No.
D024756
COURT
OF APPEAL OF CALIFORNIA
Fourth
Appellate District, Division One
66
Cal. App. 4th #1172; 78 Cal. Rptr.
2d ##513
September
25, 1998, Decided
SUBSEQUENT
HISTORY: Rehearing Denied
October 20, 1998. Review Denied January
13, 1999, Reported at: 1999 Cal. LEXIS
162.
PRIOR HISTORY: APPEAL
from an order of the Superior Court of San
Diego County. Super. Ct. No. EC008411.
Harrison R. Hollywood and James R.
Milliken, Judges.
DISPOSITION: The order
of dismissal is reversed. Appellant to
recover costs on appeal.
COUNSEL:
Mazur & Mazur and Janice R. Mazur for
Plaintiff and Appellant.
Stephen Temko, Kim Cheatum, Sharron
Voorhees, Alan L. Nobler, Gollub and
Golsan, Lorraine C. Gollub, Susan Berke
Fogel and Pamela
A. Kelley
as Amici Curiae on behalf of Plaintiff and
Appellant.
Meisenheimer and Herron, Matthew V.
Herron, Robert M. Steele and Robert S.
Gerstein for Defendants and Respondents.
JUDGES: Opinion by Nares,
J., with Benke, Acting P. J., and Haller,
J., concurring.
OPINION: NARES, J.
In this action, Joanne Sandra Dale
(Joanne) alleged that during the course of
a marital dissolution proceeding her
former husband, defendant Thomas Redding
Dale (Thomas), and the bookkeeper for his
medical practice, defendant Chun Wei Dale
(Chun Wei), concealed from Joanne certain
community assets related to the practice.
Joanne claimed that as a result of the
concealment, she was induced to forego
spousal support and to stipulate that
Thomas be awarded the practice without
full knowledge of the assets contained
therein. Joanne sought compensatory and
punitive damages under a variety of tort
theories. The trial court dismissed the
action for lack of jurisdiction,
concluding Joanne's exclusive remedy lay
in seeking to set aside the judgment of
dissolution in the family court. We hold
that in the absence of a pending
dissolution proceeding, a plaintiff who
contends she suffered injury because her
former spouse tortiously concealed
community assets from her, thereby
preventing her from fully presenting her
case in the dissolution proceeding, is
entitled to bring a subsequent tort action
based on the alleged concealment.
Accordingly, we reverse the order of
dismissal.
FACTUAL
AND PROCEDURAL BACKGROUND
Because
the trial court dismissed the action based
on the pleadings, for purposes of review
we accept as true all material facts
alleged in the third amended complaint,
which was the operative version of the
complaint at the time of dismissal. (See Macias
v. State of California (1995) 10 Cal.
4th 844, 847, fn. 1 [42 Cal. Rptr. 2d 592,
897 P.2d 530].)
Joanne and Thomas were married in 1970. In
1984 Joanne initiated a marital
dissolution proceeding. A judgment of
dissolution was entered in 1985; however,
the court reserved jurisdiction over the
disposal of certain community assets. In
1988, pursuant to stipulation, a
supplemental judgment was entered [##515]
disposing of those assets, including
Thomas's medical practice, which was
awarded to Thomas. [#1176]
Five years later, in August 1993, while
seeking to increase child support for her
two children, Joanne obtained from a
certified public accountant certain
financial documents related to the medical
practice. Upon review of those documents,
Joanne discovered that financial documents
Thomas produced to her in the course of
the dissolution proceeding had been
altered. According to Joanne, beginning in
1984, when Thomas was served with notice
of the dissolution proceeding, Thomas and
Chun Wei withheld from billing patients,
withheld moneys received as payments to
the accounts receivable of the medical
practice, and otherwise acted so as to
artificially reduce the value of the
practice. Chun Wei prepared false ledgers,
financial statements, income tax returns
and other business records to conceal the
withheld billings and payments. Thomas
actively concealed the existence of the
withheld billings and payments and
affirmatively misrepresented to Joanne
that his practice was experiencing
financial difficulties and was near
insolvency. As a result of the concealment
of the withheld billings and payments by
Thomas and Chun Wei, Joanne was induced to
forego spousal support and to stipulate
that Thomas be awarded the practice as his
separate property.
In December 1993 Joanne commenced this
action against Thomas and Chun Wei based
on their alleged concealment of Thomas's
true income and financial condition.
