Marriage of Ciliberto and Firth CA2/7 ( 2016 )

Filed 1/19/16 Marriage of Ciliberto and Firth CA2/7
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication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
SECOND APPELLATE DISTRICT
DIVISION SEVEN
In re Marriage of PATRICK CILIBERTO B251411
and KIMBERLY FIRTH.
(Los Angeles County
Super. Ct. No. BD495885)
PATRICK CILIBERTO,
Petitioner and Respondent,
v.
KIMBERLY FIRTH,
Respondent;
BRAUER LAW CORPORATION,
Claimant and Appellant.
APPEAL from an order of the Superior Court of Los Angeles County,
David Cunningham III, Judge. Affirmed.
Brauer Law Corporation, in pro. per.; Brauer Law Corporation and Laurel
B. Brauer for Claimant and Appellant.
William W. Oxley; Broedlow Lewis, Jeffrey Lewis and Kelly Broedlow
Dunagan for Petitioner and Respondent.
________________________________
INTRODUCTION
A spouse involved in dissolution proceedings signed a family law attorney’s real
property lien (known by the unfortunate acronym FLARPL) in favor of her attorney,
secured by her community property interest in the marital home. As part of the division
of property in a stipulated judgment, the trial court awarded the marital home to the
husband as his sole and separate property and purported to extinguish the FLARPL. The
trial court subsequently granted the husband’s motion to extinguish the FLARPL on the
grounds the FLARPL was statutorily defective and the parties’ agreement had released
the lien. The wife’s former attorney appeals, arguing that the declaration in support of
the FLARPL was not defective, the parties’ settlement agreement and stipulated
judgment of dissolution did not extinguish the FLARPL, and the husband is estopped
from challenging the validity of the FLARPL. We conclude that the attorney’s failure to
comply with the statutory requirements for a notice of a FLARPL rendered the FLARPL
void, and the trial court did not abuse its discretion in extinguishing it. Therefore, we
affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Patrick Ciliberto and Kimberly Firth were married on April 23, 1992 and
separated on November 10, 2008. Ciliberto initiated marital dissolution proceedings in
November 2008, and William Oxley represented him throughout the proceedings. Laurel
Brauer of Brauer Law Corporation represented Firth intermittently during the
proceedings.
A. The FLARPL
In December 2010, in order for Brauer to continue representing her, Firth signed a
declaration creating a FLARPL in the amount of $100,000 secured by her community
2
property interest in the marital home in Woodland Hills, California. (See Fam. Code,
§ 2033, subd. (a).)1 Firth’s declaration in support of the FLARPL, her first of two such
declarations, stated her belief that the property “has a fair market value of at least
$750,000, based upon the current selling price of comparable properties in the area,” but
she did not attach any supporting documentation. Although Firth was living in England
at the time she signed the declaration, she did not sign her declaration before any of the
officials listed in Code of Civil Procedure section 2014.2 The notice and declaration
were both dated December 8, 2010.
On December 9, 2010 Brauer served notice of the FLARPL on Oxley. Brauer
filed the lien with the superior court the next day, December 10, 2010, but she did not
record the lien in the County Recorder’s Office. Ciliberto did not object to the FLARPL.
B. The Deal Memo and Stipulated Judgment
In January 2011, after negotiations among the parties, Brauer prepared a
settlement agreement entitled “Deal Memo for Stipulated Judgment” that resolved the
disputes of the parties. The agreement awarded the marital home to Ciliberto, “along
with all encumbrances, including the HELOC [home equity line of credit] account,” but
the agreement did not mention the FLARPL. The settlement agreement also included a
provision stating, “Each party to pay his and her own attorney’s fees.” Firth signed the
settlement agreement on January 28, 2011, Brauer signed it on February 1, 2011, and
Ciliberto and Oxley signed it on February 9, 2011.
1 All undesignated statutory references are to the Family Code.
2 Code of Civil Procedure section 2014 provides: “An affidavit taken in a foreign
country to be used in this State, may be taken before an Embassador,[ ] Minister, Consul,
Vice Consul, or Consular Agent of the United States, or before any Judge of a Court of
record having a seal in such foreign country.” Family Code section 2033, subdivision
(b), requires the notice to contain “a declaration signed under penalty of perjury,” and,
Code of Civil Procedure section 2015.5 requires an out-of-state declarant to invoke “the
laws of the State of California.” Firth’s declaration complied with these latter two
requirements.
