The Who, When, Where, and What of Divorce Discovery | Episode 131

There is a lot to navigate during the initial phases of the divorce process. It all starts with discovery; a process you and your attorney will approach together. During this episode, we discuss the details of the formal discovery process and the relative tools your attorney may choose to utilize to get the information you need. 

We talk about the parameters around open disclosure, resolving discovery disputes, and why definitions are important. We also touch on what happens when you are not transparent during the process, how the role of a business evaluator differs from a forensic accountant, and more. 

Key Points From This Episode:

• A definition for divorce discovery.
• The starting point according to Colorado law which says that every party deserves fair and full disclosure.
• Colorado’s rule for civil procedure 16.2 and why Amy and Ryan reference it so frequently.
• How your attorney should approach the formal discovery process.
• Precedent for the need for parameters around open disclosure.
• Resolving discovery disputes according to relevance. 
• The cost of not being transparent during your divorce proceedings.
• How your partner can defend themselves if you refuse to disclose what they ask for.
• Why it is important to provide definitions for the documentation you are requesting.
• The implications of using a deposition as a discovery tool instead of an interrogatory.
• How a business evaluator differs from a forensic accountant.
• Which episodes to listen to for further information on the topic of discovery.

What is Divorce at Altitude?

Ryan Kalamaya and Amy Goscha provide tips and recommendations on issues related to divorce, separation, and co-parenting in Colorado. Ryan and Amy are the founding partners of an innovative and ambitious law firm, Kalamaya | Goscha, that pushes the boundaries to discover new frontiers in family law, personal injuries, and criminal defense in Colorado.

To subscribe to Divorce at Altitude, click here and select your favorite podcast player. To subscribe to Kalamaya | Goscha's YouTube channel where many of the episodes will be posted as videos, click here. If you have additional questions or would like to speak to one of our attorneys, give us a call at 970-429-5784 or email us at info@kalamaya.law.

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DISCLAIMER: THE COMMENTARY AND OPINIONS ON THIS PODCAST IS FOR ENTERTAINMENT AND INFORMATIONAL PURPOSES AND NOT FOR THE PURPOSE OF PROVIDING LEGAL ADVICE. CONTACT AN ATTORNEY IN YOUR STATE OR AREA TO OBTAIN LEGAL ADVICE ON ANY OF THESE ISSUES.

Transcript

Ryan Kalamaya (3s):
Hey everyone. I'm Ryan Kalamaya.

Amy Goscha (6s):
And I'm Amy Goscha.

Ryan Kalamaya (8s):
Welcome to the Divorce at Altitude A Podcast on Colorado Family Law.

Amy Goscha (13s):
Divorce is not easy. It really sucks. Trust me I. Know. Besides being an experienced divorce attorney, I'm also a Divorce client.

Ryan Kalamaya (20s):
Whether, you are someone considering divorce or a fellow family law attorney. Listen in for weekly tips and insight into topics related to Divorce Co Parenting and Separation in Colorado. Welcome back to another episode of Divorce at Altitude. This week I am joined by my esteemed partner, Amy. How are you?

Amy Goscha (46s):
Great, how are you doing Ryan?

Ryan Kalamaya (48s):
I'm good. As we're recording this, the leaves are turning in the high country And. I've gone on some exploratory hikes with my kids and have discovered some cool things about my backyard. And I. Use the word Discovery because that is what we're talking about today. So for those that don't know Discovery, what does that mean in a Divorce?

Amy Goscha (1m 14s):
So we have a client who comes in And. They say, well, I don't know much about the finances. I'm really concerned that my soon to be ex spouse is spending money. Like I need a forensic person to go and find what's going on. So in Divorce cases, in Colorado, the court starts from the position that every party going through a Divorce deserves full and fair disclosure. So that's kind of the overarching concept. And the reason for that is that you And I as attorneys have to figure out what assets there are, what debts there are, so we know how things needed to be divided and also how things need to get paid for. So when we're talking about Discovery, we're talking about Discovery, what assets there are, what debts there are, and then what incomes there are.

