Service of Preliminary Disclosure is Not Required if Agreement Predates the Filing of Petition for Divorce

The Parties were married in July 1985. They separated in March 2007.  The only significant asset was a house. Parties agreed that husband would buy Wife’s interest. Wife typed up a “Pre-Divorce Agreement.” Both signed the document in May 2007. At the time, the parties assumed that the equity was $600,000 and the agreement required husband to pay $300,000 to wife.  No disclosures were exchanged prior to the agreement being signed. After signing the agreement, husband paid wife $197K leaving $103K owing. At the time of the divorce, the house had a net equity of only $70K. Husband moved to set aside the divorce agreement. The divorce court found the agreement to be enforceable. Husband’s divorce lawyer appealed.

Is a property settlement agreement valid and enforceable when executed by the spouses (1) after DOS but before the Petition filed and (2) without an exchange of disclosures? The divorce court must then determine “plain meaning” of statues. If ambiguous, the divorce court will look to legislative intent of the statute. Per Family Code § 2104, preliminary disclosures required “after or concurrently with service of petition.” The language is unambiguous. The service of a preliminary disclosure is not required before the petition is filed and served. Family Code § 2105 (final disclosures) says, “before or at the time the parties enter into an agreement for the resolution of property or support… or, if the case goes to trial…”

The language is arguably ambiguous. However, in looking at the over-all scheme, it is clear that the final is intended to follow the preliminary and therefore both are contemplated as post-divorce petitioned disclosures. Additionally, Family Code § 2105 falls within Division 6 of the Family Code which division applies to a proceeding which contemplates rules following the filing and service of a petition.

The Court read Burkle II (In re Marriage of Burkle (Burkle II) (2006) 139 Cal. App. 4th, 712) to mean that the requirements of Family Code § 2104 and Family Code § 2105 (service of preliminary and final disclosures) to apply when two conditions are met: (1) the spouses who execute settlement agreement are parties to a divorce proceeding; and (2) parties negotiated and executed the settlement agreement in contemplation of a divorce judgment.

In re Marriage of Evans (2014) 229 Cal. App. 4th 374