Marriage of Shorr
Filed 3/20/13 Marriage of
Shorr CA2/7
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
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IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND
APPELLATE DISTRICT
DIVISION
SEVEN
In re Marriage of RENEE and
ALAN SHORR.
B232176
(Los Angeles
County
Super. Ct.
No. BD458883)
RENEE M. BAZAR SHORR,
Appellant,
v.
ALAN SHORR,
Respondent.
APPEAL from
a judgment of the Superior Court
of
County, Mark Juhas, Judge.
Affirmed.
Renee M.
Bazar, in pro. per., for Appellant.
Alan Shorr,
in pro. per., for Respondent.
_________________________
>
Renee M. Bazar (formerly Shorr) appeals from the
judgment entered by the superior court following trial of the property issues
remaining after the June 2008 status-only dissolution of her marriage to Alan
Shorr. Renee
erred as a matter of law in ordering her to reimburse Alan for the cost of her
health insurance after April 2010 and in finding she had breached her fiduciary
duty to Alan by failing to consent in 2008 to a sale of their community
interest in Alan’s investment company that subsequently failed in the economic
downturn. In addition, Renee contends
the court abused its discretion by failing to order Alan to produce further
documents relating to the parties’ assets and Alan’s income and by refusing to
continue the trial to allow Renee more time to ensure Alan was not hiding
community assets. We affirm.
factual and procedural background
1.
The Status Dissolution Judgment and Denial of
Alan’s Request To Sell His Business
In January 2007 Renee petitioned for dissolution
of her nearly 19-year marriage to Alan.
On June 3, 2008
the superior court entered a judgment of dissolution, status only, pursuant to
Family Code section 2337, subdivision (a).
the court ordered Alan, pending entry of judgment on all remaining issues, to
maintain health insurance for Renee, among other conditions.
About this same time Alan asked the court to
approve sale of his interest in an investment company known as AFA Holdings
(concededly a community asset) to his business partner without Renee’s
consent. According to Alan, his
relationship with his business partner had deteriorated to the point the
community would get no value from the business if the proffered deal was not
accepted. Notwithstanding these
concerns, the court refused to approve the sale because Alan had failed to
carry his burden of demonstrating the urgency for the sale, the justification
for the proposed price of approximately $1.2 million or any security provisions
that would protect Renee’s income stream in the future. (See §§ 1101, subd. (e); 2108.)
In August 2008 Alan again petitioned for court
approval of the sale of his business interest to his partner. The court again denied the request based on
Renee’s objection, concluding the proposed deal contained inadequate security
to protect Renee’s interests. At the
hearing the court ruled in Renee’s favor but cautioned she could be liable for
breach of her fiduciary duty to Alan by not allowing the sale to go forward.
At the same hearing the court scheduled trial on
the remaining issues for February 2009.
2.
Discovery Disputes and Trial Delays
In May 2008 Renee served her first set of
document demands. Alan responded by
producing his tax returns for the years 2003 through 2007, as well as his bank
records, credit card records and business records for the years 2005 through
2007. The record does not reveal why the
February 2009 trial date was continued; but, according to Alan, it was
continued until March 2010 at Renee’s request.
In July 2009, in response to a request by Renee’s accountant, Alan
produced additional tax returns, the general ledger for his business and his
2008 financial statements.
On January
5, 2010 the parties entered into a
respect to spousal support and some property issues, but were not able to agree
on the division of the AFA entities, various claims for reimbursement or
attorney fees. Shortly thereafter,
Renee’s counsel filed a motion to be relieved based on the deterioration of his
relationship with Renee and requested a continuance of the trial on the
remaining issues to allow new counsel to be retained. At a hearing on January 28, 2010 the court stated it would continue
the trial date subject to the condition the cost of the insurance premiums
incurred after April 1, 2010
would be chargeable to Renee at trial.
At a hearing on March 1,
2010 the court granted the motion of Renee’s counsel to be relieved
and set a new trial date of August 25,
2010.
Meanwhile, Renee had served another set of
document demands and interrogatories, which sought a number of items Alan
claimed had either been previously produced or were no longer relevant in light
of the voluntary settlement agreement.
Alan supplemented his earlier discovery responses by producing his
commission statements for 2007 to 2009,
additional personal, corporate and partnership tax returns for the years
2006 to 2008, and various business records, including contracts.
On March
25, 2010 Renee filed a motion to compel further responses to her
demands. Alan contended he had produced
all tax returns from 2004 to 2009, retirement account records, insurance
records, credit card statements, bank statements and relevant business
records. At the May 3, 2010 hearing on
the motion, the court ordered Alan to sign and file a declaration under penalty
of perjury affirming “there are no additional documents responsive to [Renee’s
document demands] in his possession, custody, or control, that have not already
been provided to [Renee].†Alan did
so.