Amy Goscha (2m 1s):
So we can divide property and look at spa maintenance and child support.

Ryan Kalamaya (2m 5s):
And it may extend into even topics that are in addition to just money. So if the kids are involved and a parent has a substance abuse problem or a mental condition, we can get medical records and really dig into those sorts of issues. And one thing we can ask for bank statements to show how much they've gone to the liquor store or those sorts of things. And you know, an episode that we have coming up is about cryptocurrency and Anthony Garcia, our guest in that case or that episode, we talk about what things we could ask for in cryptocurrency. But Amy for the non-lawyers or even for Divorce lawyers, what is the rule that you And I probably reference half dozen times if not a dozen times per day.

Amy Goscha (2m 55s):
It is Colorado rule of civil procedure 16.2.

Ryan Kalamaya (2m 59s):
And so what, beyond just the duty of full transparency and and candor. So does that mean that under the rules of civil procedure and Colorado law that I as an attorney for Eric Wolf could ask Melanie to produce each and every receipt that she has ever accumulated in the marriage? What, what are the kind of confines and and what are the ways, the mechanisms that we can ask for information?

Amy Goscha (3m 25s):
Yeah, I'm glad that you brought that up because when you're looking at Discovery, you also have to look at how broad it is. And one thing that I think is a misnomer is that people think just because it might not be relevant, it doesn't mean that it's not necessarily discoverable. So that's why people hire attorneys like us to really that through that. But kind of the first process that we have is under 16.2 there's this initial disclosure requirement. So it's kind of like touching the iceberg. It's like let's get the most recent documents as what are the expenses, what's the balances in certain bank accounts, what assets do we have? What's the balance on the mortgage? And then once we get those documents, you And I as attorneys and the parties know kind of what we're dealing with and then we can ask for further documentation through what's called the formal Discovery process.

Ryan Kalamaya (4m 14s):
Right. And the initial phase is I shouldn't have to ask Melanie to produce a copy of the bank statement. And so there's these general rules and Amy, I'm sure I've got clients right now that are asking me, Hey what what's gonna happen? And in particular one of the things we see in initial consultations is, well Ryan, if I hire you, what's gonna happen? And, I have to give them the lawyerly kind of answer of, well it depends and it's hard to have a discussion unless all the cards are out on the table so to speak. And those initial disclosures are really produced by either side. So, but what if those initial disclosures, the swarm financial statement, the bank statement, the tax returns, whether that doesn't answer all of the questions, the other side has, what does Eric or Melanie Wolf, what are the options at that point?

Amy Goscha (5m 2s):
So at that point in Colorado we have a process of formal Discovery where you can issue certain requests for questions which are interrogatories or you can issue a request for documents, which is a request for production of documents. So we have a certain process to kind of do more of a deeper dive in Colorado. And so what that process looks like is we have a certain approved questions and requests in Colorado, those are called patterned interrogatories or pattern request for production. And then we can also ask non patterned which are questions that we come up with to be specifically tailored to the case or information that we need.

Ryan Kalamaya (5m 41s):
Now you say specifically tailored and that goes back to my earlier observation, can we ask Melanie for every receipt And there's a really important case in your marriage of GarCo, right? That kind provides guidance for trial courts. And can you tell us a little bit about GOCO and the importance of what happened in that case as it relates to Discovery in Divorce?

Amy Goscha (6m 5s):
Yeah, so what happened in that case, if I remember correctly, is that it essentially gave husband just like an open heyday or I guess it was wife on Discovery of documents for husbands. So essentially what the court set out was factors that you need to look at to figure out what exact information is actually relevant here. You just don't get to have every single piece of document. Frankly it's overly burdensome on the party who's having to produce it. And also if you have an attorney like that gets really expensive. So we want there to be open disclosure, the courts do so everyone gets the information that they need, but there needs to be some parameters around that.

Amy Goscha (6m 47s):
So it's not just sending someone down a rabbit hole and causing a bunch of fees.

