Marriage of Turner



















Filed 1/28/13 Marriage of Turner CA4/3















NOT TO BE PUBLISHED IN OFFICIAL REPORTS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opinion has not been certified for publication or ordered published for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



FOURTH APPELLATE
DISTRICT



DIVISION THREE




>

In re Marriage of KATHRIN and NOEL TURNER.
KATHRIN TURNER, Respondent, v. NOEL TURNER, Appellant.	G045973 (Super. Ct. No. 10D010712) O P I N I O N

Appeal from a
postjudgment order of the Superior Court
of Orange County,
Theodore R. Howard, Judge. Reversed.

Law Offices of Brian G.
Saylin and Brian G. Saylin for Appellant.

No appearance for
Respondent.

*
* *



In this marital
dissolution case, Noel Turner (husband) challenges the court’s pendente lite
award of attorney fees and costs to Kathrin Turner (wife).href="#_ftn1" name="_ftnref1" title="">[1] Because the court failed to make the
statutorily mandated finding on whether husband had the ability to pay the fees
and costs of both parties, we reverse.



FACTS



Husband and
wife were married in November 1994 and have two minor children. In November 2010, wife petitioned for
dissolution of the marriage.

On December 9,
2010, wife applied for an order to show cause (OSC) and ex parte temporary
orders seeking, inter alia, child and spousal support of $40,000 per month
(based on monthly household expenses of at
least $40,000 per month), as well as a “preliminary contribution” of
$50,000 in attorney fees and $20,000 for a forensic accountant. Wife declared that during the year from
October 2009 to October 2010, approximately $17 million had been deposited into
their personal bank account. She did not
believe she and husband were earning any less money now, but did not know where
the money was being deposited. She
declared that husband runs the family business, Turner New Zealand, which
imports meats and seafood from New Zealand,
and that an additional company called Moxxor distributes an Omega-3
supplement. She declared she and husband
owned many businesses, in California,
Germany and New
Zealand, but she did not know how much they
were worth or much they earned.

In response to the ex parte request, husband
declared wife was in possession of $63,000 (most of which he had given
her). He “vehemently” disputed wife’s
allegations of earnings, declaring, “This country is in a recession and it cuts
across the board. I have no monies to
fund her. She doesn’t say why she
doesn’t use some of the $100,000 in her possession.” He asked that the attorney fees and forensic costs
issue be deferred to the hearing on the OSC.
The hearing was set for January
20, 2011.

In reply, wife
acknowledged she had $60,000, but stated the monthly household expenses were
$40,000. She declared it was her
understanding that husband had depleted the bank account into which $17 million
had been deposited, but that husband had several other bank accounts.

Judge Clay M.
Smith made temporary orders awarding wife the exclusive use of the family home
and a 2010 Jaguar.

The appellate
record does not disclose the date on which the hearing on wife’s OSC actually
commenced. But the reporter’s transcript
for April 22, 2011,
reflects some judicial frustration with the pace of the proceeding. Judge Theodore R. Howard (to whom the case
had been assigned) observed that this was now the seventh day of what had been
estimated to be a five-hour hearing.href="#_ftn2" name="_ftnref2" title="">[2] The court stated that on the previous day, it
had expressed its concern that discovery was being conducted during trial. Nonetheless, the court allowed the chief
financial officer (Derek Poon) of husband’s business entities to be called out
of order as a witness in husband’s case-in-chief (during wife’s presentation of
her case). Poon testified for over 120
reporter’s transcript pages about the earnings and income of the entities, as
well as credit card accounts. When Poon
finished testifying, wife’s counsel would not agree to Poon’s excusal as a
witness because wife’s counsel had not received documents subpoenaed from Poon,
and therefore could not question Poon about them. Husband’s counsel stated he had brought the
documents on a Compact Disk; the court observed that while the Compact Disk
might have been satisfactory during discovery, it was of no use to wife’s counsel
here in trial.

The
court concluded the case was approaching one of two outcomes: (1) a mistrial, or (2) the court appointing
an Evidence Code section 730 evaluator or a special master “to go
through all of this and try to determine where the money is [or] if there’s any
money.” The court noted wife had
possibly failed to account for business-related expenses in calculating the
money available for support, but that husband had perhaps not included in his
calculation some payments made for the parties’ benefit. The court noted husband was not paying the
court-ordered temporary support on grounds he had no money to make the
payments. The court reminded wife’s
counsel that wife bore the burden of proof to show husband’s ability to pay. The court suggested referring the case to a
referee and two accountants to determine what money was available for
support. Wife’s counsel expressed
frustration about the delay such an appointment would cause, arguing that wife
had not received an attorney fee award or any support payments from husband,
while money was being spent to support husband.
The court replied that if the evidence showed husband had concealed
assets, wife would have “incredible” remedies under Family Code section 271. Wife’s counsel agreed. The court stated this would be among the issues
that the referee or special master would “ferret out.”