3
Because Firth had not signed her first declaration in support of the FLARPL
before one of the officials listed in Code of Civil Procedure section 2014, Brauer
prepared another declaration for Firth to sign. On February 18, 2011, after the parties and
their attorneys had signed the settlement agreement, Firth signed the new, notarized
declaration in England. Other than the new date and the notarization, Firth’s February
18, 2011 FLARPL declaration was the same as her December 8, 2010 FLARPL
declaration. As with her first declaration, Firth’s second declaration did not include
documentation to support her belief as to the fair market value of the property.
On March 9, 2011 Brauer served Oxley with an amended FLARPL. Ciliberto
claims that this document consisted of the first page of the first FLARPL notice (dated
December 8, 2010 and filed with the court on December 10, 2010) and Firth’s February
2011 notarized declaration. Ciliberto describes this document as “Frankenstein’d” and
claims that Brauer filed it hoping no one would notice she had constructed it by
combining two different documents.3
On March 18, 2011 Brauer substituted out of the case so that Firth was
representing herself, although Brauer continued to remain involved. Brauer states in her
opening brief that “Oxley continued to contact [her] for help and assistance,” and, to the
extent she could, she “tried to assist.” On March 29, 2011 Brauer filed the amended
FLARPL with the trial court and on March 30, 2011 she recorded it with the Los Angeles
County Recorder’s Office.
On July 28, 2011 the court entered a judgment of dissolution pursuant to a written
stipulation prepared by Oxley and signed by Ciliberto and Firth. The judgment provided
for disposition of the marital home as follows: “The home . . . is subject to a first
mortgage . . . and a home equity line of credit . . . . [¶] [Firth] transfers to [Ciliberto] as
his sole and separate property, subject to any and all encumbrances/obligations against
3 “Frankensteined” means “[t]he combination of two or more similar elements into
one cohesive idea, image or item that appears seamless in presentation.” (See Urban
Dictionary [as of
Sept. 9, 2005].)
4
the same, all of her rights and interest in the family residence . . . for the consideration
within this judgment, and in return, [Firth] is ordered to pay, defend, indemnify and hold
[Ciliberto] harmless from the payment of any debt or encumbrances against any such
property. [¶] [Firth] is forthwith ordered to execute an Interspousal Transfer Deed,
Release of Attorney Fees Lien, or similar, and deliver same to [Ciliberto] upon demand.”
The judgment also stated: “Each party will bear all of his or her own attorney fees and
costs incurred in connection with the negotiation, preparation and execution of the
stipulated judgment and the pending proceeding for dissolution of marriage. As such,
any Family Law Attorney’s Real Property Lien is hereby extinguished.” The trial court
retained jurisdiction over the parties and the real property to enforce the disposition of the
property. On July 28, 2011 the clerk mailed a notice of entry of judgment on reserved
issues to Oxley and Firth (but not Brauer).
In July 2011 Oxley sent an email to Brauer stating that he had submitted the
judgment but still needed Brauer’s help obtaining Kim’s signature on “the interspousal
transfer deed . . . [and] [r]elease of [l]ien,” and that Oxley “would feel more comfortable
if it was signed and you held it until the judgment is filed.” According to Brauer, in
August 2011 Oxley sent her copies of emails he had exchanged with Firth asking for the
notarized interspousal transfer deed and the stipulation and order vacating the FLARPL.4
Brauer did not have any further contact with Oxley until December 2011.
C. The Motion To Join Brauer and To Extinguish the FLARPL
On December 19, 2011 Ciliberto filed motions to join Brauer as a party and to
extinguish the FLARPL. Ciliberto argued that the court should join Brauer as a party so
4 Although Brauer and her firm were no longer counsel of record in July 2011, they
later claimed in opposition to Ciliberto’s motion to expunge the FLARPL, “We hadn’t
seen the Judgment, but on July 12, [Oxley] emailed us that he had submitted the
Judgment [and] [he] needed [Brauer’s] help regarding . . . [the] Release of Lien.” Thus,
the record suggests that Oxley and Brauer had discussions about the release of any lien
prior to the entry of the judgment.