Ryan Kalamaya (6m 52s):
Right. Well there was these revisions to the Discovery rule in general Rule 26 that really took into consideration proportionality because what we see in civil litigation, And I used to do a fair amount of civil litigation and there was this open question is, is this proportionality test applicable in divorces? And really the main, I think takeaway for Gram is that if you have a 10 million business that is at issue in a Divorce, you're gonna be able to ask and justify requests that go deeper into the bank accounts, the books, the employees, you can ask for more Discovery and depositions is one tactic or mechanism that is available.

Ryan Kalamaya (7m 40s):
But that's gonna be different than if you have a business that is a hundred thousand dollars. And really the court has to take into consideration what are the costs involved and what is that really at an issue. And so yesterday Amy, I had depositions And, we did it via Zoom and that is something that is new that we've talked about before on the podcast. But really the core is going to look at the cost savings and they're kind of generally accepted with Zoom. I mean my client was in a state outside of Colorado and those are the sorts of efficiencies that we're starting to see where the court is really gonna weigh the proportionate cost versus what is at issue.

Ryan Kalamaya (8m 27s):
And you'd said before we were recording that you have a case where another attorney served in excess of 50 requests for production. And so we talked about whether or not a judge would approve that cuz there's limits, right? And so can you talk to me a little bit about ways that we can work through disputes on the scope of Discovery

Amy Goscha (8m 49s):
And just to give everyone kind of a baseline what Ryan, And I are talking about in Colorado, essentially the limit per the rule is you can do 10 requests and there's also case law that talks about, you know, you can't just one request that has 50 subparts, you know, so there's ways to where if you have a request within a request, it's actually counted as two requests. And so what the rule says is that if you want to issue requests to another party above and beyond the 10 non pattern, then you have to seek authorization from the court to be able to do that. And like as Ryan said, there's certain cases that are pretty complicated and you definitely are gonna need to go above and beyond those 10 requests.

Amy Goscha (9m 30s):
But essentially what we're looking at is, for instance, another thing that you have to do is like when you have trust involved, if it's a revocable trust, lawyers have to look at well is it even property, is it not? And then you have to look at, well is it really relevant to disclose? So there are those kind of Discovery disputes, you know like that was an example of something that I recently had a discussion with a joint expert in opposing counsel because the request was specifically asking about the client's parents' funding related to something that frankly in my mind was not even relevant because it's related to a revocable trust that is not property.

Amy Goscha (10m 11s):
So you know, that's how complicated it can get. But at the same time, if you have those complicated situations, you still need to get the information that you need. So it's a balance between cost, is it relevant s in existence? So those are kind of the disputes that we deal with a lot of times.

Ryan Kalamaya (10m 31s):
Yeah. And related topics to that, you know, in a trust that frequently comes up a party Eric Wolf, if he's a beneficiary of a trust, he may not have control over the documents of the trust And, we talked about that with Kim Willoughby that oftentimes Eric he wouldn't have the ability to produce documents cuz it really is, I think it's important for people to know that the request for production of documents, it's whatever is in there custody control. So if they are in control of their bank, Wells Fargo, they can go and say, hey Wells Fargo, give me the statements and you can do that. But if Eric goes to the trustee And, we frequently Amy, we see this all the time with trust where the parents or the grandparents or a third party saying, I'm not gonna give that to you And.

Ryan Kalamaya (11m 17s):
We have to have a conversation that it's gonna cost more. They're entitled to this information. And so they could serve a subpoena, a party could serve a subpoena on a bank and the trustee. But then also we have these protection orders that we will deal with where if Eric is concerned about giving financial information to Melanie on his business or a trust and he doesn't want that information to go out, it's easier for Eric to go to the trustee and say, or me as Eric's attorney to go to the trustee and say, you guys gotta give this evidence because I, I understand that you don't think it's property, you think it's bulletproof.

Ryan Kalamaya (11m 57s):
I've heard it a hundred times. We have to be transparent, we have to be candid with the other side. And but here's the thing, I can ensure that they are gonna keep, they being Melanie and her attorney are gonna keep that information confidential. So we'll have protection orders and they're pretty standard in high asset divorces that we deal with. And so Amy, are there any other things that people might wanna know about those topics?

