Marriage of White and Warren

Filed 2/22/08 Marriage of White and Warren CA4/1

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

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COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

APPEAL from an order of the Superior Court of San Diego County, David B. Oberholtzer, Judge. Affirmed.

Robert L. Warren filed an order to show cause why his former wife, Katherine D. White, should not be required to pay damages for alleged breaches of both a postseparation fiduciary duty and a "Qualified Domestic Relations Order" (QDRO).^[1] The trial court denied Warren's motion for damages. Warren appeals, contending: (1) the trial court's conclusions on certain matters are inconsistent with the court's findings^[2]; (2) the court improperly shifted the risk of loss to him and imposed a duty on him to discover White's termination from employment; and (3) White did not give him a reasonable opportunity to exercise his options because her emails were untimely and ambiguous. We Affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Robert L. Warren and Katherine D. White were married in 1992. White holds a master's degree in electrical engineering and computer science, and Warren holds a master's degree in systems management and business administration. Both worked at Qualcomm, Inc. at one time. According to White's opposition papers, "Before and during our marriage, [Warren] taught business classes for the University of Phoenix. After [Warren] resigned from Qualcomm, [he] owned and operated several small businesses and eventually formed Solana Technology Development. He was co-founder, president and Chief Financial Officer. [He] was the accountant for the company and set up a stock option plan. [] In 1999, Solana Technology Development (STD) merged with another company and formed Verance. [Warren] was CEO and CFO and lead accountant of Verance. He was responsible for development and implementation of the company's stock options plans." In 1998, White started working for Leap Wireless, a Qualcomm spinoff, and was permitted to keep her Qualcomm stock options under certain conditions related to her continued employment at Leap. The parties' marital status was terminated in July 2001.

In May, 2002, White and Warren signed the QDRO, which provides, "There are stock option benefits awarded by [White's] present employer that may be exercised upon vesting. These benefits were earned during the marriage. Pursuant to this Order and to the extent permitted under the terms of the option agreements of the respective options, [White] assigns the options listed in Section 4 of this Order to [Warren] as [his] sole and separate property."

Paragraph "e" of the QDRO states:

"All options assigned pursuant to this Order shall be governed by the terms of [White's] options, copies of which are attached hereto as Exhibit A. [White or her estate] shall give notice immediately following termination of [White's] employment with [Qualcomm] in order to provide [Warren] a reasonable opportunity to exercise [his] options prior to the expiration date. [Warren] understands that [Qualcomm] shall have no obligation to notify [him] of [White's] termination of employment with [Qualcomm]. The Court shall reserve jurisdiction to resolve any disputes between the parties regarding said notification. [White] shall be liable for any damages suffered by [Warren] because of [her] failure to notify him of the termination of her employment."

The trial court found that in August 2002, pursuant to the QDRO, "Qualcomm assigned to Warren a separate account under the Stock Option Plan, mechanisms for exercising his options independently, and he was apparently given a form to designate a beneficiary for the Plan account." Warren had "sole control over his E-Trade account holding his options." The court added, "Moreover, White's exhibits reflect regular periodic communication between Warren and both Qualcomm and Leap. He knew exactly whom to contact, because he had exchanged letters and e-mails with them."

The trial court found that White was terminated by Leap in September 2002, and her tax return for 2002 showed she received unemployment benefits. White provided notice of her termination to Warren. Accordingly, he had 30 days from her September, 2002 termination to exercise certain stock options, and he did so; those options are not at issue here.

White entered into a consulting agreement with Leap effective October 1, 2002 until December 31, 2002.^[3] Under this agreement, her stock options which were granted on December 5, 1997 vested on December 5, 2002. White exercised those stock options on December 27, 2002. The parties' dispute relate to Warren's 5, 278 stock options which also vested on December 5, 2002. He was required to exercise them within 30 days after White's term as a consultant ended on December 31, 2002.

The trial court found that "White was never asked to do any consulting, never submitted a bill and never received any compensation under the consulting agreement. Moreover, according to her testimony, White was not sure the consulting agreement would save her December 5, 2002 options. She does not recall how or when she became aware that she had the right to exercise those options." The trial court found that "White did not personally notify Warren of the term of the consulting agreement, or indeed that the consulting agreement existed."

The trial court stated, "the purpose of the QDRO was to enable [Warren] to exercise any vesting options, but the QDRO provides no guidance whatsoever as to how White should act once she informed [Warren] of her termination in September 2002 to comply with Paragraph 'e.' The QDRO did not require anything else, because no one anticipated these facts, or anything like them, when they prepared the documents. One way for White to comply with their common intent is to tell warren about the consulting agreement, but it is not the only way, Warren's strident arguments notwithstanding. Accordingly, the court finds no breach by White for her lack of notice to Warren respecting the consulting agreement or its termination date." The trial court concluded that White's obligation to Warren under the QDRO was to provide him a "reasonable opportunity to exercise his options prior to their expiration date."

On January 10, 2003, White sent Warren an email whose subject line stated, "stock options." The rest of the email stated: "Bob, I believe that Leap and Qualcomm options will terminate at the end of January 2003, if not sooner. This is just a reminder. Katherine." The trial court found that, "To White, it was a 'reminder' because she assumed Warren had received his December 19, 2002, closing statement from Leap, as she had, listing her termination date as December 31, 2002, and the last option exercise date as January 30, 2003. Warren claims he was perplexed by the e-mail, in part because he had never received the December closing statement. The file copy of Warren's December closing statement was provided to White by Qualcomm: the address is correct and the footer indicates it was printed December 19. White received hers, Warren is adamant he did not. [] The court believes both parties. White thought Warren had received notice from Leap, an altogether valid assumption. For whatever reason, Warren did not receive the notice, nor the '30-day to exercise closing statement' from Qualcomm, which substantially handicapped his attempt to understand the situation."

