CALIFORNIA ATTORNEY'S FEES

Discovery, Family Law, Sanctions: $5,500 Discovery Sanctions Award Against Ex-Client Attorney Reversed Where Attorney Not Given Notice She Was A “Sanctions Target”

Due Process Violation Was Reason For Reversal.

             In Marriage of Mehta & Grover, Case No. A146919 (1^st Dist., Div. 4 June 19, 2018) (unpublished), a $5,500 discovery sanction against an ex-attorney for wife was reversed on due process grounds. What happened was that before the discovery sanctions motion was decided, attorney was relieved as wife’s attorney, with nothing in the papers indicating she was the target of a discovery sanctions request (with only her client wife indicated as a target). The subsequent $5,500 sanctions order against ex-attorney was reversed on due process grounds, given the attorney had no notice that she was personally the subject of the sanctions request. Here is what the appellate court had to say on a broader basis with respect to sanctions request in moving or opposing papers: “To interpret [Code of Civil Procedure] section 2023.040 as imposing a notice obligation only on those who elect to include a sanctions motion in moving papers (i.e., in a discovery motion or in a separate sanctions motion), and not on those who include a sanctions motion in opposition papers, would defeat the obvious purpose of the statute and would lead to absurd consequences.” (Slip Op., p. 9.)

Appealability, Family Law: Litigant’s Failures To Specify Fee Order As Subject Of Notice Of Appeal And As Appeal Subject In Civil Information Statement Were Fatal In Nature

Although Notices Of Appeal Are Construed Liberally, The Order Under Appeal Still Must Be Specified With Some Precision.

            Marriage of Schoenfeld, Case No. B281835 (2d Dist., Div. 7 June 18, 2018) (unpublished) is a reminder to appellants that some precision must be made in both the notice of appeal and the appellate civil information statement in order to demonstrate that a particular order is truly the subject of review. (For litigants unaware of this last requirement, a civil information statement must be filed with California appellate courts within 15 days of notification by the clerk about the appeal being filed. It requests pointed questions about the orders being appealed from, their dates, and the bases for the appeal.)

            In this one, the litigant did not specify that it was appealing from a pendente lite fee order, although such an order is appealable. (In re Marriage of Tharp, 188 Cal.App.4^th 1295, 1311 (2010).) Appellant compounded his problems by not mentioning the fee order in the civil information statement filed with the Court of Appeal. The result was that the appellate court dismissed the appeal, given that appellant did not specify he was challenging the fee order.

Family Law: Section 271 Sanctions Award Against Ex-Wife And Section 2030/2032 Denial Of Needs-Based Award To Ex-Wife Both Reversed On Appeal

Both Sides Had Paid Or Owed A Cumulative $1.841 Million In Dissolution Proceedings.

            We are not sure that the appellate court was happy with any of the parties in this case that we now report on.   After all, in the dissolution saga, ex-husband had paid attorneys $900,000, still owing $70,000, while ex-wife had paid $241,000, but owed her current attorney about $530,000. However, given this tremendous expenditure of about $1.841 million if our math is correct, looks like the appellate court kept its objectivity intact.

            In Marriage of Stupp & Schilders, Case Nos. A146301/A148051 and A148382 (1^st Dist., Div. 2 May 30, 2018) (all unpublished), the appellate court principally was reviewing discovery sanctions and Family Code section 271 sanctions against ex-wife and the denial of Family Code section 2030/2032 needs-based fee request by ex-wife. (The discovery sanctions against ex-wife totaled $8,971 [either in favor of ex-husband or his attorney] and $2,500 section 271 sanctions in favor of ex-husband). On the separate needs-based request, ex-wife sought $370,000 in fees from ex-husband, but the trial judge denied the request finding the parties were essentially in the same financial position.

            The section 271 sanctions and denial of needs-based fees, with respect to ex-wife, were both reversed on appeal.

            Section 271 sanctions. The discovery sanctions did get affirmed against ex-wife. However, the section 271 sanctions were overturned because the appellate court believed that this was a “double dip” award which was unfair given that the pain already was inflicted and ameliorated through the discovery sanctions award.

            Needs-Based request by ex-wife. This one got reversed based on the record showing that the disposable monthly income was not “close” in nature. Ex-husband did have much more resources, such that he had much more of a “war chest” such that a restudy by the family judge law was required, although the appellate court astutely did not pass on what should be awarded—if anything—on remand.

