What Can I Do If My Spouse Hid Assets During Our Maryland Divorce Proceeding, But I Only Found Out After the Divorce Became Final?

Finding out well after you’re divorced that your ex-spouse hid substantial marital wealth and assets during the divorce process is undeniably frustrating and infuriating. It is, however, also potentially the basis for legal action. Depending on the details of your divorce (such as whether you created a marital settlement agreement) and the kind of financial malfeasance in which your ex-spouse engaged, you may possibly be able to reopen your divorce or, alternately, you may be able to seek recovery based upon your spouse’s breach of your marital settlement agreement. To learn more about your options, speak to an experienced Maryland divorce attorney right away.

A recent case from Baltimore County offers a view into what a spouse can sometimes do in that kind of situation. In this case, the CEO of a candy equipment supplier and his wife divorced in 2006. A dozen years later, the wife asked the judge to vacate that 2006 divorce judgment.

The husband, according to the wife, had engaged in fraud, concealing certain marital assets during the negotiation of the couple’s property settlement agreement. That fraud, according to the wife, had the effect of altering those negotiations and the outcome of the agreement.

The wife’s legal team, however, wisely went further than just asking for a reopening of the divorce. In the wife’s amended petition to the court, she not only asked the judge to throw out the divorce judgment, but she also made additional claims. She asked the judge to set aside or void the property settlement agreement or else to find the husband in breach of the agreement.

These additional claims proved fruitful. The trial and the appeals courts both agreed that most of the wife’s claims were not things she could pursue. The attempt to reopen the divorce failed because the kind of fraud the wife alleged was not the type of fraud that allows the courts to reopen a finalized divorce judgment. The law in Maryland only allows the reopening of a finalized divorce upon proof of extrinsic fraud, and the type of misconduct this wife alleged was a different type – intrinsic fraud.

A potential breach of the settlement agreement’s ‘Full Disclosure’ clause

Although that claim was unsuccessful, one of the wife’s additional claims was not. The appeals court ruled in the wife’s favor on her contract claim. The property settlement agreement that the couple completed as part of their divorce case contained within it a clause entitled “Full Disclosure.” That paragraph said that the parties consummated the agreement under “the assumption that each of the parties hereto has made a full, complete and total disclosure to the other, of the nature and extent of all the assets and obligations of the parties.”

The wife’s assertion was that, when the husband improperly hid various “bank accounts, financial assets, income and business assets” during the settlement agreement negotiations, he breached that provision of the contract. This, according to the appeals court, was the foundation of a viable breach of contract claim, and the wife should have been allowed to go forward on that theory of liability.

Even in divorce, one probably likes to hope that one’s spouse will be honest and forthright in matters of property distribution. Unfortunately, that doesn’t always happen. This is one reason among many to make sure that you have a diligent and powerful divorce advocate by your side every step of the way, protecting you. Rely on the skilled Maryland family law attorneys at Anthony A. Fatemi, LLC to provide you with the useful advice and effective advocacy you deserve. To learn more about how we can assist you, contact us at 301-519-2801 or via our online form.

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