On June
7, 2010 Renee filed four ex parte motions to compel discovery,
seeking documents from Fidelity Investments, an order compelling Alan’s
assistant to appear for a deposition, the appointment of a discovery referee to
be paid for by Alan and the creation of a blocked account to compensate her for
monies she claimed had been wrongfully used by Alan. Ex parte relief was denied, and the motions
were set for hearing on July 7, 2010. In keeping with Alan’s objections, the court
ordered Fidelity Investments to produce documents in Alan’s name but denied
discovery as to Alan’s clients. The
deposition was set for August 2010, a date agreed to by the witness; and the
motion for a discovery referee was denied.
Renee again sought a continuance of the trial
scheduled for August 25, 2010. The continuance was granted with the
admonition no further continuances would be granted. Trial was continued to January 6, 2011.
On December 14, 2010
Renee moved to set aside the voluntary settlement agreement and to reopen
discovery. She followed this motion with
a statement seeking to disqualify the trial judge based on his personal bias
toward her. (See Code Civ. Proc., §
170.3, subd. (c).) The court denied the
statement of disqualification on December
22, 2010. Renee’s petition
for writ of mandate and for immediate stay was denied by this court on January 5, 2011. (See Shorr
v. Superior Court (Jan. 5, 2011,
B229960) [order].)
3.
Trial on the Remaining Issues
On January
6, 2011 Alan appeared for trial.
Renee did not appear or notify the court of the reason for her
absence. She also had not filed a trial
brief. Alan proceeded to prove his
case. In support of his claim Renee had
breached her fiduciary duty by blocking the sale of the community’s interest in
AFA Holdings, Alan submitted the proposed sale agreement that valued the
interest at $1.2 million and evidence the company had ceased operations in May
2010. Based on this showing, the court
awarded Alan $600,000 in damages arising from Renee’s breach. The court also ordered Renee to reimburse
Alan for certain expenditures, including the cost of Renee’s health insurance
premiums from April 1, 2010
through the trial date, an amount set at $3,743.
On March
2, 2011 Renee filed a motion
to strike or set aside the judgment on the ground the court lacked
jurisdiction because there had been no final ruling on her motion to disqualify
the judge. She failed to appear at the April 11, 2011 hearing on the motion,
and it was denied.
contentions
Renee contends the trial court abused its
discretion by denying portions of her motions to compel further discovery and
refusing to continue the January 2011 trial date, which resulted in a
deprivation of her right to due process.
Renee also contends the order conditioning the January 2010 trial
continuance on termination of Alan’s obligation to underwrite her health
insurance premiums and the judgment charging her with the loss of $600,000
resulting from her refusal to consent to the sale of Alan’s business in June
2008 were in excess of the court’s jurisdiction and thus void.
discussion
1.
The Trial Court Did Not Abuse Its Broad
Discretion in Rejecting Renee’s Further Discovery Demands
A discovery order is normally
reviewed under the deferential abuse of discretion
standard. (See John B. v. Superior
Court (2006) 38 Cal.4th 1177, 1186; Pirjada
v. Superior Court (2011) 201 Cal.App.4th 1074, 1085.) “[A] reviewing court generally will not
substitute its opinion for that of the trial court and will not set aside the
trial court’s decision unless ‘there was “no legal justification†for the order
granting or denying the discovery in question.’†(Pirjada, at p. 1085.) “The appropriate test for abuse of
reason.†(Shamblin v. Brattain
(1988) 44 Cal.3d 474, 478.)
The gist of Renee’s arguments about the trial
court’s discovery orders relates to her contention Alan was hiding assets and
had perjured himself in declarations provided to the court. According to Renee, Alan’s conduct and the
court’s failure to intervene effectively deprived her of sufficient funds to
retain legal counsel and impaired her ability to prepare for trial.
In particular, Renee points to Alan’s refusal to
produce documents related to an account his company, Shorr Capital Management,
held with Fidelity Investments.
According to Alan, the account was an omnibus business account he used
to process client funds against which Alan billed quarterly to fund business
operations of the company. Unearned
funds were returned to clients. Alan
objected to Renee’s subpoena to Fidelity on the ground of customer privacy. The court ultimately ordered Fidelity to
produce Shorr Capital Management account documents but sustained Fidelity’s
objection to production of client account statements.
Notwithstanding her receipt of Shorr Capital
documents, Renee argues the court should have sanctioned both Fidelity and Alan
and appointed a discovery referee to ensure Alan could not continue to conceal
documents. The record, however, fails to
support the sweeping allegations Renee makes about discovery abuse and the
court’s failure to sanction Alan’s conduct.