Family Law: Ex-Husband Receives Full $138,000 Of Fee Request Against Ex-Wife For Modifying Support Order And Ex-Wife Only Received $10,627 In Fees Out Of Requested $159,783 Fee Request Against Ex-Husband Under Family Code Section 271 Sanctions Provision.

Ex-Husband Obtained A Lopsided Win, With Both Parties Expending $1 Million In Litigation Costs Since Separation.

           Attorney’s fees awards in family law setting are extremely discretionary and the end rest of litigation costs for both parties along the way, even with some reimbursement awards allowed, can certainly make destitute or bankrupt any party. This is well illustrated by what occurred in Marriage of Turnbaugh, Case Nos. A1496157/A1510805 (1^st Dist., Div. 1 May 24, 2018) (unpublished).

            In this situation, both sides had expended $1 million in litigation costs since separation. (Yep, this is no typo.) Ex-husband sought $138,000 from ex-wife under Family Code section 3652, which allows the court to award fees and costs to a prevailing party for obtaining an order modifying, terminating, or setting side a prior support order. He did obtain a reduction in support and did not have to pay private school tuition for his two boys based on a declining financial condition. That fee request was granted in full.   Ex-wife obtained $10,627 out of a requested $159,783 in fees under Family Code section 271’s provision against ex-husband.

            Ex-wife appealed the Family Code section 3652 award to ex-husband.

            The appellate court affirmed. Although there is no definition of “prevailing party” in section 3652, courts in other situations use a practical approach, which was adopted as the standard by the reviewing panel in this cause. Here, the outcome was lopsided in ex-husband’s favor such that no abuse of discretion occurred in granting the “full boat” fee request.

Family Law: $20,000 Section 271 Sanctions Award And $5,000 Breach of Fiduciary Duty Sanctions Award Affirmed By 4/3 DCA Against Ex-Wife

But No Appellate Fees Awarded To Ex-Husband.

            In Marriage of Reed, Case No. G050666 (4^th Dist., Div. 3 May 15, 2018) (unpublished), ex-wife was assessed with $20,000 in sanctions under Family Code section 271 and another $5,000 in sanctions for breach of fiduciary duty for failure to disclose the existence of a community property pension, both in favor of ex-husband. Wife’s appeal failed to surmount the deferential abuse of discretion standard. The many continuances, delays, and no-shows by ex-wife meant that ex-husband had to repeatedly submit income and expense declarations and his counsel had to go to court unnecessarily, justifying the section 271 sanctions. Three Family Code provisions—section 1101(g), section 2107(c), and section 271(a)—collectively give the court authority to order sanctions and pay attorney’s fees for breach of a party’s fiduciary duty of disclosure, which would encompass failure to disclose the existence of ex-wife’s retirement plan and with the appellate court observing that the lower court was lenient in only imposing $5,000 in sanctions. Ex-husband asked for an award of fees on appeal, but that was denied because ex-husband failed to provide any financial information of ex-wife so as to justify an award under Family Code section 2030 and because the reviewing court on its own raised the key jurisdictional issue such that section 271 appellate sanctions were unwarranted.

            Justice Fybel authored this 3-0 panel opinion.

Family Law: $30,000 271 Sanctions Against Ex-Husband Not Reviewable For Lack Of Adequate Record Including Family Hearings Which Led To The Sanctions Order

Also, Disentitlement Doctrine Might Prevent Further Appeals By Ex-Husband.

            Ex-husband in Marriage of Volovik & Parchin, Case No. B280980 (2d Dist., Div. 5 Apr. 18, 2018) (unpublished) was disgruntled when the lower court imposed a Family Code section 271 sanction award of $30,000 against him, although the result could have been worse given the 271 request for $70,964.  The sanctions order was affirmed because ex-husband failed to provide an adequate record in the form of reporter’s transcripts of family law hearings which would have allowed the appellate court to see if there was a true abuse of discretion.

            The appellate court, in a footnote, also indicated that it might not entertain future appeals by ex-husband under the disentitlement doctrine.   It was alleged that ex-husband only paid $197 of the $30,000 sanctions award, such that the reviewing court can dismiss an appeal for a litigant’s failure to comply with trial court orders, in this case the $30,000 sanctions order which was sustained after this particular appeal.

Family Law/Record: Ex-Wife’s 271 Sanctions Request Properly Denied

Failure to Include Reporter’s Transcript Of Fee Proceedings Was Fatal On Appeal.

