Adamson v. Pheffer

Filed 1/5/10 Adamson v. Pheffer CA1/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

Joseph W. Pheffer appeals from an order requiring him to pay $10,000 in attorney fees to Julie Adamson in a child custody proceeding. We affirm the order.

I. BACKGROUND

Pheffer and Adamson have been involved in a contentious nonmarital child custody proceeding since April 2000. The two initially shared legal and physical custody of their now 10-year-old child. In October 2004, Adamson lost legal custody and a significant share of physical custody. Psychologist Dr. Daniel Pickar, appointed by the court with the parties agreement in April 2005, recommended in his initial report that Adamsons share of custody not be increased until she met a series of requirements concerning alcohol abuse treatment and continued sobriety. Dr. Pickar also recommended that no consideration be given to removing Pheffers status as sole legal custodian until two years after the date of the report. Dr. Pickars recommendations were adopted by the court on October 18, 2005.

In August 2007, Adamson filed an order to show cause to increase her share of physical custody. Pheffer opposed the request. On October 30, 2007, both parties stipulated to have Dr. Pickar update the custody evaluation, with the cost and an initial retainer of $2,000 to be split equally. Pheffer paid his portion of the retainer. Due to Adamsons financial hardship claim, Dr. Pickar agreed to begin the evaluation with a $500 retainer payment from her. She was to make up the balance as soon as she was able. Ultimately, Adamson indicated she could not pay her balance and would be asking the court to order Pheffer to pay the balance. Pheffer eventually did pay the balance under protest so the report could be completed.

In April 2008, Adamson filed a motion for attorney fees and costs plus $1,500 for expenses related to Dr. Pickars report, along with an income and expense declaration and a declaration from her attorney, Robert Montgomery, stating Adamson owed him $13,595 for past due fees and costs. Montgomery estimated the fees necessary to handle the matter through the conclusion of further hearings regarding custody would be approximately $10,000. Adamsons income and expense declaration claimed monthly income of $3,519, monthly expenses of $8,518, and real and personal property valued at $100,000 net.

Pheffer opposed Adamsons motion and asked the court to reaffirm its earlier order that Adamson pay her share of the costs for the Pickar report and to award him $2,000 in attorney fees for defending against Adamsons anticipated motion regarding visitation. In support of his opposition, Pheffer submitted an income and expense declaration signed on May 8, 2008, claiming monthly income of $3,695 and monthly expenses of $9,304. The declaration contained no figure for the net value of real and personal property Pheffer owned. Pheffer also filed responsive declarations attacking the veracity of Adamsons income and expense declaration and describing the details of his own financial situation. He summarized his position as follows: [B]oth parties have drastically different income situations from those presented during a litigated support hearing in 2006.^[[1]] While the income situations of both have worsened dramatically, they are in relatively equal positions when considering litigation resources to present their cases. Both [Adamson] and [Pheffer], as licensed real estate professionals, have suffered dramatic decreases in income as a result of the economy and market conditions. [] With the parties having relatively equal litigation resources, the requests of [Adamson] should be denied.

At the hearing on Adamsons and Pheffers requests, Adamsons attorney requested the trial court receive as evidence a portion of a March 2008 loan application that Adamson had previously subpoenaed. Pheffers attorney demanded the court receive the entire 89 pages of the loan application. The entire loan application was marked as Exhibit A and received by the court. In the application, Pheffer represented to the lender that his monthly self-employment income was $14,000, and that he and his wife had a net worth of $1,365,472.[2]

Adamsons attorney argued to the court pursuant to In re Marriage of Calcaterra & Badakhsh (2005) 132 Cal.App.4th 28 (Calcaterra), that it should rely on the information contained in the loan application rather than on Pheffers income and expense declaration. Pheffers attorney responded that Pheffers income dropped precipitously in 2007 and 2008. According to counsel, the loan application was submitted before any of the year-end financial information for 2007 was available, and was accurate based on the 2005 and 2006 tax returns provided with it. Counsel explained the loan application came about because Pheffers new wife, Susanna, wanted to invest the proceeds from the sale of her premarital home in a property she was purchasing in partnership with another couple. Pheffer and Susanna agreed that rather than Susanna purchasing an interest in the property as her separate property, Pheffer would be added to the title for estate planning purposes just as Pheffer had added Susanna to the title of the marital home, which he had owned for several years prior to the marriage. According to counsel, the new property was being purchased by Susanna with her assets in substance as her separate property, and the lender only required financial information from Pheffer because he was on title.

