Re-Opening Your Divorce: Duty of Financial Disclosure in Your Colorado Divorce Case

Alimony

C.R.C.P. 16.2

If a party to a divorce is found to have failed to disclose a material asset within a 5-year period, the court may re-open the divorce in order to redistribute property and debts. Colorado Rules of Civil Procedure Rule 16.2(e)(10).

Parties in a divorce action are required under the Colorado Rule of Civil Procedure to fully and honestly disclose all facts that materially affect their interests and rights.  Since the enactment of Colorado Rules of Civil Procedure Rule 16.2, the Colorado appellate courts have interpreted and applied this rule.  The cases have clarified further what duties of disclosures parties in a divorce or child custody matter owe to one another.

The Cases

The Colorado Supreme Court in IRM of Scelp, specifically stated “the new disclosure duties, in contrast, shift the responsibility for omissions or misstatements from the party receiving the documents to the party submitting them. Subsection (e) of C.R.C.P. 16.2 establishes the new affirmative disclosure duties. It requires that parties disclose all facts that materially affect the rights and interests of the parties: Parties to domestic relations cases owe each other and the court a duty of full and honest disclosure of all facts that materially affect their rights and interests and those of the children involved in the case. The court requires that, in the discharge of this duty, a party must affirmatively disclose all information that is material to the resolution of the case without awaiting inquiry from the other party. This disclosure shall be conducted in accord with the duty of candor owing among those whose domestic issues are to be resolved under this Rule 16.2.” IRM of Scelp, 228 P.3d 151, 156 (Colo. 2010).

The Court explained how the consequences had strengthened against a non-disclosing spouse, because “[t]he new disclosure duties specified in C.R.C.P. 16.2(e)(1) operate in tandem with the five-year retention provision of C.R.C.P. 16.2(e)(10). The five-year retention provision states that for any disclosures made under the new rules, the court shall retain jurisdiction for a period of five years after the entry a decree to reallocate assets and liabilities if either party failed to comply with his or her affirmative duties to disclose financial information.” IRM of Scelp 228 P.3d at 156.

The Colorado Court of Appeals in IRM of Hunt, 353 P.3d 911 (Colo. App. 2015) found that the parties, because of Rule 16.2, are under an affirmative duty to provide the documents listed in Rule 16.2. If one of the parties fails to provide documents that are required to be disclosed, then the Court is required to look at whether the non-disclosure “materially affects” the outcome.

The Colorado Court of Appeals in IRM of Runge, 415 P.3d 884 (Colo. App. 2018) found the ex-wife failed to state sufficient grounds to trigger a post-marriage-dissolution-decree allocation of undisclosed or misstated assets, where she asserted her suspicions and speculations that ex-husband likely failed to disclose and misrepresented material assets, but ex-wife did not allege that ex-husband failed to disclose any specific items mandated under disclosure rule in marriage-dissolution cases, ex-husband certified that he had provided all such items, and ex-wife chose to enter into the separation agreement only one month after the temporary orders hearing despite the extensive financial documentation provided by ex-husband at the time and a statement from her attorney that the case was complicated.

Kalamaya | Goscha is a Colorado law firm founded by Ryan Kalamaya and Amy Goscha. The boutique mountain law practice specializes in divorce, child custody, and family law. Kalamaya | Goscha has law offices in Edwards, Aspen, and Glenwood Springs. To speak to an attorney call (970) 315-2365.

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