CALIFORNIA ATTORNEY'S FEES

Family Law: Ex-Husband’s Request For Section 271 Sanctions Correctly Denied Under Abuse Of Discretion Standard

Ex-Husband Was Contentious And Ex-Wife Had Already Contributed Significant Moneys To Level The Playing Field.

            With respect to Family Code section 271 sanctions, equities often determine who wins or loses on these requests.  Marriage of Madigan, Case No. G052559 (4^th Dist., Div. 3 Sept. 20, 2017) (unpublished) illustrates this well, a 3-0 panel decision authored by Acting Presiding Justice Moore.

            In this one, ex-wife certainly had better financial resources than ex-husband, based on a thirteen marriage producing three minor children.  However, both sides collectively spent $600,000 in divorce attorney’s fees, with ex-wife previously contributing $90,500 toward some of ex-husband’s attorney’s fees.  Eventually, the family law judge denied ex-husband’s and ex-wife’s requests for sanctions under Family Code section 271.  Ex-wife’s conduct did not meet the sanctions standard; while ex-husband’s conduct did, his financial condition did not allow for an award (given that financial conditions are considered in a 271 sanctions award).  Ex-husband appealed the sanctions denial.

            The 4/3 DCA affirmed.  Even though ex-husband had much less personal resources, his conduct was found to have shown “inflexibility and confrontation”, at odds with granting a 271 sanctions award in his favor.  One further reason supporting a sanctions denial was ex-wife’s earlier significant contribution to his fees (with the trial judge believing a big chunk of this being enough to resolve the entire dissolution proceeding if handled correctly).  

Family Law: Failure To Award Attorney’s Fees For Breach Of Fiduciary Duty Determination Under Family Code Section 1101(g) Required Remand

Wife Had Been Found To Violate Family Law Restraining Order By Selling Sale Of Assets After Separatio

            In Marriage of Bracken and Gibson, Case No. A145337 (1^st Dist., Div. 4 Sept. 7, 2017) (unpublished), wife was found to violate the family law restraining order which occurs when a dissolution petition is served by selling certain stock options after separation from husband and without court consent.  The family law judge awarded husband $1,353 for this breach of fiduciary duty, but did not award attorney’s fees associated with the recovery of this additional amount.   That was error under Family Code section 1101(g), because the court lacks discretion and must award an appropriate amount of fees in such a context.  The remedy was a remand for the family court to fix the fees for this breach of fiduciary duty.

Family Law: Wife’s “Self Help” Withdrawal Of $7.1 Million From Joint Bank Accounts Justified Family Code Section 271 Sanctions Of $50,000

Wife Was Provided Adequate Notice Of Sanctions Request, Even Though Section 271 Provides No Specificity On Type/Timing Of Notice

                This post on Youssefyeh v. Melamed, Case No. B269371 (2d Dist., Div. 3 July 27, 2017) (unpublished) falls in the category that “you cannot make this stuff up.”

                Here, wife used “self help” by withdrawing $7.1 million from joint bank accounts based on her fear that she would be left without financial resources, even though this withdrawal was in violation of the automatic temporary restraining order contained in the family law summons and a domestic violence restraining order obtained by husband.  Husband gave notice of seeking Family Code section 271 sanctions in ex parte papers submitted in late September 2015, which request was set for a hearing later in November 2015—a hearing at which wife appeared and argued against sanctions.  The trial judge ordered 271 sanctions of $50,000 against wife, payable in 45 days.

                Wife’s appeal was unsuccessful.  Although section 271 does not specify the form of notice nor the amount of notice that must be provided, wife certainly had adequate notice of the sanctions request and appeared to challenge it—due process was satisfied.  With respect to the merits of the award, the “self help” by wife did not impress the appellate court either, with wife conceding her actions caused husband to incur not insignificant litigation costs.  Section 271 sanctions were justified under these circumstances.

Family Law: Section 271 Sanctions Not Awardable To Non-Parties To Family Law Litigation, Such As An Attorney For A Party

 

$88,000 Sanctions Award To A Party’s Former Attorney Reversed On Appeal.

     In Webb v. Webb, Case No. B269311 (2d Dist., Div. 8 June 13, 2017) (published), the Second District, Division 8 held that Family Code section 271 sanctions only applies to parties in a family law litigation case, not allowing for awards to non-parties—reversing an $88,000 sanctions award to a party’s former counsel (a non-party).

Family Law: $250,000 271 Sanction Affirmed In Contentious Divorce Case Between Two High Profile Attorneys

 

Abuse Of Discretion Standard Not Overcome By Appealing Ex-Wife.

     Marriage of Gregora and Feldman, Case No. B269587 (2d Dist., Div. 8 May 8, 2017) (unpublished) was a high profile divorce case involving Los Angeles attorneys, where ex-wife lost a key breach of fiduciary claim, prompting the trial court to impose a sanction against her to the tune of $250,000 under Family Code section 271 (the sanctions was an award of partial attorney’s fees incurred by ex-husband). Ex-wife appealed, but to no avail. The appellate court observed that the sanctions award was no abuse of discretion given that (1) ex-wife issued 450 subpoenas on third parties yielding over 100,000 pages of documents; (2) she deposed ex-husband’s ex-wife, several partners in his firm, and numerous accountants; (3) ex-wife spent $3.6 million on the case and ex-husband spent $2.1 million; and (3) ex-wife lost on the breach of fiduciary claim.

Family Law: $5,000 Needs-Based Fee Award Reversed For Failure To Consider Proper Factors

 

Bad Litigation Tactics Alone Will Not Support 2030/2032 Award.

 

    Although the $5,000 fee award to husband may seem paltry based on the needs-based anchors of Family Code section 2030/2032, it was reversed in Marriage of Overstreet, Case No. B271522 (2d Dist., Div. 1 Mar. 28, 2017) (unpublished). The reason is that the family law judge did not consider all of the 2030/2032 factors, focusing myopically only on the litigation tactics of the other side. This alone will not justify such a needs-based fee award.