Amy Goscha (12m 25s):
Yeah, I think when like resolving disputes, I think we're at least you And, I always start is we have confidentiality agreement that we try to negotiate with other side on the terms And, we can file that with the court and it's an order of the court And, we try to do that first before filing a motion for protection, protection order, you know, regarding those documents. But sometimes you do if you can't agree on those terms. The second thing I'll say is that from the court's perspective, dockets are really busy. Like the last thing that judges like to deal with are Discovery disputes, right? So I've had cases in the past where a judge will actually request for there to be what's called a special master just to deal with the Discovery disputes.

Amy Goscha (13m 9s):
I've even had judges also where if my client or the other party can't get the certain documentation, courts sometimes get frustrated And they still just order the party to produce the documents. So it's in everyone's interest to try to figure out what's needed and to resolve those disputes. But it does get complicated. So when it gets complicated and you can't agree, you can file a motion for a protective order, you can ask for a status conference with the court to deal with those issues or the court can have someone else appointed such as a special master to deal with those issues.

Ryan Kalamaya (13m 43s):
I think it's helpful for people to know, I mean Discovery is where really cases are are made and it's a a truth seeking process but it can be really expensive and if people don't, if they're not transparent judges, they don't like it and it can cost a lot of money if there's not that trust. And the Discovery disputes can result in just ongoing conflict. If there's again a lack of trust and people if they don't disclose what they need to, the other party can file motion to compel under rule 37, they can get attorneys fees and costs related to a lack of disclosure and Amy, you know there's case law that the judge can make an adverse finding against a party and there's a case where a husband refused to turn over tax returns, the court felt like he was purposefully hiding and said I'm gonna infer a significant income because you're not being fully transparent.

Ryan Kalamaya (14m 41s):
And judges just don't like that. They really have little patience for it. And generally speaking, as much as we kind of make fun of other attorneys that ask for 50 some requests for production, the counter to that is that people that don't disclose anything, that also is negatively frowned upon. So can you give listeners Amy, turning to non pattern requests for production or interrogatories, can you talk about maybe some examples of things for like business interests or stock options or relocation that we frequently will deal with that aren't in that pattern? Like give us the bank statements for the last two, three years?

Amy Goscha (15m 24s):
Yeah, so I mean one thing that I look for even just with tax returns is sometimes I wanna get from the cpa, the the actual working papers, you know, I want those or they might give us a balance sheet or the p and l, but I might want access to the full general ledger to kinda look at those entries. Some other things that we ask for related to a business could be just beside like essentially communications between, you know, if you're trying to figure out is your client really a minority like interest or do they like actually have more control than it says on paper? So sometimes we have to actually get into the communications and how the partners work together.

Amy Goscha (16m 7s):
And that's another issue is if a party has a partner or a few partners, you know, the partners are saying we're not giving you this information. So it can be challenging when you're looking at stock options, you're gonna want the plan document, the vesting schedules, those types of things. Because with stock options, when you're figuring out whether or not something, just because it's not vested doesn't necessarily mean that it's not marital. You're having to look at well are those options, are they for future services? Are they for current? So there's just a lot that goes into those things. So within the pattern requests there's just additional things that might be relevant that we might need to ask for.

Amy Goscha (16m 50s):
Another thing related to parenting issues can be communications between the child. Like if the child has a phone, like what are the communications going on? What apps does the child have access to? Like I had a case where Snapchat was like a huge issue and it would disappear within a certain period of time. And how do you get that information? And I know we're gonna talk about ESI later, but those are some of the issues that come to mind. How about you?