5
that she could have an opportunity to oppose the request to set aside the FLARPL.
Ciliberto asked the court to extinguish the FLARPL on several grounds, including that
the FLARPL was defective because the notice did not comply with Family Code section
2033, Brauer had signed the deal memo stating that each spouse would bear his or her
attorneys’ fees, Brauer had waived her right to enforce the FLARPL because she
recorded it after the parties had entered into the settlement agreement, and the stipulated
judgment extinguished the FLARPL and Firth’s interest in the property. In the
alternative, Ciliberto asked the court to set aside the judgment due to mistake or to award
him sufficient assets to indemnify him against the FLARPL.
On March 6, 2012 Brauer filed a “position” in response to Ciliberto’s motions,
arguing that, as a procedural matter, she could not respond to the request to extinguish the
FLARPL because she had not yet been properly joined as a party. Brauer also argued
that, although Ciliberto had received the property as his sole and separate property, he
had also received all the property’s encumbrances, including the FLARPL. Brauer’s
response apparently prompted the parties to start again and submit a new round of papers,
which included an “answer to verified complaint” filed by Brauer on August 16, 2012, a
renewed motion to set aside the FLARPL filed by Ciliberto on October 24, 2012, a
responsive declaration filed by Brauer on February 6, 2013, and a reply filed by Ciliberto
on February 11, 2013.
D. The Trial Court’s Ruling
At the February 14, 2013 hearing on the motion to extinguish the FLARPL, the
court stated that its tentative ruling was to grant the motion and extinguish the FLARPL.
The court stated that “the language of the deal memo which was drafted by Brauer
implies that any prior [FLARPL] was to be released in favor of the express provision
requiring each party to pay his or her own attorney’s fees. And it does appear to the court
that this interpretation is actually supported by Brauer’s own opposition statements in
which she repeatedly refers to comments made by herself and husband’s counsel
6
regarding the planned release of the [FLARPL]. And you can see in the . . . Brauer
declaration, paragraphs 10 through 12 [indicating continuing contact with Oxley] the fact
that . . . even Brauer’s own recitation supports the husband’s position. Secondly,
Brauer’s failure to adhere to the statutory requirements in crafting the declaration by
failing to include any documentation and [Brauer’s] failure to file and record the
FLARPL also speak against that.”
The court further stated to Brauer, “And certainly, if you drafted [the deal memo]
it destructs the enforceability and any ambiguity needs to be resolved against you. Now,
there were a number of ambiguities contained within that deal memo [including] your
decision not to mention the [FLARPL] combined with the express listing of the two other
encumbrances and the provision regarding attorney’s fees, to this court support a finding
that the deal memo was intended to supersede the FLARPL. [You fail] to explain why
the [FLARPL] was never mentioned in the deal memo if you were as concerned about its
enforceability as you are claiming . . . and you needed to explain why the documentation
requirement of Family Code section 2033, [subdivision] (b)(2), supposedly does not
apply to you.”
Brauer argued that, “[a]s to the no documentation in the declaration . . . the statute
does not say that documentation is required. What the statute states is that . . . ‘the
declaration contains . . . the party’s belief as to the fair market value of the property and
documentation supporting that belief.’ The declaration of the statute doesn’t require
documentation . . . and what I argue in the brief is that she didn’t have any
documentation. She didn’t go out and get an appraisal. She didn’t go and hire someone
to provide her the documentation. And what we know from the Evidence Code [section
813, subdivision (a)], that owners of real property can provide their own fair market
value.”
The court adopted its tentative ruling to extinguish the FLARPL and denied
Brauer’s request for a statement of decision. The court’s February 14, 2013 minute order
states that Ciliberto’s request to extinguish the FLARPL “is GRANTED,” and that the
7
“Order regarding [the FLARPL] is signed and filed this date.” The record, however, does
not include this “Order regarding” the FLARPL.