Family Law/Reasonableness Of Fees: Trial Judge Awarding Only $15,000 In Fees And Costs Based On Requested $77,067.50 In Fees And $17,459.77 In Costs Was No Abuse Of Discretion

 

Deferential Standard Of Review Not Hurdled In This One.

    In Zauner v. Defterios, Case No. B271922 (2d Dist., Div. 6 Mar. 21, 2017) (unpublished), appellant sought needs-based fees in a child custody modification proceeding. She requested $77,067.50 in fees and $17,459.77 in costs, but was only awarded $10,000 in fees and $5,000 in costs.

    Her appeal of the award did not succeed.

    The trial judge found that appellant was seeking duplicative recovery of fees already paid and for billed services which were inconsistent with requested amounts. Although she argued that failure to award 100% of the requested needs-based fees was an abuse of discretion, the appellate court swatted away that argument by noting that reasonableness is still a consideration in this area of fee recovery. (Alan S. v. Superior Court, 172 Cal.App.4^th 238, 255 (2009).) Affirmed based on the failure to show an abuse of discretion.

Family Law: $412,485 Needs Based Fee Award In Wife’s Favor Affirmed, But $318,510 Fiduciary Breach Fee Award Remanded In Light Of Partial Reversal In Husband’s Favor

 

Needs Based Award Was Less Than 30% Of Wife's Fee Request Under Section 2030.

 

    In Marriage of Schleich, Case Nos. H039870/H041234 (6^th Dist. Feb. 8, 2017) (published), ex-husband suffered two adverse awards which were favorable to his ex-wife: (1) a needs-based fee award under Family Code section 2030 to the tune of $412,485 (ex-wife had requested over $1.543 million); and (2) a sanctions award under Family Code sections 1101(g) and 2107(c) for fiduciary duty breaches relating to separate and community assets to the tune of $318,510, prompting an appeal by ex-husband.

 

    The needs-based award was affirmed, because husband had the ability to pay and the lower court awarded less than 30% of ex-wife's requested fees.

 

    However, after determining that separate property and pre-separation community income fiduciary breaches could not give rise to sanctions under Family Code section 1101 and reversing 4 of 16 listed fiduciary duty violations, the Sixth District determined that section 1101(g), a mandatory fee statute, could not support a fee award as far as the 4 reversed breaches were concerned. However, section 2107(c) was an independent basis for sanctions, but the appellate court remanded for a re-examination of fees under this statutory provision given the reversal on the four alleged violations.

Family Law: Interesting Appellate Decision Involving Senior Husband And Wife Results In A Mixed Bag On Whether Attorney’s Fees And Sanctions Owed, And Against What Assets

 

Just Goes To Show You That Dissolutions Proceedings Have A Lot Of Legal And Equitable Issues, No Matter When You Get A Divorce At Any Stage Of Life.

     Greene County, Georgia.  Old couple who receive old-age pension assistance.  Fall, 1941.  Jack Delano, photographer.  Library of Congress.

     Murdock v. Murdock, Case No. B259694 (2d Dist., Div. 3 Jan. 26, 2017) (unpublished) is an interesting unpublished decision based on the span of germane dissolution issues, especially considering the case involved a divorce between a husband and wife who were California State University educators apparently parting ways in their 70’s. The case did involve a CalPERS retirement account issue given the parties’ ages. Maybe some of you readers are too young for this case, but some of us are not (other readers and blog contributors—blog contributors getting there).

     What happened here is that ex-husband was hit with $17,500 for breach of fiduciary duty that he impaired community property interests, leading to an award of expenses under Family Code section 1101(a). Ex-wife was also awarded “needs based” fees to the tune of $35,000. Finally, ex-husband suffered a Family Code section 271 sanctions award, payable even from his exempt retirement accounts.

     The appellate court reversed the community property impairment award, finding insufficient evidence supported it given that husband was dealing with separate property assets. The other two awards were affirmed, the needs-based award because the husband had superior cash resources but the 271 sanctions were improperly ordered to be paid out of husband’s exempt accounts.

Family Law: Needs-Based Fee Award Can Be Based On Age Of Needy Party

 

Fact That Needy Party Is Retired Can Be Considered In Needs-Based Analysis.

 

    In Marriage of McLain, Case No. E062884 (4^th Dist., Div. 2 Jan. 6, 2017) (published), $5,500 in needs-based Family Code section 2030/2032 attorney's fees were awarded in favor of a wife based on the fact she was 65 of age and had retired. The appellate court affirmed, determining this was an appropriate factor to consider.

Family Law: $680,000 Component Of Section 271 $767,781.23 Sanctions Award Reversed As A Matter Of Law

 

This Component Was Not Tethered To Fees And Costs, So Not Recoverable.

 

    We predict that Marriage of Sagonowky and Kekoa, Case Nos. 142866/A143234 (1^st Dist., Div. 5 Dec. 21, 2016) (partially published; sanctions award discussion published) is going to generate quite a stir in the family law sanctions arena and might be a candidate for California Supreme Court review.

 

    In this one, ex-wife was sanctioned a total of $767,781.23 under Family Code section 271 for driving up the costs of litigation and frustrating settlement efforts, with ex-wife not really arguing on appeal that the "merits" bases for the award were not present. However, on appeal, she did argue that $500,000 for general culpable conduct and $180,000 for causing a reduction in the sales price of real property awarded to ex-husband were not properly awardable because they were not tethered to "attorney's fees and costs" recovery as limited under section 271.

 

    The 1/5 DCA agreed, reversing the $680,000 component as a matter of law. Section 271 was clear in its limitations such that the two pieces of the award were infirm because they were not tethered to fees and costs. In doing so, it distinguished cases such as Corona, Quay, Feldman, and Falcone and Fyke in the process, cases frequently cited as broadly allowing for imposition of section 271 sanctions.

