Lawyers met in court on Wednesday after the actor's ex-wife Brooke Mueller - who is currently being treated for drug problems at the Betty Ford clinic - requested her four-year-old twins Bob and Max be placed in the care of her brother, but the judge "flatly denied" her request.
A source said: "The judge flatly denied Brooke' request to to have Denise stripped of temporary custody, and placed in the care of her brother in Orange County. There was absolutely no reason that could justify the move, which would only uproot the twins yet again."
Brooke - who would have retained the $55,000-a-month child support she receives from ex-husband Charlie if her brother was caring for the boys - had alleged Denise had only agreed to take on the children for her own financial benefit, but the actress insisted she isn't interested in money.
The source added to RadarOnline.com: "Brooke's claims that Denise was only taking care of the boys for financial gain fell flat because the actress signed a sworn declaration that she had refused money from Charlie. Denise's declaration also went on to say that she didn't want any money ever for her care of the boys."
Brooke was placed under an involuntary psychiatric hold amid allegations her drug use had resulted in an "unsafe environment" being created for the kids.
As well as caring for the twins, Denise, 42, also has daughters Sam, nine, and Lola, seven, from her marriage to Charlie, and adopted little girl Eloise, 23 months.