Friday, May 19, 2006
Court Finds No Hidden Assets, Undue Influence, In Billionaire Burkle’s Dissolution Agreement
By a MetNews Staff Writer
Reputed billionaire Ronald W. Burkle did not conceal assets from his wife, Janet E. Burkle, when they executed a 1997 marital agreement, this district’s Court of Appeal ruled yesterday.
The panel affirmed an order by retired Los Angeles Superior Court Judge Stephen Lachs, sitting by stipulation as a private judge, denying Janet Burkle’s motion to set aside the agreement.
The Burkles were married in 1974. In June1997 Janet Burkle filed for divorce.
By August of that year they were trying to reconcile.. In November they executed a marital dissolution agreement.
They then lived together until 2002. In 2003 Janet Burkle again filed for divorce, and claimed that the agreement executed in 1997 was void and unenforceable because she was so depressed and emotionally dependent upon her husband that she did not sign the agreement of her own free will, and because her husband had concealed assets and financial information from her.
She claimed that her husband concealed information about potential mergers of his grocery store chain.
Justice Paul Boland, writing for the court, disagreed, saying:
“[N]o evidence indicates actual concealment or misrepresentation of information relating to the mergers. Again, Ms. Burkle ignores the trial court’s findings. As we have seen, the court concluded that Mr. Burkle did not conceal assets or significant financial information from Ms. Burkle. This ultimate conclusion was based on substantial evidence reflected in numerous subsidiary factual findings.”
Janet Burkle also argued that, since her husband benefited from the marital agreement, there is a presumption of undue influence that he has the burden of overcoming.
Boland disagreed, saying:
“We conclude that a contract between spouses that “advantages one spouse” . . . and therefore raises a presumption the transaction was induced by undue influence, is a transaction in which one spouse obtains an unfair advantage over the other.”
Boland said the contract did not give Ronald Burkle an unfair advantage, noting:
“[T]he trial court found that the agreement provided mutual advantages to both Ms. Burkle and Mr. Burkle; that Ms. Burkle ‘in fact obtained the advantage she was bargaining for of financial security’; and that no presumption of undue influence arose by virtue of the parties’ entry into the agreement. We can discern no flaw in the trial court’s findings on this point, which are further supported by the express terms of the agreement itself, as well as by the fact that Ms. Burkle was advised by a number of sophisticated lawyers when she executed the agreement.”
The court also held that Family Code sections requiring parties to dissolution to exchange verified financial statements was not applicable to post-marital agreement entered into after dissolution proceedings had been placed in abeyance, and for the purpose of reconciliation, and not in contemplation of the imminent dissolution of the marriage.
In the same case, earlier this week the state Supreme Court declined to review a Court of Appeal ruling, also authored by Boland, striking down a two-year-old state law that requires financial information in divorce files be sealed if either party requests it.
Janet Burkle’s legal team included Philip Kaufler, Hugh John Gibson and Hillel Chodos; Ronald Burkle was represented on appeal by Dennis M. Wasser and Bruce E. Cooperman of Wasser, Cooperman & Carter, Irving H. Greines of Greines, Martin, Stein & Richland, and Patricia L. Glaser of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, which was renamed this week following the departure of former co-head of litigation Louis “Skip” Miller.
Copyright 2006, Metropolitan News Company