## Facts

- Patricia A. Duffy and Vincent J. Duffy married in 1962 and separated in 1997 after a long marriage with seven children.
- Vincent, who had business education, assumed primary control of family finances after Patricia reported she lacked experience managing accounts.
- Patricia testified Vincent was often dismissive when she asked about money, and she frequently did not ask for transaction details but signed documents.
- During the marriage, the parties made several community investments, including real property and a business investment.
- Vincent received an employment-related severance package that included cash and stock; he rolled assets into an IRA and invested heavily in Excalibur Technologies Corp. stock.
- The concentrated Excalibur investment suffered substantial losses.
- In dissolution proceedings, the trial court found Vincent breached a fiduciary duty of disclosure concerning these transactions and awarded Patricia $400,684 in damages.
- The trial court denied Patricia’s request for attorney’s fees incurred litigating the fiduciary-duty claim.
- Vincent appealed the breach finding and damages; Patricia cross-appealed the fee denial.

## Issues

1. Whether Vincent breached a statutory or fiduciary duty of disclosure regarding the rollover and investment of the severance-related assets (including the IRA and Excalibur stock).
2. Whether the governing spousal fiduciary-duty statutes imposed a general duty of care in investment decision-making comparable to a business partner’s standard.
3. Whether Patricia was entitled to attorney’s fees based on litigating the alleged breach of fiduciary duty.

## Decision

- The Court of Appeal reversed the finding that Vincent breached a fiduciary duty of disclosure and vacated the $400,684 damages award.
- The court held the evidence did not show concealment, misrepresentation, refusal to disclose, or other actionable nondisclosure tied to the challenged transactions.
- The court held the statutes did not impose a generalized “prudent investor” or partnership-like duty of care on a managing spouse for investment choices.
- The court affirmed the judgment in all other respects, including denial of Patricia’s request for attorney’s fees.

## Legal Principles

- Spouses owe each other fiduciary obligations in managing and controlling community property, including duties of good faith, fair dealing, and disclosure/accounting as required by statute.
- A breach of the duty of disclosure requires proof of actionable nondisclosure (e.g., concealment, misrepresentation, or refusal to provide required information), not merely one spouse’s greater sophistication or a history of dismissive communication.
- The statutory spousal fiduciary framework does not, without more, convert poor or risky investment outcomes into fiduciary breaches by imposing a broad partnership-like standard of investment prudence.
- When no fiduciary breach is established, damages premised on that breach and fee requests dependent on success on the breach theory fail.

## Conclusion

The court set aside the dissolution judgment’s breach-of-fiduciary-duty determination and damages award because the record did not establish actionable nondisclosure and because spousal fiduciary statutes did not impose a partnership-style duty to make only prudent investment decisions; the denial of attorney’s fees was affirmed.


In re Marriage of Duffy, 91 Cal. App. 4th 923 (Cal. Ct. App. 2001)