Marriage of Stanzler

(Decided February 2011, Third Dist. #C060476, unpublished.) In this case, the husband and wife entered into a oral settlement agreement before trial on their dissolution. Later, the husband moved to set aside the agreement on the basis that she had failed to properly disclose, under statutory marital property disclosure requirements, the fact that she had paid him a community property advance with a loan against their community property, thereby allegedly shortchanging him when they balanced out the community property division. The trial court denied the motion, finding the disclosure statute did not apply because there was a settlement. On appeal, with Mr. Sargeant representing the wife, the court agreed with husband that the wife's cryptic listing of the loan on her financial disclosure form did not comply with the "rigorous disclosure requirements" under Family Code sections 2100 et seq. Further, section 2107 provides that, "the failure to comply with the disclosure requirements does not constitute harmless error.” Unfortunately for the husband, that provision "has been found unconstitutional in light of the state Constitution’s requirement that no judgment may be set aside unless there has been a miscarriage of justice." And in this case, there was evidence that husband's counsel was well aware of the existence of the loan, having received three letters from wife's counsel mentioning the amount and nature of the loan. Moreover, wife's counsel's declaration established that the challenged amount of the loan ($90,000) had been properly accounted for in the negotiations and calculations leading to the oral settlement. On this basis, the Court of Appeal affirmed the order denying set-aside of agreement, resulting in a major victory for Mr. Sargeant's client.