Family Law Corner: Caught in a Trap: Presley’s Fiduciary Dilemma

After ten years of marriage, Lisa Marie Presley is all shook up after discovering that her fourth husband, Michael Lockwood, may have been mismanaging her money.

Lockwood, a professional guitarist and musical producer for artists such as Carly Simon and Fiona Apple, is accused of charging $109,000 to an American Express card in Presley’s name. American Express then filed suit against Presley for the unpaid balance, thereby drawing her attention to her husband’s spending habits. Presley is now contending that Lockwood took advantage of her financially—she allegedly has a $300 million dollar fortune—and mismanaged her money throughout their marriage. To complicate matters, it is reported that Presley and Lockwood have a postnuptial agreement.

Presley’s divorce lawyer is asserting that Lockwood breached his fiduciary duty to Presley pursuant toFamily Code Section 721(b), which provides that spouses are subject to the “general rules governing fiduciary relationships that control the actions of persons occupying confidential relations with each other . . . [t]his confidential relationship imposes a duty of the highest good faith and fair dealing on each spouse, and neither shall take any unfair advantage of the other.”

California courts have held such breaches to include:
  • A husband’s failure to make mortgage payments on a community property house when he had the ability to do. In re Marriage of Kochan (2011] 193 Cal.App.4th 420);
  • A husband’s failure to keep a promise to add wife’s name to title. In re Marriage of Fossum (2011) 192 Cal.App.4th 336);
  • A wife’s failure to disclose voluntarily the status of an IRA account from which wife was making withdrawals with significant tax consequences. In re Marriage of Walker (2006) 138 Cal.App.4th 1408).
  • A husband making an improvident loan from a frozen account over which he controlled after separation. In re Marriage of Quay (1993) 18 Cal.App.4th 961.

It is possible that Presley and Lockwood waived their fiduciary duty to each other in their postnuptial agreement, especially if they agreed that all income and assets were to remain separate property, which is likely the case. “Suspicious minds” might predict that Presley may challenge that waiver, especially since the validity of such waivers made during a marriage is not settled in the law. See In Marriage of Burkle[Burkle II] (2006) 139 Cal.App.4th 712 (appellate court declined to decide whether a waiver of fiduciary duty in a postnuptial agreement was valid).

After four divorces, Presley may decide marriage is simply not worth the trouble, since it appears she can’t help falling in love with all the wrong guys.