Case of the Month Archive

The defense of laches is available in actions to enforce all family court judgments except support judgments that do not involve the state. . .

In reversal, the Fourth District held that, per Fam C §291(d), the defense of laches is available in actions to enforce all family court judgments except support judgments that do not involve the state; although husband's laches defense was available in wife's action to enforce tax return and property division provisions of marital settlement agreement, the trial court's findings that husband was prejudiced by wife's delay in bringing action is not supported by substantial evidence.

Dianne York Goldman and Mitchel Paul Goldman divorced in 2009. Their dissolution judgment incorporated a marital settlement agreement (MSA) executed by the parties. In May 2010, Dianne's attorney sent Mitchel's attorney a letter complaining that the parties did not file joint tax returns for 2007 and 2008, as they were required to do under the MSA. Instead, Mitchel filed separate returns for those years in question. In a response letter, Mitchel's attorney raised their own complaints but suggested the parties attempt to settle their disputes. Dianne's attorney never responded.

A lengthy passage of time. . .
Approximately 18 years later, in 2018, Dianne filed a request for order seeking to enforce the tax return provision of the MSA. She requested that the trial court order Mitchel to provide his individual tax returns for 2007 and 2008 and pay her the amounts of refund that he received with interest.

In 2020, Dianne filed a request for order requesting the trial court enforce the MSA's provisions regarding division of stocks, patents, royalties, and artwork, claiming that these assets had not been divided. Dianne also sought need-based attorney's fees and costs pursuant to Fam C §2030.

In response to Dianne's requests for order, Mitchel asserted the defense of laches and requested that the trial court bifurcate the proceedings so that the defense of laches was addressed first, which the trial court agreed to do.

In December 2022, after a two-day hearing, the trial court (San Diego County's Kalemkiarian) ruled the defense of laches was potentially available to Mitchel against all of Dianne's claims. In February 2023, the trial court filed a statement of decision denying all of Dianne's claims based on laches. In reaching its conclusion, the trial court found Dianne's delay in filing her 2018 request for order was unreasonable because she knew by May 2010 that the parties had not signed joint tax returns for either 2007 or 2008. The trial court further found this delay prejudiced Mitchel because the time to amend his returns had passed. The trial court also found Dianne's delay in filing her 2020 request for order was unreasonable and prejudicial to Mitchel, since Dianne had notice of all these claims as early as 2009, when Mitchel submitted his pre-dissolution disclosure. More specifically, the trial court found this delay prejudiced Mitchel "'because, as a result of the passage of time, the evidence needed to rebut [Dianne's] claims is no longer available.'" Finally, the trial court denied Dianne's requests for attorney's fees after finding she had the ability to fund her post-judgment litigation and that it was unreasonable for her to pursue her claims considering the trial court's ruling on Mitchel's laches defense. Dianne appealed, but, in a partially published opinion, the Fourth District reversed.

In the published part of its opinion, the Fourth District first described the applicable law. In relevant part, Fam C §291(a) provides "'A money judgment or judgment for possession or sale of property that is made or entered under this code, including a judgment for child, family, or spousal support, is enforceable until paid in full or otherwise satisfied.'" Furthermore, Fam C §291(d) provides that "'In an action to enforce a judgment for child, family, or spousal support, the defendant may raise, and the court may consider, the defense of laches only with respect to any portion of the judgment that is owed to the state.'"

A matter of first impression. . .
The panel observed that this appeal presented an issue of first impression concerning whether the affirmative defense of laches can be asserted against a former spouse's RFO to enforce nonsupport family court judgments. To resolve this issue, the justices addressed the parties' competing interpretations of Fam C §291(d). For her part, Dianne argued that the defense of laches applies only against the state in an action to enforce a support judgment. Mitchel, on the other hand, argued the defense of laches is available in all actions to enforce family court judgments and orders except actions to enforce support payments not involving the state. After noting that, from the words of the statute alone, it is not possible to determine whose interpretation is correct, the justices turned to relevant legislative history.