Wife’s
counsel argued that husband’s counsel had been paid about $60,000 to date and
that wife was entitled to “a fair playing field.” The court stated, “Well, I have no problem
making an interim order for the payment of counsel and expert fees at this
point in time.” The court stated wife
was entitled to an interim award of attorney fees “to level the playing field
in view of the apparent circumstance that [husband’s counsel] and his team have
been paid . . . $86,000 to this point.”

But
the court refused to make a temporary support order beyond the temporary
support order already in effect until it received the referee’s report, noting
that husband had not yet presented his case other than the testimony of Poon,
who had been called out of order.

Ultimately,
the court ordered husband to pay wife $70,000 in attorney’s fees to “level the
playing field” and “equalize the access” “to the legal process.” Husband’s counsel asked the court whether the
order was “without prejudice to deal with the issue of allocation of fees at
the time of trial.” The court replied,
“This order is always of that nature because I don’t have the full information. I can’t make [a Family Code section] 4320
analysis at this time . . . as I am required to do on any
final order of attorney’s fees.”

The
court stated the order was payable forthwith.
Husband’s counsel asked, “How could he pay that forthwith?” The court replied, “Right now I’m not going
to deal with that issue. I do not have
the evidence in this case as you’ve already pointed out.” Husband’s counsel stated, “That’s why I don’t
think the court should make that order now.”
The court replied, “You got paid.
And that’s all I know. Not only
did you get paid but your expert got
paid . . . $6,000.
So that’s the state of the evidence that’s been presented to me by your
witness.”

The
court continued the matter to May 4, 2011 to hear husband’s evidence, since
husband had not yet put on his case with the exception of Poon, who had been
called out of order. At the May 4, 2011
hearing, Poon again testified, this time for over 100 reporter’s transcript
pages. Husband’s forensic accountant had
received about $21,000.

The
court stated it had already made at least a partial order on attorney fees and
anticipated it would decide the matter of costs that day. The court then stated, “The other matter has
to do with the spousal and child support.
The court finds that the evidence is so convoluted and
byzantine . . . as to the finances of these parties that
the court is going to order” an Evidence Code section 730 investigation
concerning the cash or the equivalent available for spousal and child
support. The court continued the hearing
pending its receipt of the Evidence Code section 730 report.

The
court then addressed who would pay the Evidence Code section 730 expert
and estimated that the expert’s initial retainer fee would be about
$10,000. The parties agreed to list a
commercial building for sale to raise the necessary funds. But wife’s counsel stated the property was
worth several million dollars and might take a year or more to sell. Wife’s counsel argued husband should pay the
$10,000, but the court stated, “I’m told they don’t have the money.” The court asked Poon whether he knew of a
“spare” $10,000 available from the entities or husband’s personal finances to
pay the expert’s retainer fee. Poon
replied he did not. The issue of the
obtaining the necessary $10,000 retainer fee was settled when the parties
agreed to list the commercial building for rent, in addition to for sale. When wife’s counsel alleged husband’s company
had been making other payments, the court noted that part of the problem was
that it had not given husband’s counsel the opportunity to present his
evidence. The court asked why wife had
not sought a contempt hearing.

The
court awarded wife $20,000 in accountant’s fees. The court stated, “Since I’m spending money
[husband] says he doesn’t have, why not[?]”
The court stated the reason for the award was that more forensic work is
required of the petitioning party than the responding party since the
petitioner bears the burden of proof, and that husband’s accountant had been
paid $21,000 so far compared to $5,000 paid to wife’s accountant.

Wife’s
counsel stated for the record what he believed the evidence already presented
did show for purposes of calculating support.
On that basis, wife’s counsel objected to the court’s ordering of an
Evidence Code section 730 investigation.

The
court stated it did not have enough information to make a finding as to whether
there was money available to pay for the Evidence Code section 730
investigation.