Family Law: $210,000 Section 271 Sanctions Award Upheld On Appeal

 

Inadequate Appellate Record Required Affirmance – “A Little Learning Is A Dangerous Thing”.¹

   Marriage of Hettinga & Loumena, Case No. H041589 (6th Dist. Nov. 22, 2016) (unpublished) shows the dangers of undertaking an appeal without knowing the nuances of appellate practice.  In this one, wife—who previously had been sanctioned $100,000 and declared a vexatious litigant—got sanctioned against for $210,000 under Family Code section 271.  Although she appealed, the award was affirmed because an inadequate record was presented before the reviewing court:  incomplete sanction motion paperwork was presented and no record citations to hearing transcripts were included.  Ouch!
______________________________

1 _{“A little learning is a dangerous thing;
Drink deep, or taste not the Pierian spring.”  -- Alexander Pope, Part II of An Essay on Criticism.  Often misquoted as, “a little knowledge is a dangerous thing.”}

Family Law: Lower Court’s Award Under Needs-Based Statute Reversed Where Fees Were Requested Under DVPA Prevailing Party Fee Statutory Provision.

 

$72,660 Fee Award Against Husband Reversed On Appeal.

    In Saldana v. Noh, Case No. A143491 (1st Dist., Div. 2 Nov. 14, 2016) (unpublished), wife moved to recover fees against husband under Family Code section 6344, which allows a prevailing party in a Domestic Violence Prevention Act (DVPA) proceeding to recoup fees.  However, the lower court awarded $72,660 to wife instead under Family Code sections 2030/2032 “needs based” statutes.  The fee award against husband was reversed on appeal.

    Under the circumstances, the fee award was an abuse of discretion.  Although financial resources have to be considered under both statutes, the DVPA statute requires a prevailing party determination and an award of fees in a DVPA proceeding—different elements than those considered in 2030/2032 needs-based awards.  These differences required a reversal and remand to gauge the situation under DVPA. 

Family Law: Trial Judge’s Fixation On Domestic Violence Factor, To The Exclusion Of Other Economic Factors, Required Reversal Of Needs-Based Fee Request By Husband

 

271 Sanctions Award Also Reversed, But Child Support Enforcement/DVRO Fees Against Husband Were Sustained On Appeal.

    Just to show you how appellate courts “balance the equities,” husband won some and lost some in a challenge to a denial of a Family Code section 2030 needs-based fees award, a grant of section 271 sanctions against him, and a grant of child support [section enforcement [section 3692]/domestic violence restraining order (DVRO) [section 6344(b)] fees in favor of wife.

    In Marriage of Locatelli, Case No. B267653 (2d Dist., Div. 1 Oct. 31, 2016) (unpublished), the trial judge (i) denied needs-based fees awards sought by both husband and wife, (ii) granted section 271 sanctions against husband, and (iii) granted fees to wife for successful efforts in child support enforcement and DVRO efforts against husband.

    Husband did well to appeal, but the (iii) grant of fees to wife held up on appeal, with the determinations upon review of (i) and (ii) leading to the affirmance of (iii).

    The problem with denying needs-based fees to husband was that the record showed a clear disparity in financial resources:  wife had $10,000 in gross monthly income compared to unemployed husband receiving $450/week in unemployment benefits; wife owned a property with $500,000 in equity versus husband having a property worth $100,000 (which he bought with joint IRA account proceeds) eventually transferred to his mother.  However, the trial judge myopically focused in the appellate court’s opinion upon the fact husband had a domestic violence black-mark, but singularly weighted this factor without consideration of other factors showing economic disparity.  The 271 sanctions grant against husband was also error even though he depleted the IRA account to buy the $100,000 property given the other extenuating adverse financial factors at play.

    However, the balance was restored on the child support enforcement and DVRO fee awards.  Those totaled about $30,000, with husband able to pay them given his depletion of the IRA accounts which were not weighted in the reversal of the other awards.

Family Law: Surgeon Doctor Husband Properly Assessed With Needs-Based Fees Awarded To Stay At Home Wife

Above:  Surgeon operating on wounded prisoner.  c1903.  Library of Congress.

$400 Hourly Rate Reasonable For Divorce Attorney In L.A. Case.

    Ex-husband, an orthopedic surgeon who lost his job but became reemployed, was ordered to pay $15,000 in needs-based attorneys fees under Family Code sections 2030/2032 to his ex-wife, who was unemployed and a stay at home mom—one half of her $30,000 fee request. 

    Husband’s appeal of the fee award was unsuccessful in In re Marriage of Price, Case No. B263562 (2d Dist., Div. 6 Oct. 18, 2016) (unpublished).

    The record showed a disparity in income, with husband having money to make an IRA contribution, making various bank deposits, and having imputed income based on medical speaking engagements.  As far as wife’s counsel seeking $400 per hour for disso work, the appellate court did not find this rate shocking at all.

Deadlines/Family Law: New Trial Motion On Postjudgment Attorney’s Fees Denial To Wife Did Not Extend Period To Appeal

 

Wife’s Appeal Of Fee Denial Was Untimely.

    Wife was flummoxed by a lower court’s refusal to award her attorney’s fees, appealing from the denial in Bennett v. Foss, Case Nos. A145656/147009 (1st Dist., Div. 1 Sept. 28, 2016) (unpublished).  Unfortunately for her, the appellate court determined that she untimely appealed such that it lacked jurisdiction to consider the challenge.

    Wife tried to escape the untimeliness of her fee appeal by arguing that it was timely because she filed a valid new trial motion on the postjudgment fee issue, such that the time to appeal was extended.  The 1/1 DCA disagreed.  Based on Mann v. Superior Court, 53 Cal.App.2d 272, 285 (1942), the appellate court determined that a new trial motion will not lie to challenge a ruling on a postjudgment fees issue, with the later state supreme court case of Carney v. Simmonds, 49 Cal.2d 84, 88-91 (1957) not overruling Mann with respect to its application in regards to a postjudgment fee motion.

