The U.S. peered into the private lives of Jamie and Frank McCourt, owners of the Dodgers, as they publicly litigated their contentious divorce in California. The former couple's dispute over ownership of the California baseball team resulted in what is rumored to be one of the world's most expensive divorces. After substantial attorney fees and costs were racked up throughout the proceeding, the McCourt's reached a divorce settlement in October 2011.
In consideration for relinquishing any rights to the Dodgers, Ms. McCourt received $131 million tax-free in addition to several expensive pieces of real property. Despite receiving what seems like an enormous amount of money, Ms. McCourt and her divorce attorney now want the settlement thrown out as the Dodgers were later sold for $2 billion. Assuming the Dodgers were a community property asset, Ms. McCourt settled for $770 million less than she would have received if the proceeds of the sale were divided equally.
The basis of Ms. McCourt's request to set aside the Marital Settlement Agreement is fraud. She argues that her former husband deliberately misled her regarding the true value of the Dodgers. At a recent court hearing, Mr. McCourt's divorce lawyers argued that Ms. McCourt is not entitled to set aside the settlement because she willingly agreed its terms and her recent claims are baseless. If the judge agrees with Ms. McCourt and sets aside the judgment, the parties and their attorneys will re-litigate all issues related to the Dodgers. The court will have to determine, under California family law provisions, whether the Dodgers were community property or the separate property of Mr. McCourt. Prior to settlement, the court determined that the parties' post-marital agreement giving Mr. McCourt full ownership of the Dodgers was invalid.
As divorce attorneys will advise their clients, under the California Family Code, the commission of perjury on the Final Declaration of Disclosure is a legal basis to set aside a judgment. At the end of each divorce case in San Diego, the parties are required to complete a Final Declaration of Disclosure, unless a proper waiver is effectuated. The Final Declaration of Disclosure is a series of forms, which are signed under the penalty of perjury, on which the parties list the value of all assets.
Ms. McCourt's attorney argues that she relied on the most recent figures presented to her in accepting the settlement. If Mr. McCourt in fact lied on those forms, Ms. McCourt may be able to set aside their judgment subject to statute of limitation requirements. The court has the ability to limit the set aside only to those portions of the agreement which were materially affected by the nondisclosure. In this case, only the portions related to the Dodgers would be addressed.