Order on October 2, 2020 seeking to set aside the dissolution judgment. Her grounds were that; 1) Kevin committed fraud by misrepresenting the character of accounts; 2) Kevin mismanaged community and separate property funds; 3) Kevin failed to disclose material assets; 4) Kevin breached his fiduciary duty; and 5) Susan claimed to have separate property inheritances that were omitted.
Specifics of the Case
Family Code, Section 2107(a) provides that if one party fails to provide the required information in a preliminary Declaration of Disclosure, the other party who has served its Declaration may request preparation of the appropriate disclosure or further particularity. Neither party made such a request.
Susan did later discover that there were errors in the Declaration of Disclosure. However, the mistakes did not impact the financial outcome of the case. Specifically, the Preliminary Declaration that Kevin completed showed his Fidelity account number 0921 having a balance of $624,206 and account number 6463 with a balance of $130,140. In actuality, the amounts in these accounts were transposed, but the overall value was accounted for in the Declaration. Therefore, there was no prejudice to Susan. Both parties were aware of all relevant information and had executed several written agreements concerning the disposition of the property and assets.
It is worth noting that account number 0921 was known as the “Hari account.” This was of importance because Susan argued that the Declaration of Disclosure omitted this account. Through my testimony that related to considerable tracings of all of the parties’ accounts, I revealed that the Hari account was included. It is also noteworthy that the Hari account was awarded to Susan in the dissolution, which was considerably larger than the other account.
Failure to Disclose: Susan argued that Kevin failed to disclose a box filled with gold coins and kruerrand. Kevin testified that some of the proceeds were used to purchase a property. Susan first testified that she was not aware of the box of gold. However, on cross-examination, Susan admitted that she recalled the box prior to their separation. As such, the court did not find that Kevin failed to disclose the gold coins and that Susan knew of their existence.
Breach of Fiduciary Duty: The parties used an advisor from Fidelity to manage their accounts. During Susan’s medical treatments, she gave Kevin limited power of attorney. However, I found there was no indication that there was any mismanagement of the accounts of either party. I testified that the parties did pay advisory fees on the accounts at Fidelity, and that those were indicative of the assets being under the management of a financial advisor. Susan’s forensic accountant agreed.
Susan also asserted that Kevin breached his fiduciary duty by withdrawing funds in violation of automatic temporary restraining orders (ATROS) instituted at the time of service of the summons. Through the tracing I conducted, I demonstrated that nothing appeared to violate ATROS, as the actions taken by Kevin were consistent with his conduct during the marriage. Susan’s forensic accountant fully agreed.
Omitted Assets: In 2012, the parties purchased a property in Arizona that Susan stated at the trial was paid for by community property funds. Later she claimed that $124,000 of that amount was from inheritances. She stated that during the marriage, she received $1,054,000 in inheritances from her relatives’ estates. However, Susan’s forensic accountant testified that he could not uncover any records related to her alleged inheritances. Thus, it was clear that it would be impossible to trace spending as there was no evidence of omitted assets.
Susan testified on numerous occasions during the trial that she made a mistake in entering into the agreement. Remorse is not a basis to set aside a stipulated judgment.
Susan wanted the court to believe she had no say in determining the distribution of assets in this dissolution, but the evidence clearly proved otherwise. Susan has a bachelor’s degree in economics and a master’s in sociology. Thus, she had the ability to actively participate in settlement discussions. In fact, the parties engaged in a lengthy mediation with an attorney prior to reaching an agreement.
Both parties signed numerous documents concerning separating their assets. The parties divided in excess of $5 million pursuant to their stipulated judgment in agreement with the terms.
Susan failed to meet her burden of proof. As a result, the court ordered the parties to comply with the existing judgment as previously filed.