The court addressed Renee’s contentions and imposed a reasonable
accommodation of her legitimate discovery needs and the concerns raised by Alan
and Fidelity on behalf of Alan’s clients.
There was no abuse of discretion with respect to this order or any of
the other discovery orders challenged by Renee.
2.
The Trial Court’s Order Conditioning the January
2010 Trial Continuance on Renee’s Reimbursement of Insurance Costs Was Not Void
As described, section 2337 allows the court to
sever the issue of marital status and enter a judgment of dissolution while
reserving jurisdiction over other issues.
As a condition of severance the court may order that one spouse maintain
the other’s medical insurance until the case is finally resolved and indemnify
the other for the consequences of a loss or reduction of existing coverage. (§ 2337, subd. (c)(2).) Such a judgment was entered in this case on
June 3, 2008.
On January 28, 2010 Renee’s counsel appeared at
a hearing on an ex parte application
to continue the trial and reopen discovery following the voluntary settlement
conference. The trial court set the
matter for hearing on March 1, 2010, ordered Renee to appear and noted it would
agree to continue the trial only on the condition Renee reimburse Alan for the
health insurance costs incurred after April 1, 2010. Although Renee appeared at the March 1, 2010
hearing and disputed the inference she had been responsible for the need to
continue the trial, the court declined to lift the condition. Renee contends this order was void because
the status judgment was final and could not be altered at this juncture.
Renee, however, has misperceived the effect of
the challenged order. The court did not
alter the judgment, which ordered Alan “to maintain all existing health and medical insurance
coverage for [Renee].†The court simply
directed that the costs of Renee’s health insurance after April 1, 2010 would
be subject to reallocation in Alan’s favor at trial unless Renee were to
convince the court she should not be required to pay him back. The costs were charged to Renee at trial
because she had delayed the trial on several occasions and then failed to
appear and contest the allocation. There
was no error. (See § 290 [“[a]
judgment or order made or entered pursuant to this code may be enforced by the
court . . . by any other order as the court in its discretion determines from
time to time to be necessaryâ€].)
3.
The Trial Court Did Not Abuse Its Discretion by
Refusing To Continue the January 2011 Trial Date
A trial continuance may be granted only upon an
affirmative showing of good cause. (Cal.
Rules of Court, rule 3.1332(c).) We
review a court’s decision denying a request for continuance under the deferential
abuse of discretion standard. (Foster
v. Civil Service Com. (1983) 142 Cal.App.3d 444, 448.) Under this standard the reviewing court will
“only interfere with [the lower court’s] ruling if [it] find[s] that under all
the evidence, viewed most favorably in support of the trial court’s action, no
judge reasonably could have reached the challenged result.†(Estate of Billings (1991)
228 Cal.App.3d 426, 430.) The trial
court abuses its discretion when “‘it has exceeded the limits of legal
discretion by making an arbitrary, capricious, or patently absurd
determination.’†(Mendoza v. Club
Car, Inc. (2000) 81 Cal.App.4th 287, 301.)
“In determining whether a denial [of a
continuance] was so arbitrary as to deny due process, the appellate court looks
to the circumstances of each case and to the reasons presented for the
request.†(People v. Frye (1998)
18 Cal.4th 894, 1013, disapproved on another ground in People v. Doolin
(2009) 45 Cal.4th 390, 421.) Factors to
consider include “‘“the benefit which the moving party anticipates[,]
. . . the likelihood that such benefit will result, the burden on
other witnesses, jurors and the court and, above all, whether substantial
justice will be accomplished or defeated by a granting of the motion.â€â€™â€ (People v. Jenkins (2000) 22 Cal.4th
900, 1037; see also People v. Howard (1992) 1 Cal.4th 1132, 1171-1172
[“‘[I]t is not every denial of a request for more time that violates due
process even if the party fails to offer evidence or is compelled to defend
without counsel.’ [Citation.] Instead, ‘[t]he answer must be found in the
circumstances present in every case, particularly in the reasons presented to
the trial judge at the time the request is denied.’â€].)
The record does not support Renee’s contention
the trial court abused its discretion or denied her
yet another continuance of the trial in December 2010. Renee commenced this proceeding in January
2007. The status judgment was obtained
in June 2008; forensic accountants were retained; documents were exchanged; and
the matter proceeded to a voluntary settlement conference before the scheduled
March 2010 trial date. The case was then
three years old and only a few issues remained unresolved.
Renee, however, became convinced Alan was hiding
assets, even as it was disclosed Alan’s investment business had crumbled as a
result of the fiscal downturn. Her
attorney, citing the deterioration of the attorney-client relationship, was
forced to file a motion to withdraw. The
court continued the trial to August 2010 but warned Renee no further
continuances would be granted and conditioned the continuance on Renee’s
prospective reimbursement of health insurance costs incurred after April 1,
2010.
