Marriage of Rock and Kavalaris
Filed 3/19/13 Marriage of Rock and Kavalaris CA1/3
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
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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opinion has not been certified for publication or ordered published for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
THREE
In re the
Marriage of LINDA M. ROCK and JOHN A. KAVALARIS.
LINDA M. ROCK,
Respondent,
v.
JOHN A.
KAVALARIS,
Appellant.
A130093
(San Mateo County
Super. Ct.
No. FAM081572)
Appellant
John A. Kavalaris (Husband) appeals from a judgment entered on August 4, 2010 after a
dissolution action.
title="">[1] Husband challenges the trial court’s
resolution of his claim of breach of
fiduciary duty against his former wife Linda M. Rock (Wife). We affirm.
FACTUAL AND
PROCEDURAL BACKGROUND
Wife and Husband
were married in 1991, and had one child, who is now an adult. Wife also has three children from a prior relationship,
including an adult daughter Anza Neylon.
During the marriage, Wife managed a community business and Husband was a
salesman. In 1998, Anza Neylon relocated
to Hawaii and since then she has worked as an employee for the community
business in Hawaii. The parties
separated on May 15, 2004. Wife filed a
petition for dissolution on September 29, 2004.
Thereafter, Husband started a consulting business. In October 2006, the parties stipulated to
liquidate and equally distribute certain community stock accounts. In February 2007, the parties entered into a
stipulation in which Wife was awarded the community business and Husband was
awarded his consulting business.
A
bench trial was held on various dates in May, June and July, 2009 to resolve
the parties’ remaining claims. The
primary dispute at trial, and on appeal, concerns the community’s purported
interest in certain real properties located in Hawaii, referred to hereafter as
the Colony Club property and the Kuleana property. In 2001, the parties and Anza Neylon, agreed
to purchase the Colony Club property, using $58,000 of community funds for a
down payment and closing costs. However,
the Colony Club property was never purchased because Anza Neylon cancelled the
sales contract that she had signed in her name alone. Thereafter, with Husband’s knowledge but not
his consent, Wife unilaterally gave the community funds of $58,000 to Anza
Neylon who used a portion of those funds to purchase the Kuleana property in
her name alone. During this litigation
in 2005, Anza Neylon repaid the $58,000 to Wife. Wife testified she used the $58,000 to pay
primarily community business expenses.
Husband’s accountant testified the $58,000 did not appear as a loan on
the community business books and was used to pay Wife’s personal expenses.
In
its statement of decision and judgment, as amended in response to the parties’
requests for a statement of decision, the trial court made the following
findings: The trial court found Wife had
not breached her fiduciary duty to Husband by allowing the cancellation of the
purchase of the Colony Club property.
However, Wife had breached her fiduciary duty to Husband by her
unilateral loan of $58,000 of community funds to Anza Neylon, who used a
portion of the funds to purchase the Kuleana property. However, Wife was not found to have breached
her fiduciary duty to Husband by failing to include the community on the title
to the Kuleana property, by failing to request repayment of the $58,000 after
Anza Neylon’s refinancing of the Kuleana property (no requirement of a date
certain for repayment was established by evidence), or by failing to inform
Husband of the repayment of the $58,000 (albeit repayment information was
conveyed in the litigation process). The
trial court also found Wife had not breached her fiduciary duty to Husband by
falsifying employment verifications relating to Anza Neylon’s employment in the
community business as there was insufficient evidence to make a finding of
fraud.
The
trial court also rejected Husband’s argument that Wife and Anza Neylon acted
fraudulently by “conspir[ing] to pull off a ‘bait and switch’ – inducing him to
cooperate in a transaction to buy Colony Club with a down payment from
community funds.†The court found the
evidence did not support a finding of fraud:
“[Husband], by his own testimony, was an active participant in the
Colony Club process. He agreed with the
decision to purchase, talked to loan brokers and property inspectors. He was informed of the cancellation by Anza
Neylon within one (1) or two (2) days.