Allocation, Family Law, Substantiation Of Fees: Ex-Husband Failing To Allocate Between Recoverable And Non-Recoverable Claims During Trial Properly Denied Any Fees

 

Ex-Husband’s Failure To Allocate And Use Of Block Billing Resulted In Real Problems At Trial And Ultimate Denial Of Any Fees Incurred By Husband.

Adding prize winner. Washington D.C. “In a speed and accuracy contest for adding machine operators last night, William A. Offutt of the Washington Loan and Trust Company, was declared winner over a field of 30 contestants. The contest was sponsored by the Washington Chapter, American Institute of Banking.”  January 29, 1937.  Library of Congress.

     Marriage of Nassimi, Case Nos. B259704/B260574 (2d Dist., Div. 4 Sept. 26, 2016) (published) is a case where a prior settlement agreement did not cover the situation of how husband and wife were to pay expenses in a rescission lawsuit involving husband’s community property business, although the settlement did provide that certain expenses relating to earn-out features of the compromise would not be the responsibility of ex-wife.  The appellate court determined that wife should reimburse husband for one-half of the settlement which husband reached with the party suing for rescission, but denied husband any recovery for the fees and costs expended in the rescission lawsuit (affirming the fee denial by the lower court below).

    Reason for the fee denial?  The fundamental flaw was the ex-husband’s failure to meet his burden of establishing the amount of reimbursable fees and costs.  The fee submissions were riddled with block billings and failure to allocate fees to the reimbursable rescissionary efforts versus the non-reimbursable earn-out payment issues and some unsuccessful counterclaims.  This opinion is must reading when it comes to submission of fees during a trial or heavily contested evidentiary hearing, with the takeaways being to not block bill and to allocate fees between tasks—attorneys need to recognize when billing entries need to be broken down specifically between reimbursable and non-reimbursable tasks for purposes of having the lower court be able to award fees to litigants on reimbursable work.

Family Law: Lower Court’s Ruling That Appellate Fees Were Untimely Was Wrong, But Nonprejudicial Under The Circumstances

 

Reason Was Lower Judge Previously Had Denied Needs Based Fees For Other Post-Appeal Work Such That No Different Analysis Would Apply To Appellate Fees Issue.

    Marriage of Elizabeth and Gregory G., Case No. B259276 (2d Dist., Div. 7 Sept. 12, 2016) (unpublished) was a situation where a lower court erroneously determined that a wife’s request for appellate fees was untimely.  The Court of Appeal did confirm, for the edification of all family law practitioners or appellate attorneys, that the California Rules of Court govern motions for attorney’s fees on appeal in family law matters—meaning parties to a family law action have 40 days following the date the appellate court issues the remittitur to request attorney’s fees on appeal.  (In re Marriage of Freeman, 132 Cal.App.4th 1, 9 (2005).)  Even though wife did file her request within the 40-day period, the denial was not prejudicial because the lower court previously had denied a needs-based fee request for different post-appeal fees incurred in the family court and nothing else demonstrated this would not have been the same result on the appellate fees issue.

Family Law: Attorney’s Fees Award To Wife Under Family Code Section 2107(c) Is Upheld On Appeal

 

However, Court Of Appeal Suggests That Family Code Section 2107(d) Is Unconstitutional.

    Marriage of Zellet, Case No. B268640 (2d Dist., Div. 6 Aug. 18, 2016) (unpublished) is a very interesting unpublished decision.  It considered whether an award of attorney’s fees to wife based on a husband’s breach of fiduciary obligations under Family Code section 2107 (failure to fully report income, assets, and liabilities) was sustainable where wife did not file an updated income/expense declaration.  The appellate court said the award was proper.

    The issue centered upon Family Code section 2107(d), which states that only a party in compliance with their own financial disclosures may request that the court impose sanctions (including attorney’s fees) under section 2107(c), a mandatory fee-shifting statute where fiduciary reporting obligations are breached with limited exceptions.  Husband argued the fee award was infirm because wife was noncompliant under subdivision (d) by not providing current financial information.  Section 2107(d) interestingly states that the failure to comply with disclosure statements does not constitute harmless error.  The 2/6 DCA decision found that statutory provisions, like subdivision (d), cannot preempt constitutional requirements such as the one indicating that prejudice must be shown in all cases (in this matter, prejudice from a nondisclosure).  Wife’s failure update financial information was not causally connected, much less prejudicial in impact, to husband’s violation of his fiduciary obligations.  Although not saying subdivision (d) was unconstitutional, the decision pretty much concluded this was the case if its reasoning is followed to its logical end.

Family Law: Wife’s Attorney Was Liable For $6,000 In Discovery Sanctions But $10,000 Sanctions Against Attorney Under Family Law Section 271 Reversed

 

Reason Is That 271 Sanctions Do Not Lie Against An Attorney, Just The Litigant.

     In Marriage of Noble, Case No. H041148 (6^th Dist. Aug. 3, 2016) (unpublished), wife’s attorney challenged a $6,000 discovery sanctions award against her and a separate $10,000 sanctions award against her under Family Code section 271. The appellate court affirmed the $6,000 award, but reversed and remanded with respect to the $10,000 award.

The 271 award has to be reversed because 271 sanctions are only awardable against a party, not an attorney. CCP §§ 128.5 and 128.7 are the proper statutes to sanction attorneys under the circumstances. (Marriage of Daniels, 19 Cal.App.4^th 1102, 1110 (1993).) Because section 271 was the stated ground for the $10,000 sanctions award, the order had to be reversed and remanded with directions that the lower court determined sanctions under applicable, appropriate law.