Legislative history supports husband's interpretation. . .
Based on several pieces of legislative history, the justices concluded that the defense of laches is available in actions to enforce all family court judgments except support judgments that do not involve the state. First, former Family Code sections provided that nonsupport money judgments were enforceable until paid in full and were not required to be renewed. More specifically, the justices observed AB 2126, which replaced the prior version of Fam C §291 with its present form, incorporated these former Family Code sections. Second, the California Family Law Revision Commission's report specifically noted that AB 2126 "'would preserve the existing exemption of a support judgment from laches, but would not extend that exemption to other types of Family Code judgments.'" And third, a Senate Judiciary Committee bill analysis stated "'laches would not be available during enforcement of support judgments. Other judgments and orders under the Family Code would be subject to the defense of laches.'" For these reasons, the justices concluded that the defense of laches is available in actions to enforce all family court judgments except support judgments that do not involve the state. The justices further concluded that since Dianne did not seek to enforce a support judgment, the laches defense was available to Mitchel.

Too early to show prejudice. . .
In the unpublished part of its opinion, the panel concluded the trial court erred by finding Mitchel was prejudiced by Dianne's delay. In so concluding, the justices noted that Mitchel had the burden to prove prejudice, which required him "to show that documents he believes he needs are unavailable due to the delay." In these circumstances, this burden was made more difficult by Mitchel's trial strategy of bifurcating the laches issue and trying it first. More specifically, this decision required Mitchel to prove prejudice before he knew the full extent of Dianne's claims.

Turning first to Dianne's tax return claim, the panel concluded the trial court erred by finding that Dianne's delay in bringing this claim prejudiced Mitchel. According to the justices, "there is no evidence that the amount that Mitchel owes Dianne is different today than when he filed those returns." The justices also noted that Dianne's tax return claims could be resolved by an accounting of the parties' tax liabilities for 2007 and 2008 and determining the difference, if any, that Mitchel would owe Dianne if they had filed joint returns for those years.

In the case of Dianne's stock claim, the justices concluded that Mitchel's assertion that the documents he needs are unavailable due to Dianne's delay is "an unproven assumption." In 2017 and 2018, Dianne wrote letters to two dozen companies that she thought had relevant information about shares of stock the couple owned. Although she did not receive any helpful information, none of the fourteen companies that responded to Dianne's letters indicated that documents were not available. The justices also reiterated that Mitchel carried the burden to affirmatively establish prejudice and that the record contained no evidence that Mitchel himself attempted to find any documents he stated would be needed for trial on this claim.

The justices also concluded the record does not support the trial court's finding of prejudice as to Dianne's patent claim. During trial, Mitchel testified that he had assigned all his patent rights for nominal amounts to assignees. According to the justices, documents supporting those assignments are all he needs.

As for Dianne's claim for royalties, the record contains royalty statements from 2012 to 2020. Notably, royalty statements for the years 2009 to 2012 were missing. The justices concluded the trial court erred by finding prejudice based on missing records for the years in question. First, there was no evidence that the royalties for 2009 to 2012 could not be estimated from the records that are available. And second, even if Mitchel could show that the records for these three years are in fact unavailable and cannot be estimated, the justices indicated the trial court should apply laches only to deny Dianne's claim for the three years in question, not for the years in which records are available.

As for Dianne's artwork claim, the justices observed that the trial court took no testimony on this claim. As such, there was no evidence to support Mitchel's claim that he was prejudiced by Dianne's delay.

At the conclusion of this portion of the analysis, the panel noted that Mitchel may still be able to show prejudice once Dianne details her claims on remand. As such, the justices added that "the reversal is without prejudice to [Mitchel] reasserting a laches defense once [Dianne] has specifically identified the specific asset or claimed amount she seeks to recover."

Finally, the justices held the trial court erred by denying Dianne's request for attorney's fees since its ruling was based substantially on the erroneous conclusion that laches barred her claims.

Accordingly, the Fourth District reversed the trial court's order denying Dianne's request to enforce the judgment on grounds that laches bar all of her claims and reversed the trial court's subsequent order denying Dianne's requests for attorney's fees and costs and remanded to the trial court with directions to conduct further proceedings on the merits of Dianne's claims and to reconsider her requests for fees and costs.