While [Husband] objected, evidently vociferously, he took no action to
revive the deal which he could have done since the only money invested at that
time was community property.[
name="_ftnref2" title="">[2]]
He called no-one to object or even investigate further the details of the
property inspection which [was] the stated reason for the cancellation. He waited almost 3 years before pursuing his
claim with the exception of one (1) request for information on Kuleana. [
[¶] Even more problematic, however, is that there is no evidence of collusion
between Anza Neylon and [Wife]. As trier
of fact, this judge is still unclear as to whether Anza Neylon took advantage
only of [her stepfather] or of both [Husband] and [Wife] in this case. [Anza Neylon’s] testimony is that she
requested the deposits in the Colony Club cancelled escrow be applied to
[Kuleana]. She did not appear to tell
[Wife] that. [Wife] had forwarded the
$58,000.00 to her. [Wife] did cooperate
with [Anza Neylon], against the wishes of [Husband], in applying the $58,000.00
to Kuleana. While they talked every day
and had both a personal and professional relationship, there is no direct
evidence that [Wife] participated in any scheme to set up a sham offer on
Colony [Club] so Anza Neylon could buy Kuleana.
There is no lost investment opportunity to the community or any
investment of which [Husband] [was] unaware – he was informed throughout the
whole process of purchase so restitution for Colony Club is not an issue. [¶]
. . . Here, there is insufficient evidence of fraud as to the Colony
Club transaction, and no fraud as to the Kuleana transaction. [Wife] was quite transparent with [Husband]
about her intent to transfer the money to Anza Neylon for her use in Kuleana,
despite [his] objections.â€
However,
the trial court found that Husband was entitled to damages for the Wife’s
“unauthorized, in fact objected to, transfer of $58,000.00 to . . .
Anza Neylon, which [was] used for Kuleana.
[Wife] asked [Husband] to participate in a loan to Anza Neylon. [He] refused.
[Wife] loaned the money anyway, variously characterizing it as a
business or personal loan. It would be
inequitable to allow her to characterize it as a business loan and thus claim
the protection of Family Code [section] 1100[, subdivision] (d). Among other things, [Wife] did not account
for the loan in any business balance sheets and so is deprived of that argument
on a technical basis.[
name="_ftnref4" title="">[4]]
In effect, [Wife] allowed her daughter, Anza Neylon, to keep $58,000.00 from a
transaction [Husband] agreed to (Colony Club) for a transaction which he
objected to (Kuleana). Under Family Code
[section] 1101[, subdivision] (g) Husband is entitled to an award of 50 percent
of the asset transferred (i.e. 50 percent of $58,000.00) plus fees and court
costs.â€
The
trial court also found that Husband was entitled to attorney fees and costs,
pursuant to Family Code section 1101, subdivision (g), which was set at
$200,000. “In arriving at the amount of
$200,000.00 for attorney’s fees and costs, the Court notes that this issue is a
troublesome one. [Husband] has incurred
fees of approximately $364,000 of which he alleges 95% is due to the breach of
fiduciary duty claim. Where, one must
ask, is the economy in spending $364,000.00 to recover $29,000.00? Clearly, from the testimony, [Wife] and her
daughter resisted discovery. [Wife]
herself failed to return the $58,000.00 for several years, and then sought
further to deny reimbursement to the community, by allocating it to pay off her
personal bills. [Wife’s] stories changed
as the case progressed on the issue of characterization of the payment to Anza
Neylon. While [Wife’s] credibility is
seriously damaged, [Husband], too, was less than credible in his attempt to
soft-pedal his involvement in the Colony Club transaction. His transparent need to increase his damage
request to offset [Wife’s] equity from the family residence and allow his
continued possession of it drove the case into the stratosphere. Given a consideration of all these factors,
the award of attorney fees under Family Code [section] 1101[, subdivision] (g)
is $200,000.â€
title="">[6]
A
final judgment was entered on August 4, 2010.
The trial court denied Husband’s postjudgment motion seeking, among
other things, to vacate the judgment or for a new trial. Husband filed a timely appeal from both the
judgment and the order denying his motion
for postjudgment relief.
