In re Marriage of Rossi

In In re Marriage of Rossi (2001) 90 Cal.App.4th 34, the wife filed a petition for dissolution shortly after she won $1,336,000 in the California lottery. (Rossi, supra, at p. 36.) The wife did not disclose her lottery winnings in her schedule of assets and debts, her final declaration of disclosure, or her income and expense declaration. (Id. at p. 37.) The parties entered into a marital settlement agreement (MSA) in which they warranted that they had no undisclosed property of any kind other than the property specified in the MSA, and agreed that if a court were to later determine that a party possessed any property not specified in the MSA, that party would pay the other party "'on demand an amount equal to the full market value of such property . . . .'" (Ibid, italics omitted.) Two years after judgment of dissolution was entered, the husband learned of the wife's lottery winnings and filed a motion seeking, among other relief, 100 percent of the winnings under section 1101, subdivision (h). (Rossi, supra, 90 Cal.App.4th at p. 38.) The trial court found that the wife breached her fiduciary duties under sections 721, 1100, and other statutes, and that she intentionally breached her warranties and representations in the MSA by fraudulently failing to disclose her lottery winnings. (Id. at p. 39.) The court found that the wife's failure to disclose her winnings constituted fraud, oppression, and malice within the meaning of Civil Code section 3294 and section 1101, subdivision (h). (Ibid.) The court awarded the husband 100 percent of the lottery winnings under the terms of the judgment and MSA and section 1101, subdivisions (g) and (h). (Ibid.) The Court of Appeal in Rossi concluded that the evidence sufficiently supported the trial court's findings that the wife's intentional concealment of the lottery winnings constituted fraud within the meaning of Civil Code section 3294, and that the winnings were community property. (Rossi, supra, 90 Cal.App.4th at pp. 40-41.) The Rossi court decided that because the evidence supported a finding of fraud under Civil Code section 3294, "the family court properly concluded that under these circumstances, the husband was entitled to 100 percent of the lottery winnings under section 101, subdivision (h)." (Id. at p. 42.)