In re Marriage of Nassimi

Summary

Husband sold the community business IEI during the marriage for $14 million up front. After the 2009 dissolution judgment, the buyer sued to rescind over FCC noncompliance, and Husband settled by paying $1 million of his own funds plus the $1 million escrow. The court held the debt was community because the contract was made during marriage and the community took the benefit: about $12 million in proceeds, mostly into the Sea View home, with $1.5 million split at separation. The judgment's escrow and earn-out provisions did not cover a rescission suit, so Wife owes half of the $1 million Husband paid, but his claim for litigation fees failed because he could not allocate block-billed entries. Reversed in part, affirmed in part, and the prevailing-party fee award was reversed and remanded.

What it means for the financial analysis

On characterization, the dates of the contract and the destination of the sale proceeds carried the analysis, so document where the money went. On fee reimbursement, the claimant had to allocate billing by claim and lost on block-billed entries, a self-made percentage formula, and a lawyer's unexplained 50 to 75 percent estimate. An accountant supporting a claim like this should build the allocation entry by entry from the invoices and separate out work on counterclaims or work adverse to the other spouse.

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