Family Law: No Statement Of Decision Required For Fees Award And Lower Court Only Needed To Consider Relevant Needs-Based Factors

$28,500 Fee Request By Mother Found Unreasonable, With Lower Court’s Order Of $3,500 Under Family Code Sections 2030/2032 Being Sustained On Appeal.

    Mother, in Marriage of Morcos-Jewgieniew and Jewgieniew, Case No. G050727 (4th Dist., Div. 3 Aug. 1, 2016) (unpublished), requested $28,500 in fees based on “need” under Family Code sections 2030 and 2032, with the family law determining the request was unreasonable and only awarding $3,500 to mother.  This prompted an appeal.
    The result stood, in a 3-0 opinion authored by Justice Thompson. 
    Mother argued that a statement of decision was mandated for the fees award, but the appellate court decided this was not the case—with appellant misreading the 4/3 DCA’s decision in In re Marriage of Shimkus, 244 Cal.App.4th 1262, 1278 (2016) (which applies only to a different provision where a statement of decision, if requested, happens to be required). 
    On the merits of the fee award, the family law judge was only required to consider relevant “needs-based” factors, not all of the ones listed under section 4320 (because some of them relate only to spousal support).  Because the family matter was not complex and rather relatively simple, the lower court did not err in finding the requested fees to be unreasonable in nature and in awarding much less to mother.

Family Law: Failure To Use Updated Financial Information For Husband Leads To Reversal Of Wife’s Fee Request Denial

 

Updated Information Might Show Disparity Existed For “Needs Based” Fee Award.

     In Marriage of Kelley & Nelson, Case No. B266745 (2d Dist., Div. 4 July 22, 2016) (unpublished), wife’s request for “needs based” fees was denied. However, that decision was reversed on appeal because the lower court did not use husband’s updated financial information which included additional assets plus an inheritance. Given that the older, stale information did not have this supplemental data, use of the “fresher” information might present a financial disparity which might lead to a different result in wife’s favor. Back for a re-do.

Family Law: Husband’s Prior Appeal Of Disso Judgment Did Not Prevent Subsequent Needs-Based Award Under Family Code Sections 2030/2032

 

Once Jurisdictional Hurdle Was Surmounted, Record Below Justified Lower Court Award.

    Georgi-Juarez v. Juarez, Case No. G051351 (4th Dist., Div. 3 June 17, 2016) (unpublished) involved husband’s appeal of a $20,000 “needs-based” award to ex-wife under Family Code section 2030/2032 after husband had appealed the dissolution judgment.  The award was affirmed on appeal.

    Husband’s principal challenge was that the appeal of the disso judgment prevented the family law judge from entering a subsequent needs-based fee award in favor of wife.  The appellate court disagreed, finding that the subsequent award was not “embraced” by the prior disso judgment such that it was not stayed during the pendency of the disso judgment appeal.  (In re Marriage of Askmo, 85 Cal.App.4th 1032, 1039 (2000); In re Marriage of Strachon, 77 Cal.App.3d 506, 509 (1978).)  Once this jurisdictional hurdle was surmounted, the fee award was justified based on a record showing there was a disparity in resources such that husband should pay some fees.

    Justice Fybel authored the opinion on behalf of a 3-0 panel.

Family Law: Family Law Judge Did Not Err By Considering Substantial Infusions By Parent In Fashioning Pendente Lite Fee Award Under “Needs Based” Fee Statutes

 

However, Remand Required To See If Husband’s Fee Request Was Overinflated.

    In Marriage of Rubanowitz, Case No. B257782 (2d Dist., Div. 7 June 7, 2016) (unpublished), husband and wife having seven children were enmeshed in a divorce proceeding which had some unusual facts:  (1) husband, who was an attorney, lost a major client so that his income plummeted significantly; and (2) wife’s father provided her over $1 million in money to maintain her lifestyle and fund her dissolution attorney costs.  What maybe isn’t unusual in some dissolution proceedings is that husband had spent about $160,000 in fees and wife had spent $432,772.  The lower court actually ordered wife to pay $140,000 to husband under “needs based” fee statutes of the Family Code so that he could keep litigating in the divorce proceeding.

    The appellate court reversed, but on narrow grounds.  It did find that wife’s father’s substantial monetary infusions could be considered in the “relative circumstances” equation for a needs-based fee award. (Marriage of Smith, 242 Cal.App.4th 529, 534 (2015).)  However, the fee award was reversed and remanded because husband’s future litigation needs as far as attorney expenses might have been improperly calculated—a relook was needed.

Family Law: Denial Of Needs-Based Fee Request By Husband Reversed Where Family Code Section 4320 Factors Were Not Considered

 

Also, Block Billed Fee Billings Needed To Be Looked At Again.

     A family law judge’s denial of a fee request to ex-husband was remanded in Marriage of Nunez and Minor, Case No. G051412 (4^th Dist., Div. 3 May 27, 2016) (unpublished). The reason was that the lower court failed to consider the needs-based factors for such a fee request, the same factors which must be considered in deciding to award spousal support (also producing a reversal and remand on the support ruling). The appellate court also indicated that the block billing entries might well result in a downward fee adjustment, another issue to be considered on remand. Justice Ikola authored the 3-0 panel decision.

Family Law: $14,000 Fee Award Against Ex-Husband Reversed Because His Changed Financial Situation Justified Spousal Support Modification

 

Although Not Directly Raised, Appellate Court Entertained Out Of Equity Based On Husband’s Financial Change.

     In In re Shepherd, Case No. H039876 (6^th Dist. Apr. 21, 2016) (unpublished), ex-husband and ex-wife in a highly contentious dissolution proceeding had spent about $700,000 between the both of them along the way. This appeal involved ex-husband successfully challenging a refusal to grant him spousal support modification when his financial situation had changed because he owed repayment of some hefty employer-brokerage company loans. The trial judge had essentially left husband destitute from the spousal support orders. The reversal of the spousal support order also necessitated overturning a $14,000 fee award to wife despite the fact that husband may not have challenged it directly. The appellate court believed this was the fair thing to do, review the fee award and reverse it based on husband’s change in financial situation.