DISCUSSION
Breach of Fiduciary Duty Claim Against Wife
“Under Family Code
sections 721 and 1100, spouses have fiduciary duties to each other with respect
to the management and control of community property. (Fam. Code, §§ 721, subd. (b), 1100,
subd. (e).)†(In re Marriage of Hokanson (1998) 68 Cal.App.4th 987, 992.) Family Code section 1101 provides, in
pertinent part: (a) A spouse has a claim
against the other spouse for any breach of the fiduciary duty that results in
impairment to the claimant spouse’s present undivided one-half interest in the
community estate, including, but not limited to, a single transaction or a
pattern or series of transactions, which transaction or transactions have
caused or will cause a detrimental impact to the claimant spouse’s undivided
one-half interest in the community estate. [¶] (b) A court may order an
accounting of the property and obligations of the parties to a marriage and may
determine the rights of ownership in, the beneficial enjoyment of, or access
to, community property, and the classification of all property of the parties
to a marriage. [¶] . . . [¶] (g) Remedies for breach of the
fiduciary duty by one spouse . . . shall include, but not be limited
to, an award to the other spouse of 50 percent, or an amount equal to 50
percent, of any asset undisclosed or transferred in breach of the fiduciary
duty plus attorney’s fees and court costs.
The value of the asset shall be determined to be its highest value at
the date of the breach of the fiduciary duty, the date of the sale or
disposition of the asset, or the date of the award of the court. [¶] (h)
Remedies for the breach of the fiduciary duty by one spouse . . .
when the breach falls within the ambit of Section 3294 of the Civil Code [
shall include, but not be limited to, an award to the other spouse of 100 percent,
or an amount equal to 100 percent, of any asset undisclosed or transferred in
breach of the fiduciary duty.†(Fam.
Code, § 1101, subds. (a), (b), (g), (h).)
In his reply
brief, Husband essentially concedes there was substantial evidence supporting
the trial court’s findings, by “clear and convincing evidence,†that Wife had
not breached her fiduciary duty to him regarding the cancellation of the Colony
Club purchase and the subsequent purchase of the Kuleana property by Anza
Neylon.
committed prejudicial error by not considering certain evidence that would have
supported findings that Wife had breached her spousal fiduciary duty by her
conduct after the purchase of the Kuleana property, including, among other
things, providing false income verifications that allowed Anza Neylon to
refinance the mortgage on the Kuleana property and later purchase the Kona
property. We disagree.
Contrary
to Husband’s contentions, whether any of Wife’s conduct after the purchase of
the Kuleana property constituted breaches of spousal fiduciary duty were
questions of fact to be resolved by the trial court. By its ruling the trial court implicitly
found that except for certain conduct expressly found to be breaches, Wife’s
other conduct did not constitute breaches that caused damage to Husband’s
undivided one-half interest in the community estate. (Fam. Code, § 1101, subd. (a).) As an appellate court, “[i]t is not our task
to weigh conflicts and disputes in the evidence. . . .†(Duffy
v. Cavalier (1989) 215 Cal.App.3d 1517, 1539.) “Our authority begins and ends with a
determination as to whether, on the entire record, there is
or uncontradicted, in support of the judgment.
Even in cases where the evidence is undisputed or uncontradicted, if two
or more different inferences can reasonably be drawn from the evidence this
court is without power to substitute its own inferences or deductions for those
of the trier of fact, which must resolve such conflicting inferences in the
absence of a rule of law specifying the inference to be drawn. We must accept as true all evidence and all
reasonable inferences from the evidence tending to establish the correctness of
the trial court’s findings and decision, resolving every conflict in favor of
the judgment. [Citations.] [¶] We
emphasize that the test is not the
presence or absence of a substantial conflict in the evidence. Rather, it is simply whether there is
substantial evidence in favor of the respondent. If this ‘substantial’ evidence is present, no
matter how slight it may appear in comparison with the contradictory evidence,
the judgment must be upheld.†(
“ ‘reassess the credibility of witnesses.’ †(In re
Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1531.) Concededly, the trial court here found Wife’s
credibility had “come[ ] up short†in her proffered testimony as to her conduct
after the purchase of the Kuleana property.
trier of fact may accept part of the testimony of a witness and reject another
part even though the latter contradicts the part accepted. [Citations.]â€
(Stevens v. Parke, Davis & Co.
