Family Law Fee Awards: Trio Of Unpublished Decisions Discuss Fee Predicates and Standards of Review Upon Appeal of Fee Awards

First District, Division One and Fourth District, Division One Decide Fee Award Challenges Under Family Code Sections 271 and 2030/2032.

     Here is a trilogy of unpublished decisions involving review of fee awards in family law matters.

Marriage of Hagan – Family Code section 271

     The First District, Division One seemed to struggle with the result in this case, but affirmed a fee award under the deferential abuse of discretion standard.

     In Marriage of Hagan, Case No. A118644 (1^st Dist., Div. 1 Nov. 25, 2008) (unpublished), the family law judge found that wife had frustrated the purpose of settling the case by filing meritless reconsideration and new trial motions, awarding husband $1,055 in attorney’s fees under Family Code section 271 (discussed numerous times in our category “Cases: Family Law Awards”). Wife did not challenge the frustration finding, but did contest whether husband established that she had the ability to pay the award. (See Nicholson v. Fazeli, 113 Cal.App.4^th 1091, 1101 (2003) [no award justified under section 271 if it imposes an unreasonable financial burden on the party against whom the sanction is imposed].) As the Court of Appeal synopsized the case, this presented a “more challenging inquiry” on appeal, because (1) no current income and expense declaration from wife had been submitted below, (2) wife had no job or income, and (3) wife declined to place a value on her property under questioning by the court, although she was evasive on the liens that were against it.

     However, even though it might have reached an opposite conclusion, the abuse of discretion standard justified sustaining the rather modest award. The Court of Appeal especially credited wife’s evasiveness on the property equity issue as a basis to affirm the lower court’s judgment call below.

King v. King – Family Code section 2030

     Family Code section 2030(a) permits an award of attorney’s fees in marriage dissolution proceedings in an amount “as may be reasonably necessary for the prosecution or defense of the proceeding or any proceeding related thereto.” Section 2030(b) confers discretion on family law judges to assess fee/costs award against nonspousal parties in the same manner as allowed under section 2030(a). However, there is an important caveat: the fee award must be “just and reasonable” under the relative circumstances, with the lower court to consider the respective financial resources of each side under section 2030(b).

     In King v. King, Case No. D049393 (4^th Dist., Div. 1 Nov. 26, 2008) (unpublished), the trial court denied wife’s requests for an award of attorney’s fees under section 2030 as against her ex-husband’s current wife based on decedent ex-husband’s naming of his second wife as a life insurance beneficiary rather than his son by former wife. Although finding second wife was innocent of wrongdoing, the trial court refused to award fees to first wife and did not consider the needs of the former wife in denying a fee award. This was an abuse of discretion in not considering the statutory “need” factors under section 2030, so a remand was warranted to make sure the trial court engaged in the proper decision making methodology. (See In re Matter of Cheriton, 92 Cal.App.4^th 269, 315 (2001).)

Marriage of Brandes—Family Code sections 2030 and 2032

     The last case also involved a “needs”-based fee award under sections 2030 and 2032. Both ex-spouses (of an 18 year marriage) had substantial cash flow and hefty assets. However, the family law judge can award fees under these statutory provisions based on disparity in financial resources alone, even if the applicant spouse has the funds to pay for his or her fees. (In re Marriage of Drake, 53 Cal.App.4^th 1139, 1167 (1997).) In the next situation, wife was awarded substantial fees even though she had substantial wherewithal—but the disparity in resources compared to her husband’s wealth led to the sustaining of the fee award in her favor.

     Marriage of Brandes, Case No. D050276 (4^th Dist., Div. 1 Nov. 25, 2008) (unpublished) concerned a husband, Charles H. Brandes, and a wife, Linda F. Brandes, with cash/asset portfolios that most of us could only dream of. Wife, who moved for husband to pay her attorney’s fees and litigation costs, had monthly income of $350,000 (much of it spousal support), $1.7 million in liquid assets, $70 million in additional assets (much of these gained from the dissolution), and $650,000 in monthly expenses. She moved for fees based on the claim she was unable to pay without liquidating assets she had received from the parties’ prior division of property. In contrast, husband had monthly income of $10 million in March 2005 (which increased to $16.67 million per month in 2006), over $290 million in assets, $216,000 in debt, and monthly expenses of $ 2.1 million. (Earlier, the family law judge had valued husband’s company as having a worth between $1.4-$1.92 billion.) After two hearings (with the second one focusing on the judge’s dissatisfaction with the evidence presented in support of wife’s fee requests), the lower court ordered husband to pay wife one-half of the fees she requested, $250,000 for past fees/costs and $750,000 for future fees/costs. The main basis for the decision rested on the disparity of income—wife had $350,000 a month of cash flow, whereas husband had monthly income in the $10-16 million range.

     Husband appealed on the ground wife had substantial assets so that she had no true “need” under sections 2030 and 2032.

     The San Diego-based appellate court disagreed, finding no abuse of discretion in the fee award to wife as well as awarding her costs as the winner on appeal.

     Because disparate financial situations may of themselves demonstrate relative “need,” ample bases were set forth in the financial information in the record to affirm the family law judge’s award. The Court of Appeal cited other cases affirming awards of fees under disparate situations even though the requesting spouse had sufficient resources to pay from his/her own pocket. (See, e.g., In re Marriage of O’Connor, 59 Cal.App.4^th 877, 882-883 (1997).) The appellate court also found that it was proper for the family law judge to conclude wife should not be compelled to liquidate assets she obtained from the marital dissolution to pay fees, especially considering husband’s ample resources. Also, the lower court had indeed slashed wife’s fee requests so that only “reasonable” fees were awarded. (In re Marriage of Keech, 75 Cal.App.4^th 860, 870 (1999).) The fee order was affirmed under the abuse of discretion review standard.

     All of these cases pivoted on the standard of review and the lower court’s adherence to evaluation of the statutory factors under Family Code sections 271, 2030, or 2032. Where the proper statutory factors were followed, the discretionary awards were affirmed—even though the Hagan appellate court might have ruled differently than the trial judge. However, in King, reversal and remand was the end result because the statutory factors weighted in the discretionary process were not even considered.