Following several demurrers, Joanne filed
a third amended complaint which stated
claims against Thomas and Chun Wei on a
variety of legal theories, including
breach of fiduciary duty, fraud,
constructive fraud, intentional and
negligent misrepresentation, conversion,
conspiracy, fraudulent conveyance,
constructive trust, and declaratory
relief. Joanne sought both compensatory
and punitive damages.
The trial court apparently overruled a
demurrer to the third amended complaint
based on the "litigation
privilege" (Civ. Code, § 47, subd.
(b)). n1 Defendants later filed a motion
for summary judgment on the same ground,
asserting that Joanne's claims were barred
by the privilege because the claims were
based on statements and communications by
parties to a judicial proceeding. The
trial court denied the summary judgment
motion without prejudice due to a
deficiency in defendants' evidence, and
defendants later refiled the motion. The
court issued a tentative ruling denying
the motion and then took the matter under
submission following oral argument.
------------------------------------------
n1 The record on appeal does not contain
any of the moving or opposing papers
related to the demurrer to the third
amended complaint.
------------------------------------------
While the motion for summary judgment was
still under submission, the case was
called for trial. At the outset, the trial
court indicated that it would allow the
jury to decide the issue of fraud, but it
would not allow the jury to [#1177]
fix damages. The court indicated that if
the jury found fraud, the court would send
the case to the family court n2 for
"further adjudication." After an
extended discussion with counsel during
which defense counsel argued the family
court had "exclusive
jurisdiction" over the matter, the
court agreed to allow the parties to brief
the issue of the court's jurisdiction.
Defendants argued that because the family
court had continuing jurisdiction to
determine spousal support and to award
community assets not previously
adjudicated, Joanne's sole remedy lay in
that court. Joanne argued that she was
entitled to elect between pursuing a
remedy in the family court and pursuing an
independent civil action for damages and
equitable relief.
------------------------------------------
n2 As the California Supreme Court
explained in In re Chantal S.
(1996) 13 Cal. 4th 196, 201 [51 Cal. Rptr.
2d 866, 913 P.2d 1075]: ". . .
'family court' refers to the activities of
one or more superior court judicial
officers who handle litigation arising
under the Family Code. It is not a
separate court with special jurisdiction,
but is instead the superior court
performing one of its general
duties."
------------------------------------------
Following the completion of briefing, the
trial court issued an order tentatively
dismissing the case on the grounds that
the court did not have jurisdiction
"to hear matters previously
determined and adjudicated [##516]
by the Family Court" or "to hear
damages testimony relating to community
property assets including, but not limited
to, spousal support and valuation of the
medical practice . . . ." The court
transferred the case to the presiding
judge for a determination of whether the
case should be dismissed or transferred to
the family court. The presiding judge
issued a minute order dismissing the case
and later denied a motion for
reconsideration. Joanne appeals the
dismissal.
DISCUSSION
I.
Subject
Matter Jurisdiction
The
parties suggest the issue presented here
is whether the trial court had subject
matter jurisdiction over this action.
We disagree. In this case, Joanne seeks an
award of compensatory and punitive damages
for pecuniary injury she allegedly
sustained as a result of defendants'
tortious conduct. n3 The superior court
has subject matter jurisdiction over a
tort action where the [#1178]
amount in controversy exceeds $25,000. n4
(See Ash v. Hertz Corp (1997) 53
Cal. App. 4th 1107, 1109-1110 [62 Cal.
Rptr. 2d 192]; Code Civ. Proc., § 86.)
Likewise, to the extent Joanne seeks
declaratory relief as to her interest in
the community assets defendants allegedly
concealed from her, the superior court has
subject matter jurisdiction. (See Code Civ.
Proc., § 1060.)
------------------------------------------
n3 According to Joanne, she was injured by
defendants' conduct because she "was
induced to forego spousal support, was
deprived of her rightful community
interest in [Thomas's medical practice],
and was further precluded from fully and
fairly litigating the division of [the]
concealed assets in the previous
dissolution action . . . ."
n4 Here, Joanne alleged the amount of her
claim was "unknown at this time, but
believed to be in an amount of at least
$1,000,000.00."
