In re Marriage of Badial and Gill (B316281) (2023)

California Court of Appeal

Second Appellate District, Division One

Bruce represented the respondent on appeal in a post-judgment family law matter involving enforcement of a stipulated dissolution judgment. The trial court imposed sanctions against the appellant under Family Code § 271, based on his obstruction of a court-ordered property sale. On appeal, Bruce successfully argued that the sanction amount was proper. However, the Court of Appeal held the specific amount due was improperly calculated. The Court of Appeal affirmed the imposition of sanctions but reversed the specific amount and remanded to the trial court for recalculation.

In re Marriage of White and Eichenlaub (B251847) (2015)

California Court of Appeal

Second Appellate District, Division One

Bruce represented the appellant in an appeal of a postjudgment order involving child and spousal support. On appeal, Bruce successfully challenged the trial court’s exclusion of certain income from forgiven loans from arrearage calculation and the trial court's use of an incorrect estimated time-share percentage in computing prospective child support when the actual time-share percentage was known. The Court of Appeal reversed in part and remanded for recalculation of arrears and child support using the correct income and custody data.

In re Marriage of Shachar and Morris (D042346, D043648) (2005)

California Court of Appeal

Fourth Appellate District, Division One

Bruce represented a husband in two consolidated appeals challenging two postjudgment child support orders. In the first, the family court had used an incorrect 50/50 timeshare assumption to calculate guideline support, despite a custody schedule showing the husband had the children 62% of the time. Bruce successfully argued that the court failed to follow statutory requirements to calculate actual parenting time under Family Code § 4055. The Court of Appeal reversed and ordered recalculation using the correct timeshare. In the second appeal, Bruce challenged a downward modification of support based on the wife’s claimed income reduction. The court reversed again, holding that the wife failed to provide the financial documentation required by a local rule to verify her self-employment income, and thus did not meet her burden to justify a reduction.

In re Marriage of Emsallem (B174099) (2004)

California Court of Appeal

Second Appellate District

Bruce represented the husband in opposing the wife’s petition for a writ of supersedeas, which sought to block enforcement of a trial court order directing payment of nearly $700,000 in community debts from the proceeds of a home sale. Bruce argued writ relief would be improper on several grounds. The Court of Appeal agreed and summarily denied the writ petition.

In re Marriage of Duffy, 91 Cal.App.4th 923 (B136160) (2001)

California Court of Appeal

Second Appellate District, Division One

Bruce represented the husband in a marital dissolution appeal challenging a $400,684 damages award for breach of fiduciary duty. The husband had managed the family's finances, and had invested in a few publicly traded high-tech companies. The investments initially did well, but then went down substantially during the dot-com bust. Spouses owe each other fiduciary duties. In the trial court, the wife argued that these fiduciary duties included the duty to act as a reasonably prudent investor, that the husband had failed to do so, and that he had refused to provide information to the wife upon request. The trial court agreed. On appeal, Bruce argued that a spouse's fiduciary duty included only the duty of loyalty, not the duty of care. That is, spouses can invest without diversifying their portfolio in a way that a trustee would be obligated to do. Moreover, the evidence did not show the husband had refused to provide information to the wife. The Court of Appeal agreed with Bruce and reversed the order. It noted that the evidence did not support the trial court's finding that the husband had failed to disclose investment information. The court emphasized that fiduciary duties under Family Code § 721 require disclosure upon request, and here, the wife had not asked for information about the investments in question. And spouses are not under a general duty to act as reasonably prudent investors.