There was another hearing on April 11, 2013. The minute order from that date
states, “The Court signs and files a Finding and Order After Hearing regarding the
hearing date of February 14, 2013.” This “Finding and Order After Hearing” states that
the court signed an order releasing the FLARPL, although the record does not include
this order. The court also vacated its prior order precluding Ciliberto from “listing,
selling, hypothecating, encumbering or transferring the property . . . .” Brauer timely
appealed.5
DISCUSSION
The January 2011 deal memo, drafted by Brauer, awarded Ciliberto the marital
home and “all encumbrances,” but the only encumbrance it specified was the home
equity line of credit. It did not mention the FLARPL. It also provided that each side
would bear his or her attorney’s fees. The July 2011 stipulated judgment, to which
Brauer was not a party and for which she was not attorney of record, confirmed the award
to Ciliberto of the home, along with encumbrances and obligations, but it listed only the
first mortgage and the home equity line of credit. The judgment also purported to
extinguish “any” FLARPL.
5 On January 21, 2014 this court denied Ciliberto’s motion to dismiss the appeal as
untimely. Brauer’s notice of appeal states that she is appealing from the April 11, 2013
order. Because the parties waived notice of the April 11, 2013 order, and neither the
clerk nor Oxley served a notice of entry of this order, Brauer had 180 days to file a notice
of appeal, or until October 8, 2013. (Cal. Rules of Court, rules 8.104(a)(1)(C) and
8.104(a)(3).) Brauer filed her notice of appeal on September 10, 2013. Oxley did submit
to this court a conformed file-stamped copy of the April 11, 2013 order that he claimed
he served that day, but Oxley did not sign and date the proof of service until September
18, 2013, over four months later and after Brauer filed and served her notice of appeal on
September 10, 2013, and he did not file it until October 24, 2013. We do not find this
proof of service sufficiently reliable to foreclose the appeal.
8
The parties dispute the meaning of these documents, and disagree whether either
of them could extinguish a valid, preexisting FLARPL, particularly when Brauer was not
a party to the judgment and was not attorney of record for Firth at the time. We do not
resolve these issues, however, because we conclude that, by failing to comply with the
statutory requirements for a FLARPL, Brauer never established a valid, preexisting
FLARPL. Therefore, regardless of whether the deal memo or the stipulated judgment
extinguished the FLARPL, the trial court did not abuse its discretion because Brauer did
not create a valid FLARPL in the first place.6
A. Family Law Attorney’s Real Property Liens
Section 2033 states the notice requirements and procedure for obtaining a
FLARPL on a party’s community property interest in real property, and for objecting to
the lien prior before it is recorded. (§ 2033, subds. (b), (c).)7 The family law attorney for
the encumbering party must serve notice of the FLARPL on the other party’s attorney of
6 Ciliberto argues that Brauer “failed to appeal the July 28, 2011 judgment
extinguishing the FLARPL and the time to do so has long expired.” Brauer’s failure to
appeal from the July 28, 2011 judgment, however, does not preclude her from pursuing
this appeal. Brauer was not counsel of record at the time the court entered the judgment,
she was not a party to the proceedings at that time, and she did not receive notice that the
court had entered it. (See Spector v. Superior Court (1961) 55 Cal.2d 839, 843 [“[i]t is a
cardinal principle of our jurisprudence that a party should not be bound or concluded by a
judgment unless he has had his day in court”]; In re Marriage of Ramirez (2011) 198
Cal.App.4th 336, 344-345 [order vacating FLARPL was void because court cannot
extinguish a FLARPL without joining the attorney to protect his or her lien interests];
Knowles v. Tehachapi Valley Hospital Dist. (1996) 49 Cal.App.4th 1083, 1091
[“respondent was not a ‘party’ to the stipulated judgment, and was not bound by the
determinations therein”].)
7 Section 2033 provides in part:
“(a) Either party may encumber his or her interest in community real property to
pay reasonable attorney’s fees in order to retain or maintain legal counsel in a proceeding
for dissolution of marriage . . . .
9
record at least 15 days before recording the encumbrance. The notice must include a
declaration containing a full description of the real property, the encumbering party’s
belief as to the fair market value of the property along with “documentation supporting
that belief,” the amount of the attorneys’ fees, and other information. (§ 2033, subd. (b);
In re Marriage of Ramirez, supra, 198 Cal.App.4th at p. 343.) The attorney must also
comply with Rule 3-300 of the Rules of Professional Conduct of the State Bar. (§ 2033,
subd. (e).) Section 2033 provides for an ex parte procedure for the nonencumbering
spouse to object to the lien prior to its recording. (§ 2033, subd. (c).) The ex parte
objection must “include a request to stay the recordation” of the FLARPL and a copy of
the notice of FLARPL the objecting party received.