------------------------------------------
We believe that in dismissing this case
for lack of "jurisdiction," the
trial court used that term in its broader
sense, as articulated by the California
Supreme Court in Abelleira v. District
Court of Appeal (1941) 17 Cal. 2d 280
[109 P.2d 942, 132 A.L.R. 715]. In Abelleira,
the court explained: "Lack of
jurisdiction in its most fundamental or
strict sense means an entire absence of
power to hear or determine the case, an
absence of authority over the subject
matter or the parties. . . . [P] But in
its ordinary usage the phrase 'lack of
jurisdiction' is not limited to these
fundamental situations. For the purpose of
determining the right to . . . dismissal
of an action, a much broader meaning is
recognized. Here it may be applied to a
case where, though the court has
jurisdiction over the subject matter and
the parties in the fundamental sense, it
has no 'jurisdiction' (or power) to act
except in a particular manner, or to give
certain kinds of relief . . . ." ( Id.
at p. 288.)
In ruling that it lacked jurisdiction in
this case, the trial court cited several
provisions of the Family Code which
provide that the court in a dissolution
proceeding has continuing jurisdiction to
order the payment of spousal support and
to award community assets which have not
been previously adjudicated. (See Fam.
Code, § 2552, 2556, 4330, 4336.) Because
the damages sought here relate to spousal
support and community assets Joanne claims
she forfeited as a result of defendants'
tortious conduct, the trial court
apparently concluded that it had no
"jurisdiction" to grant Joanne
the relief she sought and that her only
recourse was to seek to reopen the
dissolution proceeding so she could pursue
directly in that proceeding an award of
spousal support and a division of the
concealed assets. Accordingly, the
question presented here is not one of the
court's subject matter jurisdiction, but
of the court's "jurisdiction"
(or power) to grant relief in an action
for damages stemming from the tortious
concealment of community assets in a
dissolution proceeding. For the reasons
that follow, we conclude that the court
does have the power to grant relief in
such an action.
II.
Viability
of Tort Action for Concealment of
Community Assets
In
defense of the trial court's ruling,
defendants argue that "the Family
Court is the only court that can decide
issues of community property [#1179]
and spousal support." [##517]
According to defendants, Joanne is not
entitled to maintain a tort action against
them based on their allegedly tortious
concealment of community assets. They
contend Joanne's sole remedy is to move to
set aside the supplemental judgment in the
dissolution proceeding on grounds of
extrinsic fraud. n5
------------------------------------------
n5 Under case law, after the expiration of
the six-month period for seeking relief
pursuant to Code of Civil Procedure
section 473 on grounds of mistake,
inadvertance, surprise or excusable
neglect, an otherwise valid and final
judgment adjudicating support or division
of community property could be set aside
only if it was obtained through extrinsic
fraud. (See In re Marriage of Stevenot
(1984) 154 Cal. App. 3d 1051, 1068 [202
Cal. Rptr. 116].) For judgments entered on
or after January 1, 1993, Family Code
section 2120 et seq. provides a
comprehensive statutory scheme for setting
aside such judgments on grounds of actual
fraud, perjury, duress, mental incapacity,
or mistake. (See In re Marriage of
Varner (1997) 55 Cal. App. 4th 128,
136-137 [63 Cal. Rptr. 2d 894].) Because
the judgment at issue here was entered in
1988, we have no occasion to address the
effect of Family Code section 2120 et seq.
on the viability of a tort action for
concealment of community assets.
------------------------------------------
Joanne acknowledges the continuing
jurisdiction of the family court in the
dissolution proceeding to award spousal
support and divide omitted community
assets. She argues, however, that "continuing
jurisdiction does not equate to exclusive
jurisdiction" and that she has the
right to elect her remedy and proceed with
an action for damages. (Original italics.)
In support of her argument, Joanne relies
primarily on Worton v. Worton
(1991) 234 Cal. App. 3d 1638 [286 Cal.
Rptr. 410].
In Worton, a wife sued her former
husband for damages for fraud and
conversion, alleging that during the
course of their marital dissolution
proceeding he concealed the existence of
certain excess assets in a pension plan.
n6 (Worton v. Worton, supra,
234 Cal. App. 3d at pp. 1643-1644.) The
husband obtained summary judgment on the
ground that the action against him was
barred by the doctrine of res judicata. (Id.
at pp. 1644-1646.) The Court of Appeal
reversed, holding that res judicata did
not apply because the husband's
"failure to reveal the existence of
the excess assets to plaintiff . . .
deprived her of an opportunity fully to
present her case in the dissolution
proceeding." (Id. at p.
1649.)