On January 20, 2003, Warren sent White an email stating, "Katherine, They were supposed to have lapsed 30 days after your departure. Did you get an extension on the expiration? Bob"

On January 24, 2003, White responded via email: "Bob, I got notice in the mail from [Qualcomm] (closing statement). My e-mail was a friendly notice. I suggest you contact Qualcomm directly so that you get the most accurate information. Katherine." The court found, "Probably because of a malfunction in the Leap server, Warren did not receive this e-mail until 5:38 a.m. on January 28. At this point, Warren had three business days to exercise his options. Warren did not contact Qualcomm, and did not exercise his remaining options."

On December 8, 2004, Warren filed in the trial court an order to show cause, and sought "relief for breach of QDRO [and] post-separation fiduciary duty." Warren stated in his accompanying declaration: "I was entitled to receive 5,278 shares of Qualcomm stock, which have split and now total 10,556 shares. I request that [White] be ordered to transfer 10,556 shares to me, that she be assessed a penalty for her actions, and that she pay all attorney fees associated with this issue." Warren's counsel stated at the hearing that if Warren had contacted Qualcomm or Leap, he would have been told he had additional stock vested options.

The trial court held a hearing on May 6, 2005, and issued a proposed statement of decision on November 29, 2005. Warren filed "objections to proposed statement of decision" and a "motion for entry of judgment different than announced" on December 19, 2005. The trial court issued its "response to Warren's objection to proposed statement of decision" and its "final statement of decision" on August 21, 2006. The trial court ruled, "After May 2002 . . . White owed Warren no post-separation fiduciary duty regarding the stock options."^[4] The trial court further ruled that under the QDRO, White was obligated to give Warren a reasonable opportunity to exercise his stock option prior to their expiration date. She complied with this requirement because, "Warren had at least three business days to act after White's second e-mail stating the options were about to expire, and almost two weeks to take her suggestion he should contact Qualcomm personally. A reasonable person would have called immediately. Moreover, Warren had a brokerage account with 24-hour access." The trial court also referred to Warren's "business sophistication" as another reason he should have investigated White's email notifications.

DISCUSSION

Warren contends the issue in this case is: "[W]hether . . . [White] gave . . . [Warren] sufficient notice under the parties' qualified domestic relations order (QDRO) to provide him a reasonable opportunity to exercise his Qualcomm stock options before they expired." As to this issue, Warren contends, "The court found that White's e-mails to Warren gave him 'sufficient notice and a reasonable time and opportunity to exercise his options.' However, there is no substantial evidence to support that finding."

"It is not our task to weigh conflicts and disputes in the evidence; that is the province of the trier of fact. Our authority begins and ends with a determination as to whether, on the entire record, there is any substantial evidence, contradicted 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." (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, at pp. 630-631; accord In re Marriage of Duffy (2001)91 Cal.App.4th 923, 931.)

White's January 10, 2003 email notification to Warren informed him that some Qualcomm stock options were going to expire by the end of January or earlier. At that point, Warren had approximately 20 days to exercise his stock options. Warren responded to White on January 20, ten days after her first notification, asking whether Qualcomm had given her an extension on the expiration date. On January 24, White responded that Warren should contact Qualcomm for further details. Although White did not answer Warren's specific question, she gave him enough useful information to alert him about the source of her information regarding the stock options; she further recommended that he contact Qualcomm, the plan provider, to get an accurate explanation of the situation. Warren still had three days from the date of receipt of this email to check into the matter with Qualcomm, but he did not do so.

The trial court prefaced its statement of decision with its observation that a key to understanding this case is that "the [divorce] proceedings have been contentious, with every agreement viewed as a business negotiation, each party hyper-alert to the other's possible breach." Keeping in mind that finding, and taking into consideration Warren's business degree; his knowledge of stock option plans; plus the 24-hour access to his online account that he had since 1992, we conclude White's emails provided Warren adequate notice and a reasonable time for him to exercise his stock options. The QDRO did not expressly require White to provide notice to Warren regarding the consulting agreement, but as her email stated, as a courtesy to him she informed him of stock options that vested as a result of the consulting agreement. Sufficient evidence supported the trial court's finding regarding the adequacy of White's notice to Warren. The other issues raised on appeal are moot.

DISPOSITION

The judgment is affirmed. Each party shall bear its own costs on appeal.

O'ROURKE, J.

WE CONCUR:

HUFFMAN, Acting P. J.

AARON, J.

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^[1] According to the trial court's statement of decision, "Although the operative document is titled 'Domestic Relations Order', the parties refer to it as the 'QDRO', which the court will adopt."

^[2] In particular, Warren challenges these conclusions reached by the trial court: (1) "that Warren had an obligation equal to White's to act with reasonable diligence"; (2) "that it was 'unwise,' [that is] unreasonable, for Warren not to investigate White's 'mysterious' emails"; (3) "that White's notice to Warren complied with the specific language of the QDRO"

^[3] The trial court stated, "Apparently, Qualcomm avoided any problems with White's required 'continuous employment' simply by stating she had unbroken employment through December 31, 2002, notwithstanding her termination in September . . . and the lack of any contribution to the corporation under the consulting agreement."

^[4] Warren does not challenge the trial court's ruling regarding the absence of a post-separation fiduciary duty on White's part; therefore, it is deemed waived. " 'Appellate courts will notice only those assignments pointed out in the brief of an appellant, all others are deemed to have been waived or abandoned.' " (Wheeling v. Financial Indem. Co. (1962) 201 Cal.App.2d 36, 44; accord Schuster v. Gardner (2005) 127 Cal.App.4th 305, 318, fn. 1.)