            In a growing trend among California intermediate appellate courts, the 4/3 DCA in Marriage of Watts, Case No. G053304 (4^th Dist., Div. 3 Apr. 11, 2018) (unpublished), affirmed the denial of Family Code section 217 sanctions to the tune of $37,000 as requested by ex-wife based on a failure to provide a reporter’s transcript of a hearing on appeal.   Given that the lower court’s ruling was governed by an abuse of discretion standard, the appellate court found that the appellant’s failure to provide a reporter’s transcript of the fee proceeding cemented the presumption that adequate evidence and argument was presented to support the lower court’s decision to deny 271 sanctions.  Acting Presiding Justice Bedsworth authored this 3-0 panel decision.

Appeal Sanctions/Family Law: $25,000 Family Code Section 271 Sanction Affirmed On Appeal

Appeal By Ex-Wife Found Frivolous, Which Carried $10,000 More In Sanctions.

            Marriage of Wintermute and Soltan, Case No. G052397 (4^th Dist., Div. 3 Apr. 9, 2018) (unpublished) was a situation where ex-wife appealed a Family Code section 271 sanction of $25,000 after an earlier appellate opinion disagreed with a critical assertion of ex-wife that a settlement was not global in nature, a ruling which became law of the case.  The section 271 sanction was for ex-wife’s failure to do a tardy dismissal as was promised to be done.  (The lower court actually disallowed $4,000 of the original sanctions request because the other side failed to file acceptable declarations during a few prior go-arounds.)  The appellate court affirmed the sanctions award based on the abuse of discretion standard, finding that ex-wife “was lucky to get away with the modesty penalty of $25,000.”  The other side moved to recoup fees for a frivolous appeal, with the 4/3 DCA panel—in an opinion authored by Acting Presiding Justice Bedsworth—ordering ex-wife and her counsel to pay $5,000 to the other side and to pay $5,000 to the clerk of the court for some of the expenses for internal court time in working up the appeal. 

Family Law Post: Family Code Section 271 Sanctions Can Be Deducted From The Variable Component Of A Spousal Support Order

Spousal Support Is Income For Purposes Of Interpreting Section 271.

            In Marriage of Pearson, Case No. D070360 (4^th Dist., Div. 1 Mar. 12, 2018 partially published; fee discussion published; other parts of opinion modified Mar. 27, 2018), the 4/1 DCA decided that a trial judge did not err in ordering that Family Code section 271 sanctions against an ex-wife could be paid for by ex-husband’s deduction of the sanctions from the variable component of his spousal support obligations (in this case, future bonus payments). 

Family Law: Ex-Wife’s Appeal Of “Needs Fees” Denial Was Not Successful

Family Law Judge Basically Found Both Parties Could Bear Expenses And Ex-Wife Overlitigated The Case.

            Marriage of Vu and Fearn, Case No. G054234 (4^th Dist., Div. 3 Feb. 8, 2018) (unpublished) was a situation where the family law judge awarded $15,000 in Family Code section 271 sanctions against both former spouses but also denied ex-wife’s request for $50,000 in “needs-based” fees under Family Code sections 2030/2032.   Ex-wife was confounded, choosing to appeal—but to no avail on the “needs-based” issue.  The record below showed no abuse of discretion given the financial situation of each party (including gifts, use of credit card by a friend, and fee rent by parents) and given ex-wife’s “over litigation” of the case through multiple attorneys. 

            Justice Fybel authored the 3-0 panel decision. 

Family Law: Court Of Appeal Affirms 2030/2032 Attorney Fee Award Of $60,000 To Ex-Wife And 271 Sanctions Award Of $3,000 Against Ex-Wife

Husband Had Sought $37,000 Sanctions Award.

            Ex-husband, who had spent $165,000 in fees on his own dissolution attorney and had paid ex-wife $119,650 through previous pendent lite attorney’s fees, was frustrated when the trial judge ordered him to pay yet an additional $60,000 in 2030/2032 fees to wife and only sanctioned her $3,000 under section 271 for three instances of misconduct (rather than the $37,000 he requested).

            In his subsequent appeal in Marriage of Blas and Rivera, Case No. D066720 (4^th Dist., Div. 2 Jan. 25, 2018) (unpublished), he was unable to obtain a reversal based on not being able to surmount the deferential abuse of discretion standard of review.  Ex-wife certainly had more limited resources from a financial perspective, and the lower court believed that even the $3,000 sanctions award would be a stretch for her given that she only had $3,000 cash in the bank.