After hearing argument, the court took the matter under submission for one hour before returning and granting Adamsons request for attorney fees of $10,000 to be paid in $1,000 monthly payments. A written order was filed on August 14, 2008, and this timely appeal followed.

II. DISCUSSION

Pheffer contends the fee award must be reversed because (1) the trial court applied the wrong statutory standard; (2) the trial court erroneously relied on the loan application; and (3) there was no showing that a $10,000 fee award was reasonably necessary based on the parties respective abilities to pay or Adamsons litigation needs.

In general, the standard of review of attorney fee awards is abuse of discretion. (In re Marriage of Rosen (2002) 105 Cal.App.4th 808, 829.) Although Pheffer does raise one issue that may be subject to de novo reviewthe asserted lack of statutory authorization for the awardwe do not reach the merits of that issue for the reasons discussed below.

A. Statutory Error

Adamson noticed her motion for attorney fees and costs using a mandatory Judicial Council family law notice of motion form, FL-301, that does not specify a fee statute. Her accompanying moving papers also did not cite a specific fee statute. In his opposition, Pheffer argued Adamson was not entitled to an award of fees under Family Code[3] section 2030, subdivision (a)(1) and cited case precedents decided under that statute.[4] At oral argument, Adamsons counsel stated the motion had been brought under section 2030 and referred throughout his argument to that section and to the standards it establishes for deciding fee motions in family law proceedings. Pheffers counsel, for his part, argued only that the evidence did not warrant an award of fees under section 2030. He made no claim section 2030 was inapplicable to the fee issue before the court.

For the first time on this appeal, Pheffer contends the trial court erred by awarding fees under section 2030. He maintains the court should instead have analyzed Adamsons fee motion under section 7605,[5] because section 2030 assertedly has no application when the parties to a child custody proceeding were never married. This argument is unavailing. First, Pheffer forfeited objection to the application of section 2030 by failing to make that objection at any time in the trial court. (In re Marriage of Hinman (1997) 55 Cal.App.4th 988, 1002; see also In re Marriage of Daniels (1993) 19 Cal.App.4th 1102, 1111, fn. 3.)[6] Second, the trial court did not specify what statute it was applying in awarding fees. We must presume the trial court applied the correct statute. (In re Marriage of Ananeh-Firempong (1990) 219 Cal.App.3d 272, 278279.) Third, even assuming for the sake of analysis that the trial court applied section 2030, and that it erred in doing so, any such assumed error was harmless because the standards for awarding fees under section 7605 in a nonmarital case are identical to those under section 2030.

We therefore reject Pheffers claim that the fee order must be reversed due to alleged error in applying the wrong statute.

B. Consideration of Pheffers Loan Application

Pheffer argues the trial court abused its discretion by considering the loan application he and his wife submitted to a lender in March 2008. According to Pheffer, the application should not have been considered because it included (1) information about Pheffers community property with his wife and about her separate property and income; and (2) financial information that was outdated and not fairly reflective of his ability, relative to Adamsons, to bear the fees.

As an initial matter, we note that when Adamson sought to introduce portions of the loan application in evidence, Pheffers counsel objected to leaving any portion of the loan application out. He insisted the entire batch of documents that comprise the loan application be received so a complete record . . . of the loan application would be before the court. To the extent Pheffer is now claiming his loan application should not have been allowed into evidence, he forfeited that claim by his actions in the trial court.

In any event, it is settled that the trial court does have discretion to consider a partys loan application as evidence of the partys true income and net worth. (See Calcaterra, supra, 132 Cal.App.4th 28, 3435 [upholding courts reliance on income stated in husbands loan application over that stated in income tax returns in determining child support where husband owned his own business].) In Calcaterra, the Court of Appeal also rejected the husbands argument that the loan application was outdated because it had been prepared 22 months before the child support hearing, finding the trial court could reasonably draw the inference that fathers income had not decreased since the . . . loan application was made. (Id. at p. 35.) In our case, the loan application was submitted just two months before Pheffer submitted an income and expense declaration claiming a drastically lower income. It was at least as reasonable for the trial court in this case to reject Pheffers claim that the income stated in his two-month-old application was outdated as it was for the court in Calcaterra to reject the husbands claim that his income had declined in the 22 months since he submitted his loan application.

Pheffers argument that the loan application should not have been considered because it included information about community property and his wifes separate property and income is also misplaced. The loan application designates Pheffer as the borrower and lists his individual income from his real estate brokerage business as $14,000 per month. No income is shown for his spouse, who is designated as the co-borrower.[7] Although the net worth figures contained in the application included Susannas separate property brokerage account, the application provides evidence Pheffer still had a net worth substantially exceeding Adamsons, even if the brokerage account is excluded and Susanna is deemed to have a community property interest in all of the other assets listed. We find no indication the trial court improperly relied on Pheffers spouses income or assets in finding a difference in the parties respective abilities to bear the fees in issue.