(1973) 9 Cal.3d 51, 67.) “[N]either
conflicts in the evidence nor ‘ “testimony which is subject to justifiable
suspicion . . . justif[ies] the reversal of a judgment, for it is the
exclusive province of the [trier of fact] to determine the credibility of a
witness and the truth or falsity of the facts upon which a determination
depends.†’ [Citation.]†(Oldham
v. Kizer (1991) 235 Cal.App.3d 1046, 1065.)
These rules “will obtain even though to some triers of fact the evidence
in the instant case would have seemed so improbable, impossible and
unbelievable that a judgment contrary to that now on appeal would have
inevitably followed.†(
253, 254.)
Husband
also argues he is entitled to a new trial because the trial court used a
legally incorrect measure of damages. He
specifically argues that the proper amount of damages must be predicated on
either “the current value of the Colony Club property†(as he requested in the
trial court), or “the lost profits wrongfully taken for the†Kuleana and Kona
properties (as he requests for the first time on appeal.) We disagree.
Civil Code section 3333 provides that “[f]or the breach of an obligation
not arising from contract, the measure of damages, except where otherwise
expressly provided by this code, is the amount which will compensate for all
the detriment proximately caused thereby, whether it could have been
anticipated or not.†Assuming that Civil
Code section 3333 applies in a marital dissolution proceeding, “[i]t is within
the sound discretion of the trier of fact to select the formula most
appropriate to compensate the injured party.â€
(United States Liab. Ins. Co. v.
Haidinger-Hayes, Inc. (1970) 1 Cal.3d 586, 599.) Here, the trial court chose to award damages,
pursuant to Family Code section 1101, subdivision (g), limited to Husband’s
undivided one-half interest in community funds of $58,000 that had been
unilaterally given to Anza Neylon by Wife over Husband’s express objection. By its ruling the trial court found Husband
had failed to demonstrate that the Wife’s conduct had otherwise
“ ‘cause[d]’ a detrimental impact to [Husband’s] undivided one-half
interest in the community estate.†(Fam.
Code, § 1101, subd. (a).) Instead,
the trial court ruled that Wife’s breaches of spousal fiduciary duty required
her only to account and reimburse the community estate one-half of
$58,000. Husband relies on appellate
decisions which have upheld damage awards where the factual situations
presented allowed the trial courts to arrive at their conclusions. (See, e.g., In re Marriage of McTiernan & Dubrow (2005) 133 Cal.App.4th
1090, 1102-1103; In re
34, 40-43; In re Marriage of Quay
(1993) 18 Cal.App.4th 961, 971-973.)
However, on appeal, we do not review the record for substantial evidence
that would support a greater award of damages, as Husband suggests. Rather, our authority is only to determine
whether there is substantial evidence supporting the judgment. “If this ‘substantial’ evidence is present,
no matter how slight it may appear in comparison with the contradictory
evidence, the judgment must be upheld.â€
(Howard v. Owens Corning, supra, 72
Cal.App.4th at p. 631.) “
of no consequence that the [trier of
fact] believing other evidence, or
drawing other reasonable inferences, might have reached a contrary conclusion. [Citations.]â€
(Bowers v. Bernards (1984) 150
CalApp.3d 870, 874.)
The
overarching premise of Husband’s appellate arguments appears to be that the
trial court should have found that (a) the community had acquired an ownership
interest in the Kuleana property because Wife had promised that the community
would be “silent investors†in that property and community funds had been used
to purchase that property; and (b) the community had acquired an ownership
interest in the Kona property because community funds had been used to purchase
that property. However, as we now
discuss, the trial court reasonably found that Wife had not breached a
fiduciary duty to put the community on the title to the Kuleana property. Additionally, the use of community funds to
purchase the Kuleana and Kona properties was insufficient to establish that
there was an agreement between spouses and Anza Neylon that the community would
have an ownership interest in those properties.
