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    The Lawletter Blog

    FAMILY LAW: Errors on Mandatory Financial Statements

    Posted by Gale Burns on Wed, Mar 9, 2011 @ 13:03 PM

    The Lawletter Vol 35 No 4, March 4, 2011

    Brett Turner, Senior Attorney, National Legal Research Group       

    A large and growing number of states require the parties in a divorce case to file a financial statement with the court.  The statement must list the parties' assets, the values thereof, and sometimes the filing party's position as to the classification of the assets as marital or separate property.

    These statements generally constitute admissible evidence if the case is tried.  See, e.g., In re Marriage of Hubbs, 843 N.E.2d 478, 486 (Ill. App. Ct. 2006) ("[A] financial statement is competent evidence of value[.]"); Yauch v. Yauch, 901 So. 2d 920 (Fla. Dist. Ct. App. 2005) (where wife valued van at $4,000 on her financial statement and no other evidence of value was presented, trial court erred by valuing van at $0; valuation had no support in the record); Winter v. Winter, 857 N.Y.S.2d 69 (App. Div. 2008) (where wife's net worth statement valued vehicle at $11,000, trial court erred by valuing the vehicle at its $15,000 purchase price).  See generally 1 Brett R. Turner, Equitable Distribution of Property § 4:5 n.21 (3d ed. 2005 & Supp. 2010).  In particular, a financial statement that supports the opposing party's position may receive considerable weight as an admission against interest.

    Because financial statements potentially carry so much weight, it is critical that the statement not contain errors.  But it is impossible to avoid errors completely, especially when a statement must be filed early in the case, before discovery is complete.

    What should a party do when a mandatory financial statement contains an inadvertent error? A good example of what not to do is Doyle v. Doyle, Nos. 2007‑CP‑01925‑COA, 2008‑CP‑01927‑COA, 2010 WL 3221909 (Miss. Ct. App. Aug. 17, 2010) (not yet released for publication).  There, the husband filed a financial statement that valued a vehicle at $23,000, subject to a $28,000 lien.  But the statement listed the equity in the vehicle at positive $5,000.  The husband claimed that this number was a typographical error, with the minus sign simply omitted.  An amended statement was apparently filed, but it did not appear in the record.

    The husband did not introduce any other evidence as to the value of the vehicle.  The trial court therefore had two pieces of evidence before it:  the financial statement, which supported two different values (positive and negative $5,000), plus the husband's oral testimony that the negative value was correct.  The trial court chose to believe the positive value.  By a 2-1 margin, the appellate court affirmed.

    The husband in Doyle acted prudently in filing an amended financial statement.  But he should have made certain that the amended statement appeared in the record.  In addition, he should have moved to strike the erroneous financial statement from the record.  Given that the erroneous statement remained in the record, he should have introduced positive evidence to support his trial testimony.  In particular, it would have been very easy to introduce the value of the vehicle stated in a standard reference manual on the value of used vehicles.  See 2 Turner, supra, § 7:16 nn.21, 23.  It might also have been helpful to ask the wife her opinion on the value of the vehicle.  By taking none of these steps, the husband left himself open to the risk that the court would accept the value stated on the first financial statement.

    Topics: legal research, family law, Brett turner, financial statements, inadvertent error, The Lawletter Vol 35 No 4

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