In ruling on the multiple motions to compel
Renee filed in May 2010, the court expressed frustration with her assertions
that Alan had withheld information and denied what it described as her
overbroad discovery requests and her demands for a discovery referee.
discovery authorized by the court, Renee once again sought a continuance in
August 2010. The trial was continued to
January 2011. In December 2010, without
representation and having been unable to establish malfeasance by Alan, Renee
sought disqualification of the judge.
She then failed to appear at trial or provide any excuse for her
absence.
Nothing in this record suggests the court abused
its discretion or violated Renee’s due process rights in proceeding with the
trial. Renee was afforded ample
opportunity to prove her allegations.
She failed to do so.
4.
The Trial Court Did Not Err in Awarding Alan
$600,000 on His Cause of Action for Breach of Fiduciary Duty
Married persons are subject to the general rules
governing fiduciary relationships and owe one another a duty of the highest
good faith and fair dealing. (§§ 721,
subd. (b); 1100, subd. (e); see Brewer v.
Federici (2001) 93 Cal.App.4th 1334, 1343-1344.) Section 1101, subdivision (a), creates a
right of action by one spouse against the other for breach of fiduciary duty
when the breaching spouse engages in conduct that impairs the value of the
non-breaching spouse’s interest in community property. Section 1101, subdivision (g), directs the
court to award the non-breaching spouse an amount equal to 50 percent of the
value of the impairment, plus attorney fees and 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 by the
court.†(See In re Marriage of Hokanson (1998) 68 Cal.App.4th 987, 992
[“[w]hen . . . a spouse has breached [his or] her fiduciary duty, but not in a
manner displaying fraud, malice, or oppression . . .
section 1101, subdivision (g), governs the applicable remediesâ€].)
Alan’s claim against
Renee for breach of her fiduciary duty to him based on her refusal to consent
to the sale of the community’s interest in his company was tried to the court
after Renee failed to appear. A court is
authorized to proceed with trial when a litigant fails to appear so long as the
litigant has received adequate notice of the trial. (Code Civ. Proc., § 594, subd. (a);
Edmonds (1983) 146 Cal.App.3d 336, 341 [when defendant answers
complaint and receives proper notice of trial but does not appear, plaintiff
may proceed with “uncontested†trial]; Colony
Bancorp of Malibu, Inc. v. Patel (2012) 204 Cal.App.4th 410, 412 [rejecting
claim trial court violated defendant’s due process rights by proceeding with
trial in absence of defendant and counsel who failed to return from lunch break
at appointed time].) The trial court
proceeded with trial in Renee’s absence and, among other reimbursable amounts,
imposed a charge of $600,000 based on her refusal to consent to the sale of the
community’s interest in the company in June 2008.
Renee contends the court’s ruling was either
void or voidable because she had twice defeated Alan’s earlier attempts to
obtain approval for the sale—final rulings, she claims, that were reviewable
only on appeal and now insulate her from the adverse finding at trial on Alan’s
breach-of-fiduciary-duty claim. Contrary
to Renee’s contention, Alan’s claim was not foreclosed by the earlier
proceedings.
title="">[6]
To prevail on his earlier motions, Alan had to
establish under section 1101, subdivision (e),
the proposed sale of the asset was in the best interest of the community and
Renee had arbitrarily withheld her consent or, alternatively under section
2108,
that good cause existed to liquidate the community asset to avoid an
unreasonable market or investment risk.
The court rejected each motion on the ground Alan had failed to carry
his burden of proof under these statutes.
Those rulings, however, did not determine,
either expressly or by implication, that Renee had acted consistently with her
fiduciary obligations or otherwise extinguish Alan’s claim. While they might have aided Renee in
successfully defending against Alan’s fiduciary breach claim, she failed to
appear at trial and contest his evidence.
Based on the evidence presented, including the proposed sale agreement,
there was ample support for the statutory award of 50 percent ($600,000) of the
contractual price of the asset at the time Renee refused to consent to the
transaction.
disposition
The judgment is affirmed. Alan is to recover his
PERLUSS,
P. J.
We concur:
WOODS, J. JACKSON, J.
name="_ftn1" title="">[1]
Although Renee and Alan no
longer share the same last name, the matter was filed under Renee’s married
name. Accordingly, we refer to them by
their first names for convenience and clarity.
(See Jones v. ConocoPhillips Co. (2011)
198 Cal.App.4th 1187, 1191, fn. 1.)
name="_ftn2" title="">[2]
Family Code section 2337,
subdivision (a), provides: “In a
proceeding for dissolution of marriage, the court, upon noticed motion, may
sever and grant an early and separate trial on the issue of dissolution of the
status of the marriage apart from other issues.â€
Statutory references are to
the Family Code unless otherwise indicated.