Ryan Kalamaya (17m 21s):
Yeah, I mean for me the ESI is where I think people underestimate the amount of information that's out there. And, I think it's critical cuz a lot of these Divorce lawyers that we are working against, they're really experienced. They've dealt with high asset divorces or relocations or whatever it is, but they also don't, I think it's a mix of knowing the current trends in technology because Amy, you, And I our firm. I mean we are, we're business owners. We run our firm And, we deal with the balance sheet. And so I know how businesses run And. We communicate over Microsoft teams. We used to use Slack and if you don't know how businesses are being operated now that QuickBooks are zero or your bookkeeping service is in the cloud, it's hard to really track if someone's hiding something or you don't know what to ask for.

Ryan Kalamaya (18m 15s):
And communicating about parenting issues and what the things that may be out there and just knowing how to ask for those I think is a critical skill that a lot of lawyers are are overlooking And, I think advising our clients, Hey, just because you sent a text message or just because you sent something via Snapchat doesn't mean that it is not admissible or it's not going to be disclosed. And so one thing that we do that I think a lot of people just don't understand in our industry is that litigation hold letter and advising our clients, Hey, don't post stuff on social media and if you have, don't delete it.

Amy Goscha (18m 57s):
Right, exactly. And the other thing that I think is important is that when you issue formal Discovery, there's definitions as to what needs to be disclosed. And I think one thing that our firm does really well is we actually include the definitions that are important, especially for those non pattern questions such as, you know, give us the native documents or here's what I'm looking for when I'm talking about the trust documents. So I think especially really to attorneys drafting these types of requests to really look at the definitions to make sure that what you're asking for, you're also putting in there what definitions you mean as far as the documents you're requesting?

Ryan Kalamaya (19m 36s):
Well, to close things out, I think there's a couple things that people can kind of take away from this. And that is that there are different ways that we can ask for information as just a general observation. I don't know about you Amy, but we've never really talked about it. I find interrogatories to be not particularly helpful because the other side has 35 days to come up with kind of an evasive answer. And if these debates, I mean we're heading into election season, you give a politician a question, they're never gonna really answer it directly. You give a Divorce lawyer 35 days to construct an evasive answer, they'll take the opportunity to do that.

Ryan Kalamaya (20m 18s):
Documents in my mind are way more important. Like I find a lot of information from emails, from balance sheets, from bank statements that they really are powerful. So that's just my observation. I also find, like I said yesterday, I was in depositions and it was incredibly efficient. I think oftentimes people overlook and they're scared of doing depositions, but you can find a lot of helpful information and get a case settled. And so people just need to take those factors into consideration when they want to move forward. And also when they think that they're hiding something and that they're gonna be able to continue to do so, are things that they just need to be mindful of.

Ryan Kalamaya (21m 4s):
But anything in closing for you, Amy? On the topic of Discovery?

Amy Goscha (21m 8s):
Yeah, I know, we haven't talked about that, but I agree with you And. I like using depositions as like a Discovery tool. Of course I don't use them in every single case, but it helps me get the information that I need. And I agree that it's much more effective than issuing the questions than the interrogatories. So with that, there's a lot of issues to think about. And, I think the other thing is that when you hire like a business evaluator, a lot of people think that they're a forensic accountant and they're not. Like they have to kind of take the documents at face value. So that's just another thing. So there's, it's very different to have a business evaluator versus like a forensic accountant. So just a few things to keep in mind.

Ryan Kalamaya (21m 50s):
Yeah, and if people to conclude if the people are interested in more information, they should check out. We've had relevant other episodes that would be episode 13, Discovery and Divorce, episode 14, the benefits of E-Discovery for Divorce Lawyers, episode 16, which is E-Discovery best practices, and then episode 1 0 1, which is non-disclosure of Assets in Discovery. But until next time, thanks for joining us on Divorce at Altitude. Hey everyone, this is Ryan again. Thank you for joining us on Divorce at Altitude. If you found our tips, insight, or discussion helpful, please tell a friend about this podcast. For show notes, additional resources or links mentioned on today's episode, visit Divorce at Altitude dot com.

Ryan Kalamaya (22m 36s):
Follow us on Apple Podcasts, Spotify, or wherever you listen in. Many of our episodes are also posted on YouTube. You can also find Amy and me at Kalamaya.law or 970-315-2365. That's K A L A M A Y A.law.