## Facts

- Denise and Thomas Rossi married in 1971.
- In late 1996, Denise’s workplace lottery pool won $6,680,000; Denise’s share was $1,336,000, payable in 20 annual installments of $66,800 (before taxes).
- In January 1997, shortly after learning of the win, Denise filed for dissolution.
- Denise took affirmative steps to conceal the winnings: omitted them from required disclosures and the settlement agreement, and routed lottery correspondence and checks to her mother’s address.
- A dissolution judgment was entered in April 1997 without any disclosure or division of the lottery asset.
- In 1999, Thomas first learned of the winnings after a buyout solicitation letter addressed to Denise arrived at the marital residence.
- Thomas moved to set aside the judgment and sought an award of 100% of the lottery winnings under Family Code § 1101, alleging fraudulent breach of spousal fiduciary duties.
- The trial court found Denise acted with fraud, oppression, and malice, and awarded Thomas all lottery winnings.
- Denise appealed, arguing Thomas’s alleged misconduct barred relief (unclean hands) and asserting she believed the winnings were her separate property as a gift.

## Issues

1. Whether Denise’s nondisclosure and concealment constituted a fiduciary breach rising to fraud, oppression, or malice under Civil Code § 3294 for purposes of Family Code § 1101(h).
2. Whether the lottery winnings were community property subject to division rather than Denise’s separate property.
3. Whether Family Code § 1101(h) permits awarding the nonbreaching spouse 100% of the undisclosed asset.
4. Whether an unclean hands defense bars relief under Family Code § 1101(h).

## Decision

- The Court of Appeal affirmed the postjudgment order awarding Thomas 100% of the lottery winnings.
- Substantial evidence supported the trial court’s finding that Denise intentionally concealed the winnings and acted with fraud within the meaning of Civil Code § 3294.
- The court upheld the determination that the lottery winnings were community property and that Denise’s “gift” claim lacked credibility.
- The court held Family Code § 1101(h) authorized the 100% award given the fraudulent concealment.
- The court rejected Denise’s unclean hands argument, concluding the statute provides no such exception.

## Legal Principles

- Spouses owe each other fiduciary duties of the highest good faith and fair dealing in managing and disclosing marital assets during dissolution proceedings.
- The duty of disclosure in dissolution is continuing and applies even absent a request from the other spouse.
- Under Family Code § 1101(h), when a spouse’s fiduciary breach involves fraud, oppression, or malice (Civil Code § 3294), the court may award the nonbreaching spouse 100% of the undisclosed or transferred community asset.
- Community funds used to acquire an asset during marriage support a community-property characterization, and credibility findings on separate-property claims are reviewed deferentially on appeal.
- Equitable defenses such as unclean hands do not limit a statutory penalty remedy where the governing statute does not provide an exception.

## Conclusion

The court affirmed a complete forfeiture remedy for intentional concealment of a community asset in dissolution proceedings, holding that fraudulent nondisclosure justified awarding the nonbreaching spouse 100% of the hidden lottery winnings and that alleged misconduct by the other spouse did not bar the statutory relief.


In re Marriage of Rossi, 90 Cal. App. 4th 34 (Cal. Ct. App. 2001)