------------------------------------------
n6 The wife also sued her former attorney
for legal malpractice for negligently
failing to discover the existence of the
excess assets. The Court of Appeal
affirmed a summary judgment in favor of
the attorney on the ground that wife's
claim was barred by the statute of
limitations.
------------------------------------------
Joanne contends that Worton
"is on all fours with the instant
case in all pertinent respects." We
disagree. It is true the court in Worton
allowed the plaintiff to proceed with her
action for damages against her former
husband based on his fraudulent
concealment of community assets during the
dissolution proceeding. However, the court
in Worton apparently was not
presented with, and therefore did not
address, the argument defendants make
[#1180]
here: namely, that a plaintiff in such a
case is not entitled to pursue an action
for damages but is instead limited to
seeking relief from the family court by
moving to set aside the judgment of
dissolution. (See d'Elia v. d' Elia
(1997) 58 Cal. App. 4th 415, 431 [68 Cal.
Rptr. 2d 324] ["The Worton
court never considered the legal propriety
of a tort claim based on the concealment
of a community asset, as distinct from a
traditional set aside action based on
extrinsic fraud."].) "[C]ases
are not authority for propositions not
considered." (McDowell &
Craig v. City of Santa Fe Springs
(1960) 54 Cal. 2d 33, 38 [4 Cal. Rptr.
176, 351 P.2d 344].) Accordingly, the
decision in Worton is of little
assistance in deciding the primary issue
before us.
Joanne also relies on In re Marriage
of McNeill (1984) 160 Cal. App. 3d
548 [206 Cal. Rptr. 641], disapproved on
other grounds in In re Marriage of
Fabian (1986) 41 Cal. 3d 440 [224
Cal. Rptr. 333, 715 P.2d 253]. In McNeill,
the trial court consolidated a husband's
action against his wife for damages based
on fraud with the couple's dissolution
proceeding. In that case, however, the
wife did not argue that her husband could
not pursue his action for damages. Rather,
she simply argued that the court erred in
consolidating the two proceedings. (Id.
at pp. 556-558.) Consequently, like Worton,
McNeill provides little direct
assistance [##518]
in deciding whether Joanne may maintain an
action for damages for concealment of
community assets. n7
------------------------------------------
n7 For similar reasons, the decision in McDaniel
v. McDaniel (1969) 275 Cal. App. 2d
927 [80 Cal. Rptr. 837], cited by amicus
curiae San Diego County Certified Family
Law Specialists, is of little assistance
in our inquiry. In McDaniel, the
husband appealed from a judgment in favor
of the wife in an action for
misrepresentations the husband made to the
wife in connection with a property
settlement agreement in an action for
divorce. (Id. at p. 929.) The
husband contended that the evidence did
not support the trial court's findings and
that the damages were excessive. (Ibid.)
He apparently did not contend that the
wife could not maintain a tort action
against him.
------------------------------------------
Although McNeill is of little
direct assistance, it does illustrate the
general rule that one spouse may sue the
other for intentional or negligent torts.
n8 (See Nagy v. Nagy (1989) 210
Cal. App. 3d 1262, 1268 [258 Cal. Rptr.
787].) The question posed by this case is
whether that general rule does not or
should not apply when the tortious
conduct, which provides the basis for the
action, consists of the concealment of
community assets in a dissolution
proceeding, and the damages the injured
spouse claims relate to spousal support
and community assets allegedly forfeited
as a result of that conduct. We are aware
of no authority imposing any such
limitation and find no basis for doing so
ourselves.
------------------------------------------
n8 Even before the California Supreme
Court abrogated interspousal immunity for
personal torts in 1962 (see Self v.
Self (1962) 58 Cal. 2d 683 [26 Cal.
Rptr. 97, 376 P.2d 65]; Klein v. Klein
(1962) 58 Cal. 2d 692 [26 Cal. Rptr. 102,
376 P.2d 70]), it was established that
interspousal immunity did not apply to
property torts such as fraud. (See Langley
v. Schumacker (1956) 46 Cal. 2d 601,
603-604 [297 P.2d 977].)
------------------------------------------ [#1181]
Defendants contend the decision in d'Elia
v. d'Elia, supra, 58 Cal.
App. 4th 415 "disposes of [Joanne's]
claim to an independent tort action for
damages resulting from the allegedly
fraudulent inducement of her property
settlement with her former husband . . .