Family Law: Ex-Husband’s Second Pendente Lite Fee Request For Appeal Work And For Civil Lawsuit Expenses In Ex-Wife’s Parent Suit Properly Denied

 

Husband Already Got Nice First Pendente Lite Award And Trial Court Did Not Abuse Its Discretion In Concluding Parent Lawsuit Was Not “Related” To Family Law Proceeding.

    Going to the well too often can have consequences, as the fourth appeal in Sweeney v. Evilsizor, Case No. A144781 (1st Dist., Div. 1 Apr. 19, 2016) (unpublished) demonstrates.

    There, ex-husband had gotten an initial pendente lite fee award of $125,000, which was affirmed in a third appeal.  Ex-husband then sought another $12,600 in fees for appeals work and another $28,589 in fees incurred to fight ex-wife’s parents’ civil lawsuit over a loan.  The lower court denied both requests, prompting the fourth appeal.

    The fee denial orders were affirmed.  Because ex-husband admitted that the trial judge got it right on the initial pendente lite award, it was hard to argue he got it wrong when denying fees the second time around as far as knowledge of the applicable needs-based fees principles under the Family Code.  With respect to fees for the parents’ suit which he claimed was one “related” to the dissolution matter (with fees being allowable for “related” matters under Family Code section 2030(c)), the lower court did not abuse its discretion in concluding the matter was not “related” at that juncture in the dissolution action although that determination could be revisited and changed in the future if the lower court found it was appropriate to do so.

     Note:  We posted on an earlier appellate case between Sweeney and Evilsizor on October 28, 2014, involving affirmance of a sanctions order.

Family Law Two-Fer: Two Section 271 Sanction Awards Affirmed On Appeal

 

City & County of San Francisco v. Price, Case No. A139024 (1^st Dist., Div. 2 Mar. 29, 2016) (Unpublished).

     Wife challenged a $1,200 sanctions award presumably made under Family Code section 271 after husband made the request orally at a hearing. She argued this was a due process violation, but the appellate court found no form of notice is specified under section 271 and that opportunity to be heard at a hearing suffices where the amount requested is small in amount. She was given an opportunity to be heard through counsel, which was enough. With respect to the contention the lower court did not consider her ability to pay, the record showed the judge did stretch payment of the sanctions over 6 months—showing consideration for her fixed income situation.

Marriage of Patel, Case No. B257700 (2d Dist., Div. 3 Mar. 29, 2016) (Unpublished).

     A section 271 sanctions award against husband for $20,000 was affirmed because there no minute orders being appealed from and the parties stipulated to orders resolving certain payment issues (inclusive of fees) such that the controversy was moot on appeal.

Family Law: Appellate Settled Statement Case Gets Certified For Publication

 

… Should Usually Be Granted, But New Concurring Opinion Does Not Blame Trial Judge For What Transpired.

     On February 10, 2016, we posted on the unpublished decision of Mooney v. Superior Court, Case No. H041500, which considered whether attorney’s fees awarded against ex-wife for a settled statement option on appeal dispute was proper. The Sixth District remanded for a new hearing on this issue. We can now report that this decision was certified for publication on March 4, 2016, except that a concurring decision was entered by a sitting justice, who did not blame the trial court for the sequence of events in her concurrence.

Family Law: Ex-Wife’s Denied Needs-Based Fee Request Reversed For Failure To Make Findings

 

Ex-Husband’s Checking Boxes On Form Order Did Not Solve The Problem.

     Family Code section 2030(a)(2) for a few years has required that family law judges explain why or why not a needs-based award was granted/denied based on statutory factors.

     Our local Santa Ana Court of Appeal, in Marriage of Shimkus, Case Nos. G050323/G050599 (4^th Dist., Div. 3 Feb.18, 2016) (published), held that a trial judge’s denial of a needs-based fee award to ex-wife had to be reversed because it had no findings when the lower court simply denied the fee request. The trial judge said both sides should bear their own fees. Ex-husband argued that this failure was “cured” by his counsel submitting a form order where certain boxes were checked subsequently by the family law judge despite a failure to make findings at any prior junctures of the proceedings. Not good enough, Justice Thompson (on behalf of a 3-0 panel) wrote, given the absence of “true” findings on the record below as section 2030(a)(2) mandates.

Family Law: Family Law Judge Improperly Awarded Fees To Ex-Wife’s Husband In Connection With Motion For Settled Statement Under CRC 8.137

 

Appellate Court Found Settled Statements Should Be Encouraged, And Fee Award May Have Surrogate For Needs-Based Fees Under The Wrong Rubric.

    This one may interest appellate practitioners more than family law practitioners.  California Rules of Court, rule 8.137, actually encourages parties to agree to a settled statement where oral proceedings are not transcribed where there is a costs savings, the oral proceedings were not transcribed (a frequent occurrence with court reporters not being automatic in certain law departments), or the party seeking the settled statement is unable to pay for a reporter’s transcript. 

    The Sixth District in Mooney v. Superior Court (Mooney), Case No. H041500 (6th Dist. Feb. 9, 2016) (unpublished) reversed a family judge’s $10,000 fee award to ex-husband when ex-wife requested a settled statement (although not even granting or denying the settlement statement motion).  Aside from finding a preference for the settled statement option, the appellate court found that (1) the court took notes such that such a statement should not have been an onerous requirement, and (2) the family law judge seemed to consider ex-husband’s fee requests under needs-based statutes even though no such motion was really pending—not to mention no findings made by the judge under Family Code section 2032.  The matter was remanded for a new hearing on the settled statement motion, although here is the cautionary sentence from the Sixth District for the next hearing:  “A motion for a settled statement should be granted as a matter of course unless there is a justifiable excuse for denying it.”  (Slip Op., p. 14.)