Both
the Kuleana and Kona properties were owned by Anza Neylon alone; neither Wife
nor Husband was named on the title documents of those properties. Thus, Anza Neylon is both the legal owner and
the presumed “owner of the full beneficial title†of the properties. (Evid. Code, § 662.) The presumption of title “can be overcome
only by evidence of an agreement or understanding between the parties that the
title reflected in the deed is not what the parties intended. [Citations.]
[And,] [s]ignificantly, ‘the presumption cannot be overcome solely by
tracing the funds used to purchase the property . . . .’ [Citations.]â€
(In re Marriage of Brooks &
Robinson (2008) 169 Cal.App.4th 176, 189-190.) Applying these rules, we conclude the trial
court could reasonably find that Anza Neylon’s use of community funds to
purchase the Kuleana and Kona properties was insufficient to establish that the
community had acquired an ownership in those properties. As to any agreement between the spouses and
Anza Neylon, the trial court’s implicit ruling that there had been no agreement
or understanding according the community an ownership interest in the Kuleana
property was supported by substantial evidence.
At trial Husband conceded he never had an agreement with Anza Neylon
that the community would have an ownership
interest in the Kuleana property and he admittedly refused to consent to
the use of community funds to purchase the Kuleana property. Nevertheless, he believed the community had
acquired an ownership interest in the property because Wife had promised that
the spouses would be “silent 50/50 investors†in that property. However, there was no evidence that either
Wife or Anza Neylon held a similar belief regarding the ownership of the
Kuleana property. Wife specifically
testified that her offer that the community acquire an ownership interest in
the Kuleana property was rejected by Husband.
Anza Neylon also understood she was the sole owner of the Kuleana
property as she never gave an accounting to either spouse regarding her use of
the $58,000 and apparently secured subsequent refinancing of that property
without seeking the spouses’ consent believing that she had no responsibility
other than to repay $58,000. Thus, the
trial court could reasonably find Husband’s “unilateral belief†was
insufficient to establish that the spouses and Anza Neylon had entered into an
agreement or understanding that accorded the community an ownership interest in
the Kuleana property. (
the trial court should have held Wife to her promise that the community would
have an ownership interest in the Kuleana property because “[a] promise is a
promise whether or not one party agrees with the other terms of an
offer . . . .†The
trial court was free to find that Husband’s rejection of Wife’s offer relieved
Wife of her promise to have the community acquire an ownership interest in the
Kuleana property. Given Husband’s
admissions that he had been told about the cancellation of the Colony Club
purchase and the use of community funds to purchase the Kuleana property, we cannot say the
testimony of Wife and Anza Neylon regarding the circumstances surrounding those
events was “inherently improbable or clearly false.†(Linear
Technology Corp. v. Tokyo Electron, Ltd. (2011) 200 Cal.App.4th 1527,
1534.) Concededly, “[t]he form of title
presumption does not apply when it conflicts with the presumption of undue
influence by one spouse over the other.
[Citations.]†(
Marriage of Brooks & Robinson, supra, 169 Cal.App.4th at p. 190,
fn. 8.) Here, however, the trial
court could reasonably find there was no evidence demonstrating that the title
of the properties in Anza Neylon’s name alone was due to any undue influence
exerted by Wife over Husband that “caused . . . a detrimental impact
to [Husband’s] undivided one-half interest in the community estate.†(Fam. Code, § 1101, subd. (a).) Husband admittedly was told that Anza Neylon
was purchasing the Kuleana property for herself and that Wife was giving
community funds of $58,000 to Anza Neylon for the purchase of that
property. Consequently, we reject
Husband’s argument that the trial court abused its discretion in failing to
award him either 50 or 100 percent of the equity in any of the Hawaiian
properties (Colony Club, Kuleana, Kona) as if the community had acquired an
ownership interest in those properties.
Court’s Award of Attorney Fees and Costs to Husband
In his trial brief
dated May 7, 2009, Husband asserted he had incurred attorney fees and costs of
$175,603, payable only to his then current and now former counsel, through
April 10, 2009, and not including much of the work done in preparation for
trial. He asked the trial court to
direct Wife to contribute “$200,000 for his attorney fees and costs, including
his expert witness fees,†in pursuing his breach of fiduciary claim against
her.