." Defendants are mistaken. In d'Elia,
the wife claimed that in the course of a
dissolution proceeding her former husband
made misrepresentations to her in
connection with the disposition of certain
community stock. (Id. at p. 420.)
The wife brought an action for damages
against the husband, alleging statutory
claims for violation of state securities
laws, as well as common law claims for
intentional and negligent
misrepresentation and breach of fiduciary
duty. (Id. at pp. 422-423.) On
appeal from a judgment in favor of the
wife, the appellate court reversed the
judgment on the statutory claims, holding
that California's securities laws do not
apply to allocations of community stock
pursuant to marital settlement agreements.
(Id. at pp. 423, 432-433.) The
court did not hold that the wife
was barred from recovering on her common
law claims against the husband. Indeed,
the court expressly noted that because the
husband did not challenge the wife's
"right to a recovery per se under the
[common law] causes of action, . . . we do
not address [the wife's] right to a
recovery under those causes of action . .
. ." (Id. at p. 423, italics
omitted.) Accordingly, like Worton,
d'Elia does not resolve the issue
before us. n9
------------------------------------------
n9 d'Elia is also distinguishable
from this case because the wrongful
conduct at issue in d'Elia did
not involve the actual concealment of
community property, as Joanne has alleged
here. (See d'Elia v. d'Elia, supra,
58 Cal. App. 4th at p. 431.)
------------------------------------------
In framing arguments to justify the trial
court's dismissal of this action,
defendants for the most part fail to
acknowledge that this case is an action
for damages resulting from allegedly
tortious conduct. Instead, defendants
characterize this case as an attempt by
Joanne to relitigate spousal support and
community property issues already resolved
in the dissolution proceeding. Defendants
contend that "once the Family Court
acquires jurisdiction over community
property it retains exclusive jurisdiction
over that property." Citing Williams
v. Superior Court (1939) 14 Cal. 2d
656 [96 P.2d 334] and its progeny,
defendants suggest that Joanne's action
for damages is barred because the family
court already exercised jurisdiction over
Thomas's medical practice in the
dissolution proceeding, and therefore
[##519]
Joanne's sole remedy is to move to set
aside the judgment in that proceeding.
The cases on which defendants rely do not
support their argument. In Williams v.
Superior Court, supra, 14
Cal. 2d 656, the California Supreme Court
held "that where a proceeding has
been duly assigned for hearing and
determination to one department of the
superior court by the presiding judge of
said court in conformity with the rules
thereof, and the proceeding so assigned
has not been finally disposed of therein
or legally [#1182]
removed therefrom, it is beyond the
jurisdictional authority of another
department of the same court to interfere
with the exercise of the power of the
department to which the proceeding has
been so assigned. [Citation.] In other
words, while one department is exercising
the jurisdiction vested by the
Constitution in the superior court of that
county, the other departments thereof are
as distinct therefrom as other superior
courts. [Citation.] If such were not the
law, conflicting adjudications of the same
subject-matter by different departments of
the one court would bring about an
anomalous situation and doubtless lead to
much confusion." (Id. at p.
662.)
In In re Marriage of Schenck
(1991) 228 Cal. App. 3d 1474 [279 Cal.
Rptr. 651], the Court of Appeal applied
the rule stated in Williams to a
dissolution proceeding. The family law
department had entered an order which
awarded a wife "exclusive occupancy
of the former family residence for three
years and expressly reserved jurisdiction
over its ultimate 'valuation and
disposition.' " (In re Marriage
of Schenck, supra, at p.
1476.) Thereafter, the wife sought an
order from the law and motion department
allowing the sale of the husband's
community property interest in the
residence to satisfy accumulated child and
spousal support arrears. (Id. at
pp. 1476-1477.) The law and motion
department refused to issue the order and
advised the wife to bring the matter
before the family law department. (Id.
at p. 1477.) Citing Williams, the
Court of Appeal affirmed, holding that the
family law department had "priority
of jurisdiction" over the property
and thus the wife was required to seek
relief from that department in the first
instance. (In re Marriage of Schenck,
supra, at pp. 1482-1484, fn. 4.)
In Askew v. Askew (1994) 22 Cal.
App. 4th 942 [28 Cal. Rptr. 2d 284],
during the pendency of a dissolution
proceeding, a husband won a judgment
against his wife for fraud based on
allegations that he had purchased certain
properties with his separate funds but had
put title to the properties in joint
tenancy in reliance on certain
misrepresentations made by the wife. (Id.
at pp. 948-952.) As part of the judgment,
the trial court imposed constructive
trusts on the wife's interests in the
properties. (Id. at p. 952.)
