Discovery broadly refers to the process of obtaining additional information or documents from another party during litigation. The information a litigant should seek varies from case to case and depends on the claims/defenses unique to that case. This article will focus primarily on financial discovery in family law cases, i.e. how to obtain records and information necessary to calculate child support, determine spousal maintenance, and divide community property.
Certain information is required to be exchanged in every case. For Arizona family law cases, the mandatory disclosures for specific contested issues are enumerated in Rule 49 of the Arizona Rules of Family Law Procedure. Although the rule requires this information to be exchanged within forty (40) days after the respondent files his or her response, it is rarely strictly enforced. This does not mean that litigants have unlimited freedom to delay the disclosure process, these disclosures still can be compelled by court order if not timely provided. If the Court has to compel disclosures or discovery answers from a party, it can enter financial sanctions or even bar that party from asserting particular claims or defenses during the litigation. These consequences can be severe so it is important to follow the rules regarding disclosure and discovery.
When the mandatory disclosures are insufficient and/or additional information is required, either party may “propound” or issue discovery requests. Examples of discovery requests include requests for production, requests for admission, uniform and nonuniform interrogatories, and subpoena. Depositions are another discovery tool available when you want to elicit more elaborate answers or testimony from a particular party or witness. Each discovery tool has respective advantages and disadvantages. For example, the scope of requests for production may be limited to information or documents in the opposing party’s possession or control. This may require you to use subpoena if you seek information from a third party. Requests for production are also limited in number to ten discrete items or categories of items requested. You will want to familiarize yourself with the applicable rules to protect yourself against discovery sanctions and ensure that you receive the information you need for your case.
Potentially Relevant Information
Most financial disputes in family law cases involve one party misrepresenting his or her income or assets. This is especially common when a party is self-employed or has multiple sources of income. If you believe the opposing party is under-reporting his or her income (or exaggerating expenses to manipulate child support), you likely will need to obtain additional evidence to support your suspicion.
A cost-effective way to approach this problem is first to review any bank or financial records exchanged under Rule 49. Specifically, you can compare total deposits to claimed income. Claimed expenditures also may help in this regard. If a party’s Affidavit of Financial Information claims monthly expenses that exceed claimed net income, this discrepancy may be material and worthy of further investigation. You also can review the financial records for transactions with other undisclosed accounts. For example, maybe a party occasionally transferred funds from a disclosed checking account to an undisclosed savings account or deposited a portion of his or her paycheck into an undisclosed account. If you discover additional account numbers not disclosed, you can ask the opposing party to supplement disclosures to include those accounts. If he or she refuses, you can issue a subpoena to the financial institution for direct production of that information, though there are costs to consider when issuing subpoenas. In addition to the filing fee with the Superior Court, the responding party also is entitled to statutorily-defined costs to answer the subpoena. You can ask the family court to order the opposing party to reimburse these costs but that is never guaranteed so it is important to weigh the potential cost against the benefit of subpoenas. This is especially important when considering whether to send blind subpoenas to financial institutions if you suspect a party is maintaining concealed accounts. You usually will want to exhaust every avenue to discover those accounts more cost-effectively to narrow the aim, so to speak, of additional subpoenas.
Another way to determine a party’s income is to request copies of any credit applications, including automobile or home loan applications, to review the income the opposing party reported to the lender. This often can be helpful because there is far less incentive for a party to under-report income to a lender than to a family court.
It is important to keep in mind that Rule 49 is only the minimum requirements for each contested issue. It does not limit the scope of discovery requests. Consider child support, as an example. Rule 49 does not require bank statements to be disclosed in child support cases. But the statements may be relevant to prove additional sources of income or discrepancies in other factors used to calculate child support. It also could be relevant to request additional information regarding former employers if a parent is voluntarily unemployed or underemployed. Another example unique to child support cases occurs when a parent claims that a source of income is actually a “loan” usually from a family member or friend. Issues like this can be more delicate because you do not want your discovery requests to alert the opposing party of a factual or evidentiary defect in his or her claim, but at the same time you want to use every available tool to protect yourself.
If a party is self-employed, the scope of discovery can be far broader and more complex. You may need to acquire extensive business records to review the business accounting practices.
Unbundled Discovery Services
We freely admit that not everyone needs to hire a family law attorney. Many cases can be handled completely without the additional expense. But discovery can be onerous to self-represented litigants because the rules can be a proverbial minefield for costly mistakes. Our family law attorneys offer complimentary consultations you can use to focus on the discovery phase of your case or, if you need a little more help, we offer affordable unbundled discovery packages where our attorneys help you execute a comprehensive discovery strategy to ensure that you obtain all of the information you need to support all of the claims and defenses asserted in your case.