Family Law: $45,000 Needs Based Fee Order Reversed Because It Was An Improper Judgment Modification

 

. . . Not Just A Clerical Change From Earlier Judgment.

Clerical error?

     In Marriage of Goldberg, Case No. C077384 (3d Dist. Jan. 25, 2016) (unpublished), husband contended that a $45,000 fee award was an improper modification of an earlier judgment which had only awarded $15,000 in needs-based fees to wife. The Third District reviewed the record and agreed, because the $30,000 augmentation from the earlier judgment was not just a clerical error subject to correction.

Family Law: Wife’s Attorney’s FLARPL Invalidated For Failure To Include Supporting Documentation About The Marital Home’s Fair Market Value

 

Husband Properly Granted Motion To Expunge FLARPL.

    Husband, who was granted the marital home as his sole and separate property in a dissolution case, expunged ex-wife’s attorney’s family law attorney’s real property lien (FLARPL) based on attorney’s failure to comply with statutory requirements for FLARPL.  That result was sustained in In re Marriage of Ciliberto & Firth, Case No. B251411 (2d Dist., Div. 7 Jan. 19, 2016) (unpublished).

    Aside from a deal memo from wife’s attorney indicating that the FLARPL was extinguished as part of the divorce settlement, the appellate court affirmed on the basis that the FLARPL notice was void for failure to comply with Family Code section 2033 dictates.  The problem was that the FLARPL-claiming attorney did not provide any documents supporting the FMV of the property as required under section 2033(b)(2)—with the reviewing court concluding that such supporting documentation was a very clear requirement under the statute, not just “substantial compliance” by testimony from the wife spouse as to what the property was worth.  Expungement affirmed.

Family Law: Byron Scott’s Ex-Wife Appealed Receiving $75,000 In Needs Based Fees Rather Than Requested $100,000

 

No Abuse of Discretion Given Family Law Judge Found Excessive Billing By Ex-Wife’s Counsel.

     In Marriage of Scott, Case No. B263480 (2d Dist., Div. 8 Jan. 15, 2016) (unpublished), Byron Scott’s ex-wife appealed a needs-based fee award of $75,000 rather than the $100,000 she requested. The appellate court found no abuse of discretion, especially given that the family law judge found excessive inter-office conferencing and multiple attorney involvement at conferences.

December 17, 2015 Unpublished Fee Decisions—Three Reversals, Two Affirmances On Variety Of Issues

 

Allocation—Artefex LP v. Bushman, Case No. B260737 (2d Dist., Div. 6 Dec. 17, 2015) (Unpublished).

    In this one, plaintiffs won $15,000 on a contract breach claim after voluntarily dismissing tort claims, with the trial judge then awarding $191,256 in fees and $11,778.37 in costs based on a fees clause.  The 2/6 DCA reversed based on its perception that the trial judge should have apportioned costs between the compensable contract and noncompensable tort claims under the circumstances.  It was convinced that the contract and tort claims did not share a common nucleus of facts.

Consumer Statutes—Calande v. Surf and Sand, LLC, Case No. H038679 (6th Dist. Nov. 19, 2015, mod. Dec. 17, 2015) (Unpublished).

    Defendants mobile owner/operator appealed a denial of fees requests, claiming they were entitled to them based on Civil Code section 1942.5(g), a retaliatory eviction fee-shifting provision, and Civil Code section 798.85, a Mobile Residency Law fee-shifting provision.  The appellate court agreed and reversed, determining that a general prayer for fees satisfied the section 1942.5(g) requirement of requesting them upon initiation of the action and further deciding that the fifth cause of action triggered MRL fee recovery.

Settlement—Ratner v. Wilson, Case No. G051264 (4th Dist., Div. 3 Dec. 17, 2015) (Unpublished).

    Here, a second judge denied a fee motion under a settlement agreement construed to be valid by a first judge ordering consideration of the fee request.  Second judge refused to grant fees, construing the validity of the settlement agreement in contravention of what was done with the first judge.  Presiding Justice O’Leary, on behalf of a 3-0 panel, said “no go,” can’t revisit the determination by the prior judge so look at the fee request again.

Costs—Grabowiec v. Schopmeyer, Case No. G050978 (4th Dist., Div. 3 Dec. 17, 2015) (Unpublished).

    The decision, again by Presiding Justice O’Leary, reminds us that the routine costs winner is not necessarily a fee winner under a fee-shifting statute—a common argument we see often, but which is usually a loser.  There is a distinction between prevailing for routine costs and prevailing for an award of attorney’s fees.   Affirmance in this one.

Family Law—In re Marriage of Mejia, Case No. B261401 (2d Dist., Div. 7 Dec. 17, 2015) (Unpublished). 

        Last on the list, a fee order under Family Code sections 2030/2032 (needs based) and 271 (sanctions) was affirmed under the abuse of discretion standard based on the failure of appellant to provide an adequate record—no reporter’s transcripts of oral hearings were provided so as to retard review under the circumstances.

Family Law: Family Law Judge Does Not Need To Conduct Trial On Family Code Section 2030 “Needs Based” Fee Request

 

Fee Decision Can Be Based On Declarations Alone.

    In Marriage of Filadelfina, Case No. G050184 (4th Dist., Div. 3 Nov. 30, 2015) (unpublished), husband appealed a $43,000 fee award to wife under Family Code section 2030’s “needs based” rubric.  On appeal, husband claimed a due process violation in that the family law judge only rendered a decision based on declarations and income/expense statements rather than holding a trial on the fee request.  The due process challenge was rejected in a 3-0 opinion authored by Justice Aronson.  “Neither the Rule of Court [rule 5.427] nor Judicial Council Form [FL-3] requires a trial on a party’s attorney fee request,” with the adjudication properly based on the parties’ declarations and paper submissions.  Wife then requested more fees for winning on appeal, but the reviewing court determined this was inappropriate because the court had no current information on the parties’ current financial situation—although indicating that this request could be renewed before the family law judge if wife so desired. 