After holding that the husband's recovery
could not be premised on the wife's false
statements of love and sexual desire
because of California's anti-heart-balm
statutes, the Court of Appeal addressed
whether the trial court had jurisdiction
to consider the "unsexy"
remainder of the case. (Id. at
pp. 961-964.) Citing In re Marriage of
Schenck, supra, 228 Cal.
App. 3d 1474, the appellate court
concluded that the trial court in the
fraud action "in effect usurped the
power and obligation of the family law
court [in the pending dissolution
proceeding] to determine the character of
the five properties. . . . By imposing
trusts on [the wife's] ostensible
interests in the five properties, the
civil court was removing from the family
law court the power to characterize [#1183]
and divide those properties as community.
Given that the family law court already
had subject matter jurisdiction to divide
the community property, the civil trial
court had no jurisdiction to so act."
(Askew v. Askew, supra,
at p. 962, original italics.)
Taken together, Williams, Schenck,
and Askew stand for the
proposition that when a dissolution
proceeding is pending in the family court,
another department of the superior court
may not act so as to interfere with the
family court's exercise of its powers in
that proceeding. (See, e.g., Glade v.
Glade (1995) 38 Cal. App. 4th 1441,
1449-1455 [45 Cal. Rptr. 2d 695].) That
proposition is inapposite here, however,
because at the time Joanne commenced this
action for damages, the dissolution
proceeding had been finally [##520]
disposed of by means of a final judgment.
There is nothing in the record to indicate
that during the pendency of this action,
the family court was exercising its power
over community assets or spousal support
in the dissolution proceeding, or that any
issue related to those matters remained to
be disposed of by the family court.
Accordingly, allowing Joanne to proceed
with this action for damages would not
interfere with the family court's exercise
of its powers in that proceeding.
III.
Res
Judicata
To
the extent defendants argue the dismissal
of Joanne's action for damages was
justified on the basis of res judicata, we
disagree. To that argument, the decision
in Worton speaks directly. As the
Worton court explained: "
'The doctrine of res judicata, whether
applied as a total bar to further
litigation or as collateral estoppel,
rests upon the sound policy of limiting
litigation by preventing a party who has
had one fair adversary hearing on
an issue from again drawing it into
controversy and subjecting the other party
to further expense in its reexamination.'
" (Worton v. Worton, supra,
234 Cal. App. 3d at pp. 1647-1648, quoting
Vella v. Hudgins (1977) 20 Cal.
3d 251, 257 [142 Cal. Rptr. 414, 572 P.2d
28], original italics.) Thus, a spouse who
conceals the existence of community
assets, thereby depriving the other spouse
of the opportunity fully to present his or
her case in a dissolution proceeding,
cannot claim that the judgment of
dissolution bars a subsequent tort action
based on that failure. (Worton v.
Worton, supra, at pp. 1647-1649.)
IV.
Litigation
Privilege
Defendants
also attempt to justify the dismissal of
Joanne's action for damages on the basis
of the "litigation privilege." (Civ.
Code, § 47, subd. [#1184]
(b).) According to defendants, Joanne's
claims are barred by the privilege because
they are "based entirely on
statements, communications and
publications by parties and their counsel
to a judicial proceeding." We
conclude, however, that the litigation
privilege issue is not properly before us.
As noted above, at the time the trial
court dismissed the action for lack of
jurisdiction, defendants' motion for
summary judgment based on the litigation
privilege was still under submission. The
trial court must be allowed to rule on
that motion in the first instance.
Accordingly, we do not reach the issue of
whether the litigation privilege applies
to this case. n10
------------------------------------------
n10 We do note, however, that the trial
court tentatively denied defendants'
motion for summary judgment based on the
litigation privilege on the ground that
there were triable issues of fact as to
the application of the privilege.
------------------------------------------
V.
Public
Policy
Finally,
to the extent defendants suggest Joanne
should be barred from pursuing her action
for damages for reasons of public policy,
we disagree. It is true that in some
instances the courts have concluded that
allowing a remedy in tort would be
contrary to public policy. (See, e.g., Nagy
v. Nagy, supra, 210 Cal.
App. 3d at pp. 1269-1270.) This is not
such a case.