“(b) Notice of a family law attorney’s real property lien shall be served either
personally or on the other party’s attorney of record at least 15 days before the
encumbrance is recorded. This notice shall contain a declaration signed under penalty of
perjury containing all of the following:
“(1) A full description of the real property.
“(2) The party’s belief as to the fair market value of the property and
documentation supporting that belief.
“(3) Encumbrances on the property as of the date of the declaration.
“(4) A list of community assets and liabilities and their estimated values as of the
date of the declaration.
“(5) The amount of the family law attorney’s real property lien.
“(c) The nonencumbering party may file an ex parte objection to the family law
attorney’s real property lien. The objection shall include a request to stay the recordation
until further notice of the court and shall contain a copy of the notice received. The
objection shall also include a declaration signed under penalty of perjury as to all of the
following:
“(1) Specific objections to the family law attorney’s real property lien and to the
specific items in the notice
“(2) The objector’s belief as to the appropriate items or value and any
documentation supporting that belief.
“(3) A declaration specifically stating why recordation of the encumbrance at this
time would likely result in an unequal division of property or would otherwise be unjust
under the circumstances of the case.”
10
Section 2034, subdivision (a), provides in part: “On application of either party,
the court may deny [a FLARPL] based on a finding that the encumbrance would likely
result in an unequal division of property because it would impair the encumbering party’s
ability to meet his or her fair share of the community obligations or would otherwise be
unjust under the circumstances of the case.” Section 2034, subdivision (c), gives the
family law court jurisdiction “to resolve any dispute arising from the existence of a
[FLARPL],” and authorizes the court “to resolve disputes over the propriety of existing
FLARPL’s, whenever they may arise,” even after a division of the community real
property. (In re Marriage of Turkanis & Price (2013) 213 Cal.App.4th 332, 350-352
(Turkanis).) The court can revisit the propriety of a FLARPL even after it has been
recorded, “when the encumbering spouse had not complied with the procedural
requirements for duly recording the FLARPL, and the nonencumbering spouse want[s] to
expunge the procedurally deficient FLARPL.” (Id. at p. 351; see Hogoboom & King,
Cal. Prac. Guide: Fam. Law (The Rutter Group 2015) ¶ 1:302, p. 1-103 [“a court may
revisit the propriety of the lien at any time and, in an appropriate case, order the lien
expunged”].)
A trial court’s order granting a motion to expunge a FLARPL is reviewed for
abuse of discretion. (Turkanis, supra, 213 Cal.App.4th at p. 345.) “In applying the abuse
of discretion standard, we determine whether the trial court’s factual findings are
supported by substantial evidence and independently review its legal conclusions.” (In re
Marriage of Drake (2015) 241 Cal.App.4th 934, 940; Turkanis, at p. 345.)
B. The Trial Court Did Not Abuse Its Discretion in Extinguishing the FLARPL
Because the Notice of the FLARPL Was Defective
Section 2033, subdivision (b)(2), requires that the notice of the FLARPL include a
declaration that contains “[t]he party’s belief as to the fair market value of the property
and documentation supporting that belief.” The declarations signed by Firth provided a
description of the property and stated her belief that the property had a fair market value
11
of $750,000 or more. Neither of Firth’s two FLARPL declarations, however, provided
any documentation supporting her belief. Therefore, her declarations did not comply
with the statute.
Brauer argues that Firth’s declaration complied with the statute because, despite
the language of section 2033, subdivision (b)(2), requiring documents, “the statute does
not require documents.” Brauer argues that, because Evidence Code section 813 allows
an owner or spouse of an owner to give an opinion on the value of property, section 2033,
subdivision (b)(2), should too.
Except that it doesn’t. In interpreting a statute, “we must look first to the words of
the statute, ‘because they generally provide the most reliable indicator of legislative
intent.’ [Citation.] If the statutory language is clear and unambiguous our inquiry ends.