            The 3-0 opinion was authored by Justice Richard T. Fields, who was confirmed to the 4/2 DCA in February 2017.

Family Law: $20,000 271 Sanctions Award Affirmed On Appeal

No Abuse Of Discretion Demonstrated.

            In re Marriage of Rafipoor, Case Nos. G053243/G053665 (4^th Dist., Div. 3 Jan. 18, 2018) (unpublished) involved a situation where ex-husband was assessed with Family Code section 271 sanctions in the amount of $20,000.  Among other things, the record suggested that husband made a motion with his finger across his throat while certain witnesses were testifying in court.  The appellate court agreed that harassment of witnesses is bad faith conduct hampering cooperation between parties and attorneys for section 271 sanctions purposes.  271 sanctions award was affirmed here based on failure to show the award was an abuse of discretion.  Presiding Justice O’Leary authored the 3-0 panel decision.

Family Law: $2,000 Needs-Based Fees Award To Ex-Wife Sustained On Appeal

Record Did Show Disparity In Income Between Spouses.

            In Marriage of Cueva, Case No. D071913 (4^th Dist., Div. 1 Jan. 9, 2018) (unpublished), the family law judge awarded ex-wife Family Code section 2030 needs-based fees of $2,000 after a 9 ½ year marriage involving five children.  Father’s challenges to the award were unavailing on appeal.  Mother was a “stay at home” mom, father made much more income as a truck driver (even after an interim unsuccessful stint as an insurance agent/financial advisor), and mother had to pay for basic living expenses.  Not to mention, the award only had to paid off at $50 per month. 

Family Law, Lien For Attorney Fees, Probate: Wife Had Authority Under Family Law Equal Management Principles To Engage Attorney For Personal Injuries Incurred By Incapacitated Husband

Also, In Contested Probate Proceedings, An Evidentiary Hearing Is Required Unless Parties Stipulate To Using Affidavits Or Declarations.

            Maldonado v. Giblin, Case No. H041417 (6^th Dist. Dec. 27, 2017) (unpublished) is a prime example showing how appellate jurists are attuned to gender equality issues and legislative changes aimed at promoting such equality in the family law/probate context.

            What happened in this case was that husband became incapacitated following a personal injury accident, leading wife to engage an initial attorney to represent husband and with the retainer agreement containing an attorney’s lien provision.  Initial attorney did some work and obtained a preliminary settlement offer from the tortfeasor defendant’s  insurance carrier.  Later, wife retained discharged first attorney and engaged a second attorney filing litigation which resulted in a $1 million settlement with the insurance carrier.  However, in a contested probate proceeding arising out of wife’s appointment as temporary co-conservator with husband’s son, the lower court approved the settlement (including fees to the second attorney) but denied first attorney’s request for fees based on the attorney’s lien and quantum meruit recovery.  The primary basis for rejecting first attorney’s claims was that the wife did not have agency authority for husband to enter into a retainer agreement with first attorney.

            The trial court’s conclusions were reversed on appeal so that first attorney gets another shot at compensation for his prior services.

            First attorney did have a reasonable expectation of compensation because wife, just like husband, had equal management powers when another spouse becomes incapacitated as far as entering into a client-attorney relationship to redress personal injuries to the other spouse.  It found that 1975 family legislative amendments gave husband and wives equal management abilities, such that older cases only recognizing male supremacy were antiquated in nature, establishing the basis for an attorney’s lien by first attorney.

            There also was a procedural issue addressed by the appellate court in order to provide assistance on remand.  First of all, the attorney’s lien dispute could be raised in the probate proceeding (unlike the situation where a separate action is necessary in a civil litigation context) because of the lower court’s unique position to approve a settlement entered into by a guardian or a conservator (the situation here).  Next, it was error for the lower court to decide the contested probate dispute on the basis of just declarations, without an evidentiary hearing under Probate Code section 1022 unless the parties stipulate otherwise. 

Homeowners Association, Family Law, Prevailing Party: Appellate Courts Deal With Trifecta Of Fees Issues In Unpublished November 9 Opinions

Homeowners Association—Anaheim Hills Planned Community Assn. v. Chen, Case No. G053128 (4^th Dist., Div. 3 Nov. 9, 2017) (Unpublished).

