Source: https://law.justia.com/cases/california/court-of-appeal/4th/93/1334.html
Timestamp: 2019-04-23 08:49:21+00:00

Document:
IN RE THE MARRIAGE OF JENNESS BREWER AND OVIDIO FEDERICI.
JENNESS BREWER, Appellant, v. OVIDIO FEDERICI, Respondent.
Brewer and Federici were married in 1980. Brewer was a vice president at the National Broadcasting Company (NBC). fn. 1 In 1997, Brewer earned approximately $175,000. Federici was an artist. He was not actively involved in his career. The family lived primarily on Brewer's salary. Federici managed the family household, including the family finances, the community checking account, and the bills. He had access to the parties' tax information. The parties had one daughter, born in 1981.
Brewer and Federici separated in 1997 after 17 years of marriage.
2. The dissolution and settlement.
On January 2, 1998, Brewer served Federici with a petition for dissolution of marriage and related documents.
The parties negotiated a marital settlement agreement. They agreed to a division of property as follows: Federici would receive his car, his personal property, specified furnishings, his investment accounts, his art collection, $5,000 in lieu of stock options, 20 shares of GE stock, and an equalizing payment of $149,000. He also was to receive $6,000 for relocation expenses. Brewer agreed to pay Federici $35,000 per year, for five years in tax-free, non-modifiable spousal support, and to pay Federici's health and auto insurance for that period of time. Brewer was to receive a family trust and a medical malpractice claim. Additionally, she was to receive the family home, her car, her personal property, furnishings not otherwise designated, her investment accounts, her IRA, and GE stock options. She was also to receive "[a]ny and all right, title and interest in [her] retirement and pension plan, [her] Savings and Security program with an approximately total balance of $168,561.00, though her employer, NBC[.]" (Italics added.) Brewer assumed all marital debts. There was to be joint legal custody of the child, and Brewer was to be the custodial parent. Brewer agreed to be solely responsible for the child's support.
There is no evidence that either spouse refused to provide documentation requested by the other spouse.
On February 27, 1998, the parties met in Brewer's attorney's office. They signed the marital settlement agreement. At the time, the parties exchanged final declarations of disclosure, both dated January 17, 1998. All documents had been prepared by Brewer's attorney.
The two final declarations of disclosure were identical in content. They each included a schedule of assets and debts. The schedules had five columns, two of which were labeled "assets -- description" and "current gross fair market value." fn. 2 They provided a current gross value for the family residence at $475,000 and showed that $305,000 was owed. The following items were valued as "unknown": (1) miscellaneous household furniture, furnishings, and appliances; (2) miscellaneous jewelry, antiques, art, coin, collections; (3) a Brewer family trust; and (4) a medical malpractice action.
A number of Federici's paintings were valued in another document at approximately $50,000.
Also on February 27, 1998, the parties signed a stipulated judgment. It contained a division of property, duplicating verbatim that which had been detailed in the marital settlement agreement. The stipulated judgment also had been prepared by Brewer's attorney.
On April 23, 1998, the stipulated judgment was entered.
3. The motions to set aside.
In December 1998, Federici moved to set aside the property division and spousal support portions of the judgment. In part, Federici contended the motion should be granted because substantial community assets were not valued, including Brewer's "NBC pension, [and] GE stock options." Federici declared he had been under a mistaken belief regarding the amount he could earn during the next few years while he was in school. He found that while in school he could only earn $6.00 per hour working part-time. He further declared that he would not have agreed to the spousal support provisions in the judgment or waived his community interest in Brewer's retirement benefits had he understood his limited earning potential. Federici also contended that Brewer's final declaration of disclosure was inadequate because the schedule of assets and debts had not valued substantial community assets, including Brewer's NBC pension.
An expert declaration was submitted on behalf of Federici. The expert declared that Brewer's interest in the NBC Pension was worth $278,784, assuming a date of separation of August 1, 1997, and was worth $286,144, assuming a December 17, 1997, date of separation.
On February 18, 1999, Federici filed supplemental points and authorities. He pointed out that the judgment awarded Brewer her "retirement and pension plan, and [her] Savings and Security program with an approximate [93 Cal. App. 4th 1340] total balance of $168,561.00 . . . ." (Italics added.) Federici noted it had been learned through discovery that the value of the Savings and Security Program was not $168,561.00. That sum that had been ascertained from Brewer's December 1996 annual statement, which was more than a year before the January 1998 disclosure statements. Federici also noted that the 1996 annual statement had 13 pages, but Brewer had attached only two pages to her final declaration of disclosure. The omitted pages would have revealed other relevant information about the program, such as the amount Brewer was to receive upon retirement. Federici produced evidence revealing that Brewer's Savings and Security Plan was worth $232,441 as of December 31, 1997, and $313,235 as of December 31, 1998. Additionally, Federici showed that the NBC Pension was worth at least $286,144. Federici stated that when he agreed to the property settlement, he had not understood that Brewer had two retirement plans through her employer. This mistake explained why he had accepted the global settlement, including the $149,000 equalization payment, and why the marriage settlement agreement and the stipulated judgment referred to a "total balance of $168,561" for the retirement plans.
