COURTS MUST “ACTIVELY MANAGE” DISCOVERY TO TRY TO REDUCE BURDEN (AND CO

In an opinion issued recently, the Colorado Supreme Court requires trial courts to “actively manage” discovery in divorce cases under C.R.C.P. 16.2.

In the Gromicko case, Wife asserted that a business was not only Husband’s employer but was, in fact, his alter ego and therefore marital property subject to division. Wife made broad requests for information (“discovery”) about the business, to prove her alter ego theory but also to get all information she might be entitled to after she proved her theory. In other words, she wanted to get all the information at once, without having to come back for more.

The District Court (the trial court) granted Wife’s broad discovery requests but did not make any findings as to what the appropriate scope of discovery in the case was in light of the “reasonable needs of the case”. Nor did the court tailor the discovery allowed to the needs of the case.

The Supreme Court enforced the restrictions in C.R.C.P. 16.2 on discovery which are intended to reduce the costs of cases for litigants by requiring the trial court to be actively involved in managing discovery disputes early in a case. The Supreme Court determined that Wife could seek discovery on the alter ego (or “piercing the veil”) theory at first. Only if she proved that she was entitled to pierce the corporate veil would she be allowed to seek further discovery on the value of the company as a marital asset. At each level of discovery, the trial court must actively manage the needs and rights of the parties.

What does this case mean for you?

Whether you are seeking more information than is being provided by your spouse or partner in a dissolution or separation or are seeking to defend against overly broad requests, make sure you seek a status conference with the Court early on and make sure the Court makes all the appropriate findings as to why the discovery is or is not appropriate in your case. The Court will need to understand why you need the discovery at this stage of the case. Expect trial courts to be hands-on in managing discovery in divorce cases now that the Supreme Court has spoken on this issue. Attorneys will need to be prepared to justify discovery requests to the court before being allowed to make the request. Generally, this Colorado Supreme Court opinion should be good news for parties to a divorce case who are trying to limit the costs of the case, but may in some cases make it more difficult to get relevant information.

If you are contemplating a divorce or legal separation, or are already in the process of one, you need an attorney who knows how to minimize the cost of discovery and maximize the relevant information you get from the other party. Dunsing & Deakins, LLC has decades of experience with discovery in family law and civil cases and can help you do just that. Call today for a free consultation.

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