            In this first one, homeowner appealed a trial court’s award of appellate fees to HOA in a CC&R dispute under both a prior settlement agreement and the Davis-Stirling Act.  The appellate fee award of $36,830.50 was affirmed.   An action to enforce a settlement agreement does permit a fee award under the Davis-Stirling Act.  (Rancho Mirage Country Club Homeowners Assn. v. Hazelbaker, 2 Cal.App.5^th 252, 259-260 (2016).)  HOA also did prevail, given that it forced the homeowner to remedy the CC&R violations—its primary litigation objective.  Justice Moore authored the decision on behalf of a 3-0 panel.

Family Law—Marriage of Aubry, Case No. E066624 (4^th Dist., Div. 2 Nov. 9, 2017) (Unpublished).

            The second one involved an ex-wife’s appeal of a needs-based $10,000 fees award to ex-husband under Family Code sections 2030 and 2032.  The award was reversed because the trial judge was unaware of a capped $6,000 fee arrangement between ex-wife and her counsel, it was unclear if consideration was given to any net income received by husband from assets, and it was unclear if the trial court considered wife’s monthly income.  These vagaries required a reverse and re-do by the court below.

Prevailing Party—Law Offices of Mark B. Plummer PC v. Bayuk, Case No. G053836 (4^th Dist., Div. 3 Nov. 9, 2017) (Unpublished).

            The last opinion in the trifecta reviewed here involved a battle between attorneys representing a client in various proceedings, with the appellant suing for more compensation before finally admitting at trial that he basically received what was owed, leading the trial judge to enter judgment in favor of the opposing attorneys.  Opposing attorneys were granted fees under a contractual fees clause in an operative settlement agreement between some of the parties (although the provision could encompass even another non-party attorney to the settlement agreement).  The trial judge’s entry of an actual judgment precluded appellant’s argument that it really voluntarily the dismissed the matter so as to rise to the Santisas bar to fee recovery.  Appellant argued that attorneys represented themselves in defense, but the record showed that one co-defendant represented another defendant attorney and that another attorney had independent representation (both completely proper), dashing hopes that a Trope v. Katz defense would apply.  Justice Moore also authored this one on behalf of the 4/3 panel.   

Family Law: Ex-Wife Properly Denied Attorney’s Fees Under Settlement Stipulation Fees Clause And Family Code Provisions

Contract Provision Was Discretionary, And Ex-Husband Lacked Ability To Pay Under Family Code Provisions.

            Ex-wife obviously was frustrated in Marriage of Rice, Case No. G053287 (4^th Dist., Div. 3 Sept. 29, 2017) (unpublished) because she did seek attorney’s fees from ex-husband for child/spousal support issues but was denied them after multiple hearings before family law judges.  The most recent fee denial was affirmed on appeal.  She relied on a dissolution settlement provision providing that the court may award costs and fees relating to obligation issues; however, the 4/3 DCA panel observed the word “may” is permissive, quoting from a prior decision indicating that this word means “you can do if you want, but you aren’t being forced to.”  (Woolls v. Superior Court, 127 Cal.App.4^th 197, 208 (2005).)  She also asked for awards of fees under Family Code section 3557 (fee shifting in child support disputes) and section 271 (fees as sanctions for not trying to resolve the dissolution case), but the trial judge’s determination that ex-husband could not pay—a mandatory factor for consideration under both provisions—was no abuse of discretion.  Justice Moore was the author of this decision. 

Family Law: 2030/2032 Fee Award To Ex-Husband Reversed Because Based On Ex-Wife’s Assumed Ability To Obtain A Loan To Pay Award To Ex-Husband

Award Must Be Based On Actual Income And Assets.

            Although unpublished, Marriage of Aquino, Case No. B279406 (2d Dist., Div. 5 Sept. 29, 2017) (unpublished) dealt with the issue of whether a trial judge could order a needs-based fee award under Family Code sections 2030/2032 based on the perception that one ex-spouse could obtain a loan to fund the fee award. 

            The facts of the case are that ex-wife had no income stream and substantial monthly expenses based on opening up her own investment company, but the trial court believed she could obtain a loan and ordered her to pay 2030/2032 fees to ex-husband.  The 2/5 DCA reversed, finding that the award needed to be based on actual income and/or assets, with the panel observing it could locate no published California decision basing a 2030/2032 fee award on a spouse’s assumed ability to obtain a loan.

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.