Defendants suggest that because
"Civil Court judges are not trained
to render decisions in this field of
expertise, the Family Court is the only
court that can decide issues of community
property and spousal support." That
the damages Joanne seeks are related to
forfeited spousal support and community
assets -- matters with which family court
judges are undoubtedly more familiar --
does not alone justify limiting Joanne to
those remedies that may be available in
the dissolution proceeding. We see no
reason why a properly instructed jury
cannot be trusted to determine the value
of the pecuniary injury suffered by a
plaintiff who alleges her former spouse
tortiously concealed community assets from
her in the dissolution proceeding. (See d'Elia
v. d'Elia, supra, 58 Cal.
App. 4th at pp. 423, 433 [affirming an
award of $3.9 million on common law claims
against former spouse for misrepresenting
value of community stock].) [##521]
Defendants also contend "public
policy requires that a party be secure
from an endless stream of
litigation." Recently, the California
Supreme Court discussed similar policy
concerns in a case involving intentional
spoliation of evidence. (Cedars-Sinai
Medical Center v. Superior Court
(1998) 18 Cal. 4th 1 [74 Cal. Rptr. 2d
248, 954 P.2d 511].) In Cedars-Sinai,
the court held ". . . there is no
tort remedy for the intentional [#1185]
spoliation of evidence by a party to the
cause of action to which the spoliated
evidence is relevant, in cases in which,
as here, the spoliation victim knows or
should have known of the alleged
spoliation before the trial or other
decision on the merits of the underlying
action." (Id. at pp. 17-18.)
In so holding, the court noted that
"using tort law to correct misconduct
arising during litigation raises policy
considerations not present in deciding
whether to create tort remedies for harms
arising in other contexts." (Id.
at p. 8.) The court detailed several
policy considerations which weighed
against recognizing a cause of action for
"intentional first party spoliation
that is or reasonably should have been
discovered before trial of the underlying
action," including "the
prohibition against attacking
adjudications on the ground that evidence
was falsified or destroyed,"
"the strong policy favoring use of
nontort remedies rather than derivative
tort causes of action to punish and
correct litigation misconduct," and
"the uncertainty of the fact of harm
in spoliation cases." (Id.
at pp. 8, 11, 13.)
Although we recognize the "important
policies against creating tort remedies
for litigation-related misconduct" (Cedars-Sinai
Medical Center v. Superior Court, supra,
18 Cal. 4th at p. 4), we conclude that
those policies do not compel the same
result here as they did in Cedars-Sinai.
First, the court's concern in Cedars-Sinai
with promoting "finality in
adjudication" (id. at p. 10)
derived primarily from the fact that the
destruction of evidence is generally
considered intrinsic rather than extrinsic
fraud, which cannot serve as a basis for
setting aside a final judgment. (Ibid.)
The court was apparently concerned with
the propriety of allowing the maintenance
of a tort action under circumstances where
the underlying judgment cannot be
challenged. (See Kachig v. Boothe
(1971) 22 Cal. App. 3d 626, 636 [99 Cal.
Rptr. 393] [holding that facts
insufficient to constitute a basis for
setting aside a prior judgment cannot
serve as the basis for an action for
damages on a tort theory].) That concern
is not an issue here because the
concealment by one party of the existence
of a community asset constitutes extrinsic
rather than intrinsic fraud, which can
serve as a basis for setting aside an
otherwise valid and final judgment. (See,
e.g., In re Marriage of Stevenot,
supra, 154 Cal. App. 3d at pp.
1068-1069.)
Second, the court's reliance in Cedars-Sinai
on the adequacy of "nontort remedies
that seek to punish and deter the
intentional spoliation of evidence"
is not compelling here because of the
different circumstances involved. (Cedars-Sinai
Medical Center v. Superior Court, supra,
18 Cal. 4th at p. 11.) Most of the
remedies discussed by the court in Cedars-Sinai
-- the adverse evidentiary inference,
discovery sanctions, and State Bar
disciplinary sanctions -- do not apply
here, either because the alleged wrongful
conduct was not discovered during the
course of the dissolution proceeding or
because [#1186]
there is no allegation that Thomas's
counsel in the dissolution proceeding
participated in the alleged concealment of
community assets.
