Nature of the Case
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Facts
H and W were married in 1971. In early November 1996, Bernadette Quercio formed a lottery pool with a group of her coworkers, including W. Each member of the pool contributed $5 per week. W contributed her $5 for a short time--three weeks--but, according to her papers, on December 1, 1996, or about that date, she withdrew from the pool. In late December 1996, Quercio called W to say that their group had won the lottery jackpot. W's share was $ 1,336,000, to be paid in 20 equal annual installments of $66,800 less taxes, from 1996 through 2015. W did some research and claimed that she got a gift from Quercio and also filed for divorce as she did not want H to take the monies. W used her mother's address to receive checks and other information from the California Lottery because it would be safer since H would not see the lottery checks. H and W talked about a settlement the same day. H was eventually given several papers to sign to finalize the dissolution. These included a marital settlement agreement and a judgment of dissolution. W represented a final schedule or assets and debts but did not include the lottery winnings. Paragraph 9.1 of the marital settlement agreement is a warranty about disclosure of assets: 'Each party warrants to the other that prior to the effective date of this Agreement neither was possessed of any property of any kind or description whatsoever other than the property specifically mentioned in this Agreement, and that such party has not made, without the knowledge and consent of the other, any gift or transfer of any property within the past three years. If it shall hereafter be determined by a Court of competent jurisdiction that one party is now possessed of any property not set forth herein . . . such party hereby covenants and agrees to pay to the other on demand an amount equal to the full market value of such property on the date hereof or on the date of judgment in any action to enforce the provisions of this paragraph.' Judgment of dissolution was entered, and H filed for bankruptcy. In May 1999, a letter was sent to H's home address, asking if W was interested in a lump-sum buyout of her lottery winnings. H filed a motion to set aside the dissolution of marriage based on fraud, breach of fiduciary duty and failure to disclose. H asked the court to enforce the disclosure penalty provision of the judgment of dissolution. H sought an award of 100 percent of the lottery winnings pursuant to section 1101, subdivision (h), which penalizes a breach of fiduciary duty by a spouse in dissolution proceedings. H asserted the lottery winnings are her separate property because the share she received was a gift, and because the parties were already separated when the group hit the jackpot. The trial court found that W intentionally failed to disclose her lottery winnings in the marital settlement agreement. It found that W breached her fiduciary duties. The trial court awarded H 100 percent of the lottery winnings pursuant to paragraph 9.1 of the marital settlement agreement, and Family Code section 1101, subdivisions (g) and (h). W appealed.
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