At
the trial Husband’s counsel submitted statements for attorney fees and costs
showing that from October 10, 2006 through June 10, 2009, Husband had incurred
attorney fees and costs totaling $286,890.02, consisting of $240,943 for
attorney fees, miscellaneous costs of $8,636.92, expert witness fee of
$23,258.50, and costs of $14,051.60, which represented expenses incurred in
arranging to depose Anza Neylon in Hawaii.
In closing argument on July 14, 2009, Husband’s counsel argued that “declarations
will show and the bills showâ€
name="_ftnref10" title="">[10]
that Husband “has spent in excess of $364,000†in attorney fees and costs of
which he claimed 95 percent “was dedicated to the†breach of fiduciary
claim.
In
its judgment the trial court awarded Husband the sum of $200,000 as attorney
fees and costs. In his postjudgment
request for a new trial, Husband, representing himself, challenged the award of
attorney fees and costs, arguing that the trial court should amend its judgment
or hold a new hearing on the matter “based on the testimony given at trial
regarding the amount and reasonableness of the actual fees incurred and paid
for by husband, i.e. $374,300 and can now be proven to be $409,000.†On appeal, Husband now argues that “[to] his
damage, he was forced to spend $425,000 in legal fees and costs searching for
his true share of the community estate.â€
B. Analysis
We review the
trial court’s award of attorney fees and costs for an abuse of discretion. “ ‘When the trial court substantially
reduces a fee or cost request, we infer the court has determined the request
was inflated.’ [Citation.]†(Doppes
v. Bentley Motors, Inc. (2009) 174 Cal.App.4th 967, 998.) “The ‘ “experienced trial judge is the
best judge of the value of professional services rendered in his court, and
while his judgment is of course subject to review, it will not be disturbed
unless the appellate court is convinced that it is clearly wrong.†’ [Citation.]â€
(Ketchum v. Moses (2001) 24
Cal.4th 1122, 1132.) Here, we cannot say
the trial court was clearly wrong in its award of $200,000 for attorney fees
and costs.
The
trial court awarded Husband about 55 percent of attorney fees and costs of
$364,000, instead of 95 percent requested by Husband. In reducing the award, the trial court
considered that after discovery in 2005, Husband was aware that the community
estate had not acquired any ownership interest in any of the Hawaiian
properties at issue – namely, the Colony Club, Kuleana, and Kona
properties. Contrary to Husband’s
argument, the community did not acquire an ownership interest in the Kuleana or
Kona properties merely because Wife could not establish that the community
funds she gave to Anza Neylon were her separate property from her portion of
the earnings of the community business.
However, because Wife resisted reimbursing the community the $58,000 and
contended the funds had been used to pay community expenses, Husband was
required to pursue his claim for reimbursement at trial. We see nothing unreasonable about the trial court’s
award of about $154,000 in attorney fees plus about $46,000 as costs for
discovery and the expert witness fee to pursue the breach of fiduciary
claim. Additionally, we see nothing
unreasonable about the trial court’s comment that Husband’s “soft-pedal†of his
involvement in the Colony Club property caused the attorney fees and costs to
be unnecessarily increased “into the stratosphere.†The comment was apparently based on the trial
court’s findings that Husband admittedly knew the Colony Club property purchase
had been cancelled and yet he had sought to recover damages as if the spouses
had acquired an interest in that property; that Husband admittedly knew that
Wife had given $58,000 to Anza Neylon for the purchase of Kuleana property in
Anza Neylon’s name alone, and that none of Wife’s conduct after the purchase of
the Kuleana property had caused any monetary damage to Husband’s undivided
one-half interest in the community estate.
Anza Neylon had repaid the $45,000 within 30 days of receipt of those
funds from Wife. Although Anza Neylon
also repaid the $58,000, the trial court required Wife to reimburse the
community estate one-half of those funds because they were traceable to Wife’s
payment of personal expenses and not community expenses. Contrary to Husband’s contention, the trial court
was not required to accept his counsel’s argument regarding the allocation of
attorney fees and costs attributed to his breach of fiduciary duty claim. Even after the reduction, the award of
attorney fees and costs ($200,000) was about seven times the amount Husband
recovered in damages ($29,000). On this
record, we cannot conclude the trial court abused its discretion or otherwise
rendered an award that was unreasonable or inadequate.