Setting aside the supplemental judgment
adjudicating Joanne's support rights and
interest in the community property would
not provide Joanne with a remedy
equivalent to that traditionally available
to a person injured by intentional
tortious conduct. As the court observed in
d'Elia v. d'Elia, supra,
58 Cal. App. 4th 415, the family court
does retain "the power to impose
sanctions on a party whose
misrepresentations required litigation to
undo any agreement or judgment." (Id.
at p. 418, citing Fam. Code, § 271.) That
power, however, is limited to awarding
attorney's fees and costs. (See Fam. Code,
§ 271, subd. (a).) The family court has
no power to award punitive damages. (See In
re Marriage of McNeill, supra,
160 Cal. App. 3d at pp. 557-558.) [##522]
Finally, the court's concern in Cedars-Sinai
with "the uncertainty of the fact of
harm in spoliation cases" is not
present here. (Cedars-Sinai Medical
Center v. Superior Court, supra,
18 Cal. 4th at p. 13.) Joanne's tort
claims are not premised on the destruction
of evidence, but on the alleged
concealment of community assets, which she
claims was facilitated by the alteration
of various documents produced during the
dissolution proceeding. In seeking to
prove her claims, Joanne will have to
offer evidence of the assets allegedly
concealed, and the jury will decide from
that evidence whether Joanne suffered harm
as a result of the alleged concealment.
There is no basis for concluding that
here, as in spoliation cases, ". . .
the fact of harm will be irreducibly
uncertain." (Ibid.)
The concern that permitting tort actions
under circumstances such as those present
here will result in a flood of frivolous
litigation does not justify limiting a
victimized spouse to the remedies
available in family court. As the Supreme
Court has observed, arguments proposing a
limit on tort actions because of an
anticipated flood of trifling lawsuits
"are not relevant in an intentional
tort case." (Self v. Self, supra,
58 Cal. 2d at p. 691.) Even in a case
premised on allegations of negligence,
" '[t]he court should not decline to
entertain a meritorious action against a
spouse . . . because of the dubious
apprehension that in some future case
trifling domestic difficulties may become
the subject of litigation.' " (Klein
v. Klein, supra, 58 Cal. 2d
at p. 694, quoting Spellens v.
Spellens (1957) 49 Cal. 2d 210, 241
[317 P.2d 613] (conc. and dis. opn. of
Schauer, J.).)
Furthermore, there is no evidence before
us that any such inundation will occur.
Indeed, San Diego County Certified Family
Law Specialists (the association), a
countywide association of specialists in
this area, contends [#1187]
otherwise. In its amicus curiae brief, the
association contends the "fraudulent
fabrication of documents and perjured
testimony" is "the exception
rather than the rule" in family law
cases. The association further notes that
"[c]ontingency attorney fee[]
arrangements will screen the specious
claims, if any, from the
meritorious." Finally, the
association contends "a decision that
permits tort litigation when fraud is
present will ultimately limit fraudulent
conduct and the number of subsequent
lawsuits."
We agree that public policy supports
permitting rather than prohibiting tort
actions in circumstances such as those
alleged to be present here. Allowing a
spouse who intentionally concealed the
existence of community assets during the
course of a dissolution proceeding to
avoid liability for punitive damages
likely would encourage such tortious
behavior. A spouse would be able to
practice concealment with little, if any,
risk. (Cf. Resnik v. Superior Court
(1986) 185 Cal. App. 3d 634, 637 [230 Cal.
Rptr. 1].) Traditional tort remedies,
including the risk of an award of punitive
damages, should have a greater deterrent
effect than the remedies available in
family court.
In summary, we find no policy reason to
prohibit a spouse like Joanne from
pursuing a tort action for damages against
her former spouse based on the alleged
concealment of community assets. In the
absence of a pending dissolution
proceeding in which the parties' property
and support rights have yet to be finally
determined, n11 a plaintiff who contends
she suffered injury because her former
spouse tortiously concealed community
assets from her, thereby preventing her
from fully presenting her case in the
dissolution proceeding, is entitled to
bring a subsequent tort action based on
the alleged concealment.
------------------------------------------
n11 We express no opinion as to whether a
tort action may be maintained when the
dissolution proceeding has not yet
resulted in a judgment finally
adjudicating the parties' property and
support rights.
------------------------------------------
DISPOSITION
The
order of dismissal is reversed. Appellant
to recover costs on appeal.
Benke, Acting P. J., and Haller, J.,
concurred.
A petition for a rehearing was denied
October 20, 1998, and respondents'
petition for review by the Supreme Court
was denied January 13, 1999. Mosk, J., and
Kennard, J., were of the opinion that the
petition should be granted.
End of Opinion.
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