Case Note

When arguing for a change or clarification of the law on appeal, it is important to provide a limiting principle. That is, if the change is adopted, how would the change cover cases that one would think it ought to cover but not cover cases that it ought not to cover. Here, as a policy matter, it is clear that if a spouse hides assets or conceals information from the other, there could (and should) be liability. On the other hand, there should not be liability if a spouse simply makes a bad investment. When the case was decided, Family Code, § 721 stated "[Except as provided in various statutes] a husband and wife are subject to the general rules governing fiduciary relationships .... This confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other. This confidential relationship is a fiduciary relationship subject to the same rights and duties of nonmarital business partners..." Bruce's detailed knowledge of both fiduciary duties and appellate advocacy helped the Court of Appeal clarify the scope of spousal fiduciary duties. Specifically, Bruce successfully argued that in interpreting this statute, the dividing line should be between the fiduciary duty of loyalty and the duty of care.

There is an interesting legal aftermath to this case. After this case was published, the California Legislature amended Family Code, section 721 specifically to modify the rule in this case. "[T]he intent of the Legislature in enacting this act to clarify that Section 721 of the Family Code provides that the fiduciary relationship between spouses includes all of the same rights and duties in the management of community property as the rights and duties of unmarried business partners managing partnership property . . . and to abrogate the ruling in In re Marriage of Duffy (2001) 91 Cal.App.4th 923 . . . to the extent [the Duffy ruling] conflict[s] with this clarification.” (Stats.2002, ch. 310 (Sen. Bill No.1936, § 2.) The law clarified that spouses did owe each other the duty of care in general, but specifically exempted the “prudent investor” standard of care contained in Probate Code § 16047 from these duties. That is, spouses are not obligated to invest prudently the way a trustee would be obligated to invest, but are obligated not to act in a grossly negligent or reckless manner in their investments. The Legislature agreed with Bruce that a limiting principle is required, but included the general duty of care and excluded the duty to invest prudently. Simply put, a spouse would presumably not be liable to the other spouse for investing in a legitimate publicly traded company, but presumably would be liable for investing in a crazy friend's hairbrained scheme.

And an aftermath regarding the parties. The ex-wife had received an equalization payment under the now reversed judgment, and she was obligated to repay these to Bruce's client. Instead, she filed for bankruptcy, claiming the money was gone, and generating another two appeals. Details here. (Bruce's client eventually obtained the money owed.)

In re Marriage of Ostroy (B151452) (2002)

California Court of Appeal

Second Appellate District, Division Four

Bruce represented the mother in a custody modification proceeding. The father appealed the trial court’s order reducing his custodial time and awarding attorney fees. The Court of Appeal affirmed, rejecting constitutional challenges to Family Code § 3040 and finding substantial evidence supported the custody modification. The court also upheld the fee award, noting that self-representation by the father did not preclude a fee award to the represented parent.

Alejandre v. Puerto (B135164) (2000)

California Court of Appeal

Second Appellate District, Division One

Bruce represented the mother in a contested custody dispute involving two young children. The father sought sole legal custody, citing concerns about the mother’s parenting. The trial court disagreed, and the father appealed. The Court of Appeal affirmed, finding no error and noting that both parents had unresolved issues but neither had presented sufficient evidence to justify excluding the other from custody.

In re Marriage of Kaufman and Supple (B109039) (1998)

California Court of Appeal

Second Appellate District, Division Three

Bruce represented the appellant, a former husband, in a dispute over the valuation of his interest in the husband’s separate property family residence following dissolution. The parties had executed a written agreement granting the wife a 40% interest in the property in exchange for her assumption of the mortgage. Both were approximately equal in value. The trial court interpreted the agreement to divide only the equity in the property on a 60/40 basis, awarding the husband far less than the agreement provided and the wife far more. Bruce successfully argued on appeal that the agreement entitled his client to 60% of the property’s total fair market value, not just the equity. The Court of Appeal modified the judgment to award the husband the full amount owed.

Case Note

There were some additional developments in this case. The wife’s attorney took some of the proceeds from the sale of the husband's house, knowing that they had been ordered to be turned over to the husband. He refused to pay them to Bruce's client. Bruce (in one of his rare appearances in the trial court) sought an order requiring the lawyer to turn over these proceeds. The trial court denied this motion. Bruce then obtained a reversal on appeal and obtained these proceeds (and sanctions) from the lawyer. Details here