Request for Sanctions in Trial Court and Wife’s Request for
Sanctions and Attorney Fees on Appeal
Husband contends
the trial court erred in failing to award him sanctions based on Wife’s failure
to comply with financial disclosure requirements during the dissolution
proceeding. He specifically contends
that such an award is authorized in Family Code section 271, which reads, in
pertinent part: “(a) Notwithstanding any other provision of this code, the
court may base an award of attorney’s fees and costs on the extent to which the
conduct of each party or attorney furthers or frustrates the policy of the law
to promote settlement of litigation and, where possible, to reduce the cost of
litigation by encouraging cooperation between the parties and attorneys. An award of attorney’s fees and costs
pursuant to this section is in the nature of a sanction. In making an award pursuant to this section,
the court shall take into consideration all evidence concerning the parties’
incomes, assets and liabilities. The
court shall not impose a sanction pursuant to this section that imposes an
unreasonable financial burden on the party against whom the sanction is
imposed. In order to obtain an award
under this section, the party requesting an award of attorney’s fees and costs
is not required to demonstrate any financial need for the award. [¶] (b) An
award of attorney’s fees and costs as a sanction pursuant to this section shall
be imposed only after notice to the party against whom the sanction is proposed
to be imposed and opportunity for that party to be heard.â€
At
trial Husband did not seek Family Code section 271 sanctions against Wife in
either his trial brief or his closing argument after the trial. He sought only attorney fees and costs
pursuant to Family Code section 1101 for the Wife’s breach of fiduciary
duty. During
that attorney fees and costs incurred to prove the fiduciary breaches were so
high because it was difficult to get an honest answer from Wife and it was “nine
times as difficult†to get credible information even in the course of
discovery. [Husband] had to file two
motions to join [Anza Neylon]. We know
[Wife] could have readily obtain[ed] the information we were seeking from Anza
[Neylon] her daughter. Instead,
[Husband] had to retain an Hawaii attorney.
We have had to have subpoenas issued in Hawaii. We had to get all the proper legal
arrangements to have her deposition taken in Hawaii and she didn’t show
up. This was a very expensive case for
[Husband] admittedly but not by his doing.â€
Husband sought an award of 50 percent of attorney fees incurred “given
. . . all of the hoops that [Husband] had [to] go to in attorney fees
trying to get to the bottom of this.†It
is only in his postjudgment motion for relief that Husband first mentions
Family Code section 271 in the context of an argument that the court should
either award more attorney fees and costs for the pursuit of his breach of
fiduciary duty claim or hold a new hearing on the issue. After a hearing, the trial court denied
Husband’s request for postjudgment relief without comment. We see no prejudicial error requiring
reversal. The trial court could have
found that the issue of sanctions, as distinct from attorney fees and costs to
pursue the breach of fiduciary duty claim, had not been set forth in a manner
that put Wife on notice to expressly respond to a request for sanctions
pursuant to Family Code section 271.
Also, because Husband made no specific request for Family Code section
271 sanctions at the hearing on the postjudgment motion, we cannot say the
trial court abused its discretion in disregarding the issue.
DISPOSITION
The
judgment is affirmed. Respondent Linda
M. Rock is awarded costs on appeal.
_________________________
Jenkins,
J.
We concur:
_________________________
Pollak, Acting P. J.
_________________________
Siggins, J.
name="_ftn1" title="">[1] The appeal also brings up for review
the denial of the Husband’s motion, pursuant to Code of Civil Procedure
sections 657 and 662, seeking, among other things, to modify the judgment or
for a new trial.
a legal basis that required him to seek to revive the contract to purchase the
Colony Club property in order for his damages for breach of fiduciary duty to
be valued by that lost investment opportunity.
The court replied that its reference to Husband’s failure to
“ ‘resuscitate’ †the cancelled Colony Club purchase “was a reference
to Husband’s attitude toward the investment and went to his credibility not to
damages.â€