Bankruptcy/Family Law: $15,000 Family Law Domestic Fee Support Award Affirmed On Appeal

 

Case Has Nice Discussion On Nondischargeable/Dischargeable Fee Awards in Bankruptcy.

     We have to give credit to Judge Yegan and his colleagues on the Second District, Division 6. They helped clarify an issue we have seen before as far as what type of family attorney’s fees awards in family law proceedings are nondischargeable or dischargeable in nature once a bankruptcy is at issue on behalf of the obligor.

     In Marriage of Angell, Case No. B259073 (2d Dist., Div. 6 Oct. 27, 2015) (unpublished), husband argued that a $15,000 fees award to wife was nondischargeable under a Chapter 13 bankruptcy proceeding. The appellate court disagreed, indicating that the fees award followed the principal award and was nondischargeable. If the domestic support obligation is nondischargeable, then the fee award attendant thereto is nondischargeable. However, if the property division or settlement awards are unattached to domestic support obligations, then fees relating to these activities are dischargeable in nature. (In re Duncan, 122 B.R. 434, 435-436 (Bankr. N.D. Okla. 1991).) Nice clarification.

Family Law: Attorney’s Fees Provision In Settlement Agreement Trumped Attempt To Obtain Family Code Section 271 Sanctions

 

Parties’ Bargain Prevailed, With Fees Only Relating To Litigation To Two Specific Motions—Sweeping Away Prior Sanctions Awards.

     Family law practitioners should read In re Marriage of Reed, Case Nos. B253728/B255233 (2d Dist., Div. 7 Oct. 21, 2015) (unpublished). Briefly summarized, it held that a specific settlement agreement clause on fee recovery blunted any recovery of prior Family Code section 271 sanctions because the language only allowed fee recovery for further litigation of two different motions before the family law judge. The case obviously enforced the parties’ bargain, containing a nice discussion of use of intent and extrinsic circumstances factors in construing contractual language.

Civil Rights, Employment, Family Law, Probate, Settlement: Four Unpublished “Power Ball” Post

 

Meyer v. Brown, Case No. D066226 (4th Dist., Div. 1 Oct. 14, 2015) (Unpublished)—Family Law.

    In this one, after an evidentiary hearing in which the court dismissed a domestic violence restraining order (DVRO), the prevailing party recovered $7,500 out of a requested $15,800 in fees.  The fee-assessed, losing party appealed, but to no avail.  The fee issue can be raised after the DVRO hearing, Faton v. Ahmedo, 236 Cal.App.4th 1160, 1170 (2015), especially given prevailing party checked wanting fees under Judicial Council Form DV-120; the lower court actually denied the DVRO request without prejudice rather than an outright dismissal; and there is no statutory or court rule indicating when the fee request could be brought—using general laches principles, the request was not untimely in prejudicial fashion (even though brought two months later).

Deutsch v. Martin, Case No. B259527 (2d Dist., Div. 7 Oct. 14, 2015) (Unpublished)—Settlement.

    In this second case, the lower court granted about $12,000 in fees and costs under a settlement agreement signed by the parties in a CCP § 664.6 proceeding.  That award had to be reversed because the settlement agreement clearly provided each side would bear fees/costs connected with the settlement agreement; the lower court had no ability to create new terms never agreed to by the parties.

Storm v. Rite Aid Corp., Case No. B254328 (2d Dist., Div. 2 Oct. 14, 2015) (Unpublished)—Civil Rights/Employment.

    The third case involves a plaintiff winning a wrongful termination suit against Rite Aid, then moving for attorney’s fees of about $1.6 million (lodestar times two) under the private attorney general statute, CCP § 1021.5.  The lower court denied the fees, a result affirmed on appeal.  The reason was that plaintiff was only vindicating an individual self-interest, not some greater public interest in the wrongful termination action.

Estate of Maciel, Case No. B258896 (2d Dist., Div. 5 Oct. 14, 2015) (Unpublished)—Probate.

    Fees were awarded to an estate administrator’s attorney to the tune of a little under $8,000.  The objector appealed, claiming no fee entitlement basis.  But that did not hold up on appeal, given that Probate Code section 1064(b) does allow for compensation to an estate administrator’s attorney.

Discovery/Family Law: 271 Sanctions Remanded For Reconsideration, But Bulk Of $123,087.50 Award Likely To Stand

 

Playing Racial/Religion Discrimination Card And Attacking Opposing Counsel/The Court Did Not “Play” Well For Ex-Husband In Bitter Custody Dispute.

    Well, this next case – Marriage of Salas and Farraj, Case No. B252053 (2d Dist., Div. 7 Sept. 1, 2015) (unpublished) – is a good lesson for family law practitioners to not play the discrimination card or to attack opposing counsel/the court even if the client insists on it.  The upshot may well be client exposure for Family Code section 271 sanctions which frustrate efforts to settle or to informally resolve normally contentious dissolution matters.

    In this one, ex-husband got in a bitter custody/visitation dispute after his ex-wife and child moved to India.  Emotions obviously raged, but ex-husband apparently played the racial/religious discrimination card, engaged in lots of discovery disputes, and attacked ex-wife’s counsel/the court. 

    The lower court eventually awarded postjudgment discovery sanctions against ex-husband as well as substantial 217 sanctions of $123,087.50. 

    Most of it got affirmed on appeal, or will be after a remand.

    Even though a litigant cannot aggregate discovery sanctions to meet the $5,000 appealability threshold, the nuance here was that this was a postjudgment award which is expressly appealable.

    On the 271 sanctions, there was a remand because the lower court did draw a “time demarcation” line, finding efforts on attacking a psychiatric report and initially challenging the move-away order were not sanctionable in nature.  However, because the time demarcation was not firmly taken into account, the sanctions had to be revisited in a post-remand proceeding.