Husband’s
counsel requested a statement of decision, including findings on the earnings
income of both parties. Husband’s
counsel observed (and the court confirmed) that because the court had suspended
the hearing (pending receipt of the Evid. Code, § 730 report), husband had
yet to put on his case in defense (other than the testimony of Poon).

On
August 31, 2011, the court finally made its orders, inter alia, awarding wife
the $70,000 in pendente lite attorney fees and $20,000 for a forensic
accounting expert. The court issued
written findings that (1) it found the finances and businesses were convoluted
and therefore ordered an Evidence Code section 730 investigation into the
available cash flow, or equivalent, for purposes of calculating spousal and
child support, and (2) the “court makes no findings nor orders regarding the
payment of the retainer for the Evidence Code [section] 730
investigation.” It made no findings
regarding husband’s ability to pay the ordered $90,000 in fees and costs.



DISCUSSION



Husband
contends the court failed to comply with the mandates of Family Code sections
270, 2030, and 2032, when it ordered him to pay $90,000 of wife’s pendente lite
attorney fees and accountant costs.href="#_ftn3"
name="_ftnref3" title="">[3]

A review of the Family
Code statutes that govern need-based attorney fee awards in marital dissolution
cases reveals the court did fail to follow the statutes’ mandates. Section 270 applies to all awards of attorney
fees and costs under the Family Code and states: “If a court orders a party to pay attorney’s fees
or costs under this code, the court shall first determine that the party has or
is reasonably likely to have the ability
to pay.” (Italics added.) Other Family Code statutes apply specifically
to attorney fee awards in marital dissolution proceedings. Section 2030 authorizes awards in dissolution
cases. Section 2032 prescribes
additional requirements for section 2030 awards. Section 4320 (referenced in § 2032, subd.
(b)) sets forth the “circumstances” to be considered by a court, to the extent
relevant.

Under
section 2030, a court must “ensure that each party has access to legal
representation” during the pendency of a marital dissolution
proceeding by ordering one party to pay the other party’s reasonably
necessary attorney fees and costs, “if necessary based on the income and needs
assessments.” (Id., subd. (a)(1).) When a
party requests attorney fees and costs, the court must make the following
findings: (1) whether an award of
attorney fees and costs is appropriate; (2) whether there is a disparity
in access to funds to retain counsel; and (3) whether one party is able to pay
for legal representation of both parties.
(§ 2030, subd. (a)(2).) “If
the findings demonstrate disparity in access and ability to pay, the court
shall make an order awarding attorney’s fees and costs.” (Ibid.) Section 2030 applies to pendente lite awards;
the statute specifies that the court must ensure that each party has access to
representation, “including access early in the proceedings.” (§ 2030, subd. (a)(1).)

Section
2032 controls and supplements section 2030.
Section 2032 permits a court to make an award of attorney fees and costs
under section 2030 where “the making of the award, and the amount of the
award, are just and reasonable under the relative circumstances of the
respective parties.” (§ 2032, subd.
(a).) Section 2032 further provides, “In
determining what is just and reasonable under the relative circumstances, the
court shall take into consideration the need for the award to enable each
party, to the extent practical, to have sufficient financial resources to
present the party’s case adequately, taking into consideration, to the extent
relevant, the circumstances of the respective parties described in Section
4320.” (Id., subd. (b).) As to the
source of the payment, the “court may order payment of an award of attorney’s fees
and costs from any type of property, whether community or separate, principal
or income.” (Id., subd. (c).)

Section 4320
(referenced in § 2032, subd. (b)) sets forth the “circumstances” to be
considered by the court, if relevant.
Those circumstances include the supporting party’s ability to pay. (§ 4320, subd. (c).)

“In assessing
one party’s need and the other’s ability to pay, the court may consider
evidence of the parties’ current incomes, assets, and earning abilities.” (In re
Marriage of Rosen (2002) 105 Cal.App.4th 808, 829.) In calculating a party’s ability to pay, a
court should consider that party’s obligations and expenses, such as for
spousal and child support and the party’s need to pay his or her own legal
fees. (In re Marriage of Keech (1999) 75 Cal.App.4th 860,
867-868.) The party moving for a fee
award bears the burden of establishing his or her need for the money in light
of the parties’ relative financial positions.
(In re Marriage of Falcone &
Fyke (2008) 164 Cal.App.4th 814, 824.)