On February 26, 1999, Federici filed a second motion. It was to set aside the marital settlement agreement. Federici contended, among other arguments, that there had been a mistake. Federici argued that "the parties were mistaken as to the value and possibly as to the number of [Brewer's] pension plans and that [Brewer] had failed to comply with the disclosure requirements as set forth in Family Code § 2105 and elucidated in Marriage of Varner (1997) 55 Cal. App. 4th 128 . . . by listing 'unknown' for the value of her [NBC] pension and GE stock options and by listing an outdated value for her . . . Savings and Security [Program]."
In opposing the motions, Brewer stated she did not understand how her retirement benefits worked and she had valued the NBC Pension as "unknown" because she had not known its value. Brewer also stated that she had not attempted to hide anything, as she acknowledged she had two retirement plans through her employer. Brewer admitted she had not tried to ascertain the value of the NBC Pension.
4. The order setting aside the judgment and the marital settlement agreement.
The trial court set aside the judgment and the marital settlement agreement, except as to marital status.
In its statement of decision, the trial court found the following: (1) Brewer contended the date of separation was August 1, 1997. Federici claimed the [93 Cal. App. 4th 1341] date of separation was December 7, 1997; (2) The community interest in Brewer's NBC Pension, a defined pension plan, was worth between $286,144 and $278,784, depending upon the date of separation; and, (3) Brewer's Savings and Security Program was a defined contribution plan. As of December 31, 1996, it was worth $168,561, and was entirely community property. As of December 31, 1997, the Savings and Security Program was valued at $232,441, and as of December 31, 1998, it was valued at $313,235. The community interest in this asset after December 31, 1996, would depend upon how much was contributed by Brewer from her post-separation earnings.
" The Final Declarations of Disclosure of both parties, which were signed on January 17, 1998, listed the value of [Brewer's NBC] Pension Plan as 'unknown' and listed the value of [Brewer's] Savings and Security Program as $168,561.00. [Brewer] attached to her Final Declaration of Disclosure only those two pages of her 1996 annual benefits statement [showing] the value of her . . . Savings and Security Program as of December 31, 1996. [Brewer] did not attach the remaining pages of the benefits statement which provided an estimate of the monthly income [Brewer] would receive from her [NBC] Pension Plan upon retirement at a certain age, but did not include an actuarial value.
" The equalization payment awarded to [Federici] in the judgment was based upon [a] valuation of $168,561.00 [for the Savings and Security Program].
" On the basis of the foregoing findings alone and without consideration of [Federici's] claims regarding the division of other community assets or the terms of the spousal support award, [Federici] has met the requirement of Family Code § 2121(b).
" The failure of [Brewer's] Final Declaration of Disclosure to state the value of the [NBC] Pension . . . or the current value of the . . . Savings & Security Program constituted a material omission. While the statement that the value of the asset was 'unknown' did not constitute perjury, the [93 Cal. App. 4th 1342] omission of any value for the [NBC] Pension Plan constituted a breach of fiduciary duty imposed upon spouses by Family Code [§]§ 721 and 1101(e). The omission led to a mistake of fact regarding the value of what appear[s] to be the largest and second largest community assets. The parties entered into the marital settlement agreement and the judgment without full knowledge of the facts and as a result their decision and any waivers made as part of that decision cannot be said to be 'knowing.' Family Code § 2102 requires an accurate and complete disclosure of assets and liabilities. The parties' Final Declarations of Disclosure were neither accurate nor complete.
" . . . The court . . . finds that pursuant to Family Code § 2122(e) and Marriage of Varner (1997) 55 Cal.App.4th 128, the judgment must be set aside in its entirety (except for the termination of marital status.) It would be both illogical and unlawful to hold either of the parties to an agreement where there was not full and complete disclosure or to allow either party to choose which portions of an agreement to set aside."
On July 7, 1999, the trial court ordered that the judgment and the marital settlement agreement, except as to status, be set aside. Brewer appealed.
The trial court did not abuse its discretion in setting aside the judgment and the marital settlement agreement based on mistake.
Brewer contends the trial court abused its discretion in setting aside the judgment and the marital settlement agreement. This contention is unpersuasive.
1. The lack of full and accurate disclosure may be grounds for a motion to set aside based upon mistake.
2. Here there was a unilateral mistake by Federici warranting relief.
 Contrary to Brewer's contention, the trial court did not abuse its discretion in setting aside the judgment and the marital settlement agreement based upon mistake of fact. The evidence supports the trial court's determination that there was a unilateral mistake by Federici. fn. 11 Federici did not have accurate and complete valuations of Brewer's pension plans. Such information was essential to his agreement to resolve all financial issues, including spousal support and the division of community property.