The court was not required to accept Pheffers explanation for the wide discrepancy between his income and expense declaration and his loan application submitted two months earlier. The court could infer from Pheffers failure to declare the value of his real and personal property in his declaration that he was being disingenuous about his income and assets, and that he was overstating the drop in his income since 2006. The court did not have to accept the figures set forth in Pheffers loan application at face value in order to conclude that Pheffer and Adamson were not in relatively equal positions with regard to litigation resources. The court stated on the record that it reviewed not only the loan application, but all of the pleadings pertaining to the motion for fees and the entire file in the case. Pheffer fails to persuade us that the court placed excessive or unwarranted reliance on the loan application.

C. Reasonable Necessity for the Award

Pheffer argues there was no showing an award of $10,000 was reasonably necessary under section 7605 because Adamson ultimately accepted most of Dr. Pickars recommendations without the necessity of holding the anticipated trial for which the fees had been sought.

Events occurring after the fee motion was decided and the notice of appeal was filed have no bearing on whether the trial court erred or abused its discretion in granting the motion. If later settlement obviated Adamsons need for fees, Pheffers remedy was by a way of a motion to modify the fee order.

At the time the motion was decided, the trial court had no reason to assume the parties to this protracted, highly contentious custody proceeding would settle their issues short of a trial. We also find nothing in the record to support Pheffers claims that the trial court awarded the fees as a sanction under section 271 or that Adamsons fee request was excessive. Based on the limited record before us, we cannot conclude that one side or the other was primarily responsible for the extent of the litigation that has gone on in this case.

There was a reasonable evidentiary basis for the trial court to find that (1) Pheffer had a greater relative ability to pay, (2) an award to Adamson was necessary to preserve her right to contest custody issues, and (3) the amount requested was reasonably necessary. The trial court did not abuse its discretion in granting Adamsons fee request.

III. DISPOSITION

The order appealed from is affirmed.

_________________________

Margulies, J.

We concur:

_________________________

Marchiano, P.J.

_________________________

Banke, J.

Publication courtesy of California pro bono legal advice.

Analysis and review provided by La Mesa Property line attorney.

San Diego Case Information provided by www.fearnotlaw.com

[1] A 2006 child support order determined Pheffers monthly income to be $28,933, and Adamsons monthly income to be $10,700.

[2] Pheffer married Susanna Fee in May 2007.

[3] All statutory references are to the Family Code.

[4] Section 2030, subdivision (a)(i) provides in pertinent part as follows: In a proceeding for dissolution of marriage, nullity of marriage, or legal separation of the parties, and in any proceeding subsequent to entry of a related judgment, the court shall ensure that each party has access to legal representation to preserve each partys rights by ordering, if necessary based on the income and needs assessments, one party . . . to pay to the other party, or to the other partys attorney, whatever amount is reasonably necessary for attorneys fees and for the cost of maintaining or defending the proceeding during the pendency of the proceeding. Subdivision (a)(2) specifies that the amount of any award is to be based on the respective incomes and needs of the parties, and any factors affecting the parties respective abilities to pay.

[5] Section 7605 is part of the Uniform Parentage Act ( 7600). Except for the description of the proceedings to which it applies, its language mirrors that found in section 2030. Subdivision (a) of section 7605 provides in relevant part as follows: In any proceeding to establish physical or legal custody of a child or a visitation order under this part, and in any proceeding subsequent to entry of a related judgment, the court shall ensure that each party has access to legal representation to preserve each partys rights by ordering, if necessary based on the income and needs assessments, one party . . . to pay to the other party, or to the other partys attorney, whatever amount is reasonably necessary for attorneys fees and for the cost of maintaining or defending the proceeding during the pendency of the proceeding. Subdivision (b) provides that the amount of any award is to be based on the respective incomes and needs of the parties, and any factors affecting the parties respective abilities to pay.

[6] Pheffers argument in his trial court opposition papers that no statute authorized a fee award did not preserve his present objection that the court applied the wrong statute.

[7] It is difficult to be sure from the record whether the co-borrower information was not required to be provided as part of the loan application, there was no co-borrower income to report because Susanna was not employed at the time of the loan application, or information concerning Susannas income was redacted because it was outside the scope of the subpoena. In any event, Pheffer fully informed the court about his wifes employment leave status and its effect on his household finances in his opposition pleadings and again in his counsels argument to the court.