A
pendente lite attorney fee award is reviewed for abuse of discretion. (In re
Marriage of Keech, supra, 75
Cal.App.4th at p. 866.) But “[w]hile the
family court has considerable latitude in fashioning or denying an attorney
fees award, its decision must reflect an exercise of discretion and a
consideration of the appropriate factors as set forth in code sections 2030 and
2032.” (In re Marriage of Tharp (2010) 188 Cal.App.4th 1295, 1313-1314; see
also Alan S. v. Superior Court (2009)
172 Cal.App.4th 238, 242.) Furthermore,
a court may not base the dollar
amount of an award solely on the attorney fees paid by the non-applicant spouse
for his or her own representation. (>In re Marriage of Keech, at pp.
869-870.) The amount expended by husband
for his own fees “does little more than allow informed speculation that the
court decided to require husband to pay at least as much for wife’s attorney
fees as he did for his own. That is not
the standard by which the court was to determine the amount of the award.” (Ibid.)

On appeal, husband bears
the burden of proving the court abused its discretion by awarding wife attorney
fees and costs. (In re Marriage of Lopez (1974) 38 Cal.App.3d 93, 114,
disapproved on a different point in In re
Marriage of Morrison (1978) 20 Cal.3d 437, 453.) Husband has met his burden by showing that
the court failed to make the statutorily mandated findings. “If a court orders a party to pay attorney’s
fees or costs under this code, the court shall
first determine that the party has or is reasonably likely to have the ability
to pay.” (§ 270, italics
added.) Here, the court could not
determine whether husband had any funds available to make payments. The court found the evidence was so
convoluted that an Evidence Code section 730 evaluation was necessary to
sort it out. The court expressly made no
findings regarding the payment of the expert’s $10,000 retainer fee.

In In re Marriage of Rosen, supra,
105 Cal.App.4th at pages 814-815, this court reversed a trial court’s spousal
and child support award because the trial court calculated spousal support
based on the husband’s cash flow two years before trial and ignored his recent
tax return which reflected his income had decreased substantially. (Id. at
p. 824). In Alan S. v. Superior Court, supra,
172 Cal.App.4th at page 242, this court determined the trial court abused its
discretion by ordering the husband to pay the wife’s attorney fees without
considering, inter alia, the husband’s negative cash flow and child support obligation. In In
re Marriage of Keech, supra, 75
Cal.App.4th 860, an appellate court reversed a trial court’s attorney fee order
(id. at pp. 862-863), because
the trial court’s order left the husband only “$93 per month after payment of
his court-ordered obligations”; nor did the record reflect “any consideration
of the husband’s needs to pay his own
outstanding legal fees during that period” (id.
at p. 868).

Here, the court failed
to determine husband had the ability to pay wife’s attorney fees and costs. Instead, the court based its award on the
fact that husband had previously made payments to his own attorney and
accountant. In doing so, the court
abused its discretion.

The record in this case
suggests wife faced many obstacles in gathering the evidence necessary to
establish husband’s ability to pay. Wife
alleged the community owned 24 different businesses, and she successfully moved
the court for an order compelling husband to make the access codes, user names,
and passwords available to her of “each and every [c]ommunity [p]roperty
business.” This order was made on April
20, 2011, during the course of the extended hearing on wife’s OSC. This order should not have been necessary. Parties who obfuscate or withhold evidence of
their ability are not immunized from attorney fee and cost orders. Under section 271, a court may order an
attorney fee award as a sanction
against an uncooperative party, provided, again, that the uncooperative party
has the ability to pay. For example, in >In re Marriage of Quay (1993) 18
Cal.App.4th 961, 969-970, the record was replete with documentation of the
husband’s delays, obstructions and refusal to provide an accounting of the
proceeds from a sale of stock, forcing the wife’s attorneys to bring motions to
comply. The appellate court affirmed the
trial court’s award of attorney fees under the predecessor statute to section
271.

Thus, if wife’s
allegations regarding husband’s ability to pay are ultimately proved to be
true, both a needs-based order and a sanctions order are potentially
available. But the prospect of an
ultimate remedy does not excuse the court’s noncompliance with the mandate of
section 270. “[T]he court shall first
determine that the party [ordered to pay] has or is reasonably likely to have
the ability to pay.” (>Ibid.)




DISPOSITION



The
order of August 31, 2011, awarding wife pendente lite attorney fees and costs
is reversed. Husband is awarded costs on
appeal.







IKOLA,
J.



WE CONCUR:







BEDSWORTH,
ACTING P. J.







MOORE, J.