However, Court Of Appeal Suggests That Family Code Section 2107(d) Is Unconstitutional.
Marriage of Zellet, Case No. B268640 (2d Dist., Div. 6 Aug. 18, 2016) (unpublished) is a very interesting unpublished decision. It considered whether an award of attorney’s fees to wife based on a husband’s breach of fiduciary obligations under Family Code section 2107 (failure to fully report income, assets, and liabilities) was sustainable where wife did not file an updated income/expense declaration. The appellate court said the award was proper.
The issue centered upon Family Code section 2107(d), which states that only a party in compliance with their own financial disclosures may request that the court impose sanctions (including attorney’s fees) under section 2107(c), a mandatory fee-shifting statute where fiduciary reporting obligations are breached with limited exceptions. Husband argued the fee award was infirm because wife was noncompliant under subdivision (d) by not providing current financial information. Section 2107(d) interestingly states that the failure to comply with disclosure statements does not constitute harmless error. The 2/6 DCA decision found that statutory provisions, like subdivision (d), cannot preempt constitutional requirements such as the one indicating that prejudice must be shown in all cases (in this matter, prejudice from a nondisclosure). Wife’s failure update financial information was not causally connected, much less prejudicial in impact, to husband’s violation of his fiduciary obligations. Although not saying subdivision (d) was unconstitutional, the decision pretty much concluded this was the case if its reasoning is followed to its logical end.