According to Federici, he agreed to the equalization payment based upon his belief that there was one pension plan with a total value of $168,561. Federici's understanding of the facts was reflected in the judgment and the marital settlement agreement. Both documents recited that Brewer was to receive "[a]ny and all right, title and interest in [her] retirement and pension plan, [her] Savings and Security program with an approximate total balance of $168,561.00, through her employer, NBC[.]" (Italics added.) In fact, however, there were two pension plans, with a total value of more than $500,000, almost all of which was community property.
Brewer further contends she met her disclosure obligations when she valued the NBC pension as "unknown." She asserts it is unreasonable to expect spouses to value all assets, as to do so requires them to expend considerable funds on experts. Brewer additionally contends that to impose a stringent valuation requirement will discourage the amicable distribution of assets.
By these arguments, Brewer fails to address the court's ability to grant relief based upon mistake, regardless of a finding of wrongdoing. (Fam. Code, § 2122, subd. (e).) Further, the Family Code presumes spouses will have sufficient, accurate information from which informed decisions can be made. It requires disclosure of "[a]ll material facts and information regarding the valuation of all assets that are contended to be community property . . . ." (Fam. Code, § 2105, subd. (a)(2), italics added.) Here, the parties are not dealing with items that have intangible or sentimental value. They are not dealing with items that spouses frequently divide without regard to value, such as household furniture. They are not dealing with items the valuation of which are immaterial to a distribution agreement. They are not dealing with items where the expense of valuation is unwarranted or valuation will discourage the amicable distribution of assets. Rather, the NBC Pension is one of the largest community assets, an asset which is financial in nature and whose monetary value is easily ascertainable. Thus, when Brewer stated the value of the NBC Pension was "unknown," she did not make sufficient disclosure.
 By our discussion we do not mean to suggest that Federici and Brewer lacked the ability to decide upon an unequal distribution of assets. (Fam. Code, § 2550; Cal. Rules of Court, rule 1242; In re Marriage of Cream (1993) 13 Cal. App. 4th 81, 87, 91.) As long as such agreement is based upon a complete and accurate understanding of the existence and value of community and separate assets that are material to the agreement, the parties are free to decide on an unequal distribution.
The trial court did not err in setting aside the judgment and the marital settlement agreement based upon mistake.
The order is affirmed. Costs on appeal are awarded to Federici.
CROSKEY, ACTING P. J., and KITCHING, J., concurred.
FN 1. NBC is owned by General Electric (GE).
FN 2. The other three columns were labeled "sep. prop.," "date acquired," and "amount of money owed or encumbrance."
FN 3. As stated in footnote number one, NBC is owned by GE. Regardless of the labels used by the parties and the trial court in the proceedings below, it is clear that there were two pension plans: (1) the GE Pension plan, also referred to as the NBC Pension Plan; and (2) the Savings and Security Program, also referred to as the NBC Savings and Security Program, the GE Savings and Security Program, and the Savings and Security Plan. For ease of reference, hereinafter, we refer to these two pension plans as the "NBC Pension" and the "Savings and Security Program."
FN 4. $232,441 + $278,784 = $511,225.
$232,441 + $286,144 = $518,225.
". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
"(b) Sound public policy further favors the reduction of the adversarial nature of marital dissolution and the attendant costs by fostering full disclosure and cooperative discovery.
"(c) In order to promote this public policy, a full and accurate disclosure of all assets and liabilities in which one or both parties have or may have an interest must be made in the early stages of a proceeding for dissolution of marriage or legal separation of the parties, regardless of the characterization as community or separate, together with a disclosure of all income and expenses of the parties. Moreover, each party has a continuing duty to update and augment that disclosure to the extent there have been any material changes so that at the time the parties enter into an agreement for the resolution of any of these issues, or at the time of trial on these issues, each party will have as full and complete knowledge of the relevant underlying facts as is reasonably possible under the circumstances of the case."
"(a) The accurate and complete disclosure of all assets and liabilities in which the party has or may have an interest or obligation and all current earnings, accumulations, and expenses.
"(b) The accurate and complete written disclosure of any investment opportunity that presents itself after the date of separation . . . .
"(c) The operation or management of a business or an interest in a business in which the community may have an interest."
FN 11. Brewer states she did not mislead and she revealed all information known to her. In light of our conclusion, we need not discuss whether or not these facts could have led the trial court to conclude that there had been a mutual mistake.
FN 12. As noted, Brewer supplied only two of the 13 pages of the 1996 employer annual statement. Federici argues this omission was purposeful and constitutes a misrepresentation. The trial court did not base its decision upon misrepresentation and we need not address the issue.

References: v. 
 § 2105
 § 2121
 § 2102
 § 2122
 § 2122
 § 2105
 § 2550