‘If there is no ambiguity in the language, we presume the Legislature meant what it said
and the plain meaning of the statute governs.’ [Citations.] In reading statutes, we are
mindful that words are to be given their plain and commonsense meaning. . . . Only
when the statute’s language is ambiguous or susceptible of more than one reasonable
interpretation, may the court turn to extrinsic aids to assist in interpretation. [Citation.]”
[Citation.]’ [Citation.] These extrinsic or ‘secondary rules of construction’ include
‘maxims of construction, which express familiar insights about conventional language
usage; the legislative history; and the wider historical circumstances of a statute’s
enactment.’” [Citation.]” (AIDS Healthcare Foundation v. State Dept. of Health Care
Services (2015) 241 Cal.App.4th 1327, 1336; see Turkanis, supra, 213 Cal.App.4th at
p. 350.)
Section 2033, subdivision (b)(2), clearly and unambiguously requires supporting
documentation. (See Turkanis, supra, 213 Cal.App.4th at p. 348 [because “[t]he reported
case law interpreting or applying sections 2033 and 2034, or their predecessor sections, is
scant,” the court is “guided in large part by the plain language of the statute and
analogous case law”].) It provides that a FLARPL notice “shall contain a declaration
under penalty of perjury containing” five items, the second of which is “[t]he party’s
12
belief as to the fair market value of the property and documentation supporting that
belief.” The word “shall” in a statute ordinarily refers to something that is mandatory.
(Austin v. Department of Motor Vehicles (1988) 203 Cal.App.3d 305, 309; see Standard
Pacific Corp. v. Superior Court (2009) 176 Cal.App.4th 828, 833 [“the usual rule [is] that
‘shall’ expresses a mandatory requirement”].) “The word ‘shall’ expresses a mandatory
intent unless the legislative history of the statute where it occurs shows otherwise.”
(Ovadia v. Abdullah (1994) 24 Cal.App.4th 1100, 1109; see Jacobs v. State Bar (1977)
20 Cal.3d 191, 198 [“whether the word ‘shall’ in a statute is to be construed as mandatory
or directory depends upon ascertainment of the probable legislative intent”].)
The legislative history of section 2033 does not show otherwise. To the contrary,
the legislative history shows that the Legislature included the documentation requirement
to ensure that the FLARPL notice gives the nonencumbering party as much detail as
possible about the lien and the property.
The Legislature originally enacted the predecessors to sections 2033 and 2034,
Civil Code former sections 4372 and 4373, in response to the Supreme Court’s decision
in Droeger v. Friedman, Sloan & Ross (1991) 54 Cal.3d 26. (Lezine v. Security Pacific
Fin. Services, Inc. (1996) 14 Cal.4th 56, 68, fn. 7.) In Droeger the Supreme Court held
that both spouses must consent to the transfer of an interest in community real property.
The Legislature enacted these statutes to allow “a spouse to encumber his or her interest
in community real property to pay attorney fees and costs in a dissolution action” without
the consent of the other, nonencumbering spouse. (Turkanis, supra, 213 Cal.App.4th at
p. 347.) The Assembly Committee of the Judiciary report commented that the statute
provided an equitable balance between the need for one party to timely obtain a lien in
order to secure an attorney, and the protection of the other party’s community property
rights. The committee report recognized that “one of the most frequently and hotly
contested issues in a family law case is the value of the community residence. Appraisals
of the fair market value can differ by many thousands of dollars. At the time of recording
the FLARPL, however, there won’t be any formal determination as to the fair market
13
value, or the community interest in, the real property.” The report then stated, “In order
to resolve these concerns, this bill provides for a detailed notice to the other party,” in
order to give “the other party sufficient information to determine if he or she should be
concerned about the effect of the FLARPL on the ultimate division of community
property, so he or she can timely object . . . .” (Assem. Com. on Judiciary, Analysis on
Assem. Bill No. 3399 (1992 Reg. Sess.) May 6, 1992, pp. 3-4; see Joannou v. City of
Rancho Palos Verdes (2013) 219 Cal.App.4th 746, 759 [“[r]eports of legislative
committees and analysts are also useful indicators of legislative intent”]; Mt. Hawley Ins.
Co. v. Lopez (2013) 215 Cal.App.4th 1385, 1401 [committee reports are appropriate
sources to use in ascertaining the Legislature’s intent].) The Legislative Counsel’s Digest
also reflects that the requirements of what is now section 2033, subdivision (b), were
mandatory, by stating that the new statute “would require the encumbering spouse to
serve the other spouse or that spouse’s attorney of record notice of the family law
attorney’s real property lien containing specified information.” (Legis. Counsel’s Dig.,
Assem. Bill. No. 3399 (1992 Reg. Sess.) pp. 2-3; see Mt. Hawley, at p. 1401 [“[t]he
Legislative Counsel’s digest ‘constitutes the official summary of the legal effect of the
bill and is relied upon by the Legislature throughout the legislative process,’ and thus ‘is
recognized as a primary indication of legislative intent’”].)
Commentators have recognized this purpose of section 2033, and that the purpose
of the FLARPL declaration is to provide the nonencumbering party with sufficient
information to determine whether the FLARPL attaches to more than the encumbering
party’s interest, and whether enforcing the lien might impair the overall equal division of
community assets and debts. (Hogoboom & King, Cal. Prac. Guide: Fam. Law, supra,
¶ 1:293, p. 1-99.) Thus, “perfection and enforceability of the lien are subject to several
‘carefully-drafted’ limitations.” (Id. at ¶ 1:291, p. 1-99.) “The notice must be
accompanied by a declaration under penalty of perjury setting forth . . . [t]he
encumbering party’s ‘belief’ as to the property’s fair market value, along with supporting
‘documentation.’” (Ibid.; see Cal. Fam. Law Rep. – Cal. Fam. Law Prac., § A.VIII
14
[notice of a FLARPL “must include [¶] (2) [t]he party’s opinion of the property’s fair
market value and documentation that supports that opinion”].)
Brauer argues that the requirement in section 2033, subdivision (b)(2), that the
encumbering party’s declaration include documentation supporting that party’s belief as
to the fair market value of the property, is inconsistent with the requirement in section
2033, subdivision (c)(2), that the objecting, nonencumbering party does not need to
include documentation in support or his or her belief. As Brauer correctly notes, section
2033, subdivision (c)(2), requires that the nonencumbering party state only his or her
“belief as to the appropriate items or value and any documentation supporting that
belief.” (Italics added.) From this difference in statutory language, Brauer argues
“what’s good for the goose, is good for the gander.” The Legislature, however, knows
the difference between geese and ganders. The language of the two subdivisions of
section 2033 are indeed different, but that only shows the contrary of what Brauer argues:
the Legislature differentiated between when documentation is mandatory and when it is
optional, and it is mandatory in subdivision (b)(2) and optional in subdivision (c)(2).
(See Kleffman v. Vonage Holdings Corp. (2010) 49 Cal.4th 334, 343 [“‘when different
words are used in contemporaneously enacted, adjoining subdivisions of a statute, the
inference is compelling that a difference in meaning was intended’”]; Regents of
University of California v. Superior Court (2013) 220 Cal.App.4th 549, 565 [“‘“[w]hen
the Legislature uses different words as part of the same statutory scheme, those words are
presumed to have different meanings”’”].) And the two subdivisions are different for a
good reason. The encumbering party has the statutory obligation to give detailed
information to the nonencumbering party to allow him or her to decide whether to object.
Once the nonencumbering party objects and the dispute proceeds to a court hearing, both
sides may introduce evidence of the fair market value of the property.
Brauer asserts that the court in In re Marriage of Ramirez, supra, 198 Cal.App.4th
336, indicated that section 2033, subdivision (b), requires only a declaration stating the
encumbering party’s belief as to fair market value, and not supporting documentation.
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Brauer argues, “If documentation was an important component or requirement, one
would think the Ramirez court would have said so. They [sic] did not.” Brauer’s
argument is based on an unfair reading of the Marriage of Ramirez opinion.
Summarizing section 2033, the court in Marriage of Ramirez stated: “Section 2033 sets
forth notice requirements and the procedure for obtaining a FLARPL. To be valid, a
notice of lien must be served personally or on the other party’s attorney of record at least
15 days before recordation. The notice must include a description of the real property,
the party’s belief as to fair market value, the amount of the attorney fees and other
information. (§ 2033, subd. (b).) Further, the statute sets forