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I am middle of divorce and my family law attorney said there

is nothing much we can...
I am middle of divorce and my family law attorney said there is nothing much we can do anymore about property issues for companies in family court. I am looking for the way to make a claim in civil court if its possible. Here is the situation. There are two companies A and B which is managing company having only client A. My husband owns only B because he can not own A legally since its medical corporation. A owens B. I can not simply ask half of what he has for B, because A never pays B, B bought equipments for A for free which creates only debt for B. My husband is CEO and directors of both A and B. He transfers money between A or B and his personal account anytime he wants. I want to prove that A and B are same same company, thus he owens A. Is it called alter ego? If so, is it possible to claim alter ego between A and my husband even he is not a legal owner of A? (California)
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Answered in 2 minutes by:
11/17/2017
LegalGems
LegalGems, Lawyer
Category: Family Law
Satisfied Customers: 11,163
Experience: Experienced Family Law Attorney
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Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

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The alter ego concept is a subcategory of the "piercing the corporate veil" doctrine and the factors that are required are set forth in Arnold v. Browne (1972) 27 CA 3d 386;

the problem is that the family court, not civil court, has jurisdiction over the spouse's property, to determine what is separate, what is community and if there has been commingling.

This gives the court jurisdiction over community property:

https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=2550.

Which would include community labor;

Code 2650 gives the court jurisdiction over separate property:

https://leginfo.legislature.ca.gov/faces/codes_displayexpandedbranch.xhtml?tocCode=FAM&division=7.&title=&part=&chapter=&article=

So any issues regarding the property of the spouses would need to be determined in the family court;

The court may "bifurcate" an issue and hold a trial on that issue alone; here is that rule:

http://www.courts.ca.gov/cms/rules/index.cfm?title=five&linkid=rule5_390

This is a complicated issue so if you sit down with your attorney I'm sure s/he will be able to explain their analysis of your situation.

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Customer reply replied 28 days ago
I was told its not worth it unless I have enough money to keep fighting. I was advised to settle for nothing for property....He is now closing B and already opened 4 other companies to hide money. If we settle in family court, do I have a option to open a case in civil court then? In civil court, I might be able to hire a attorney on contingency fee basis. Any advise?

Unfortunately any jurisdictional issue would remain with the family court; a party can request a forensic accountant be hired at the expense of the other party to help locate hidden assets; similarly one can request attorney fees and costs to be paid by the other party per Family Code 2030.

But civil court does not have jurisdiction over property that is addressed in a divorce; enforcement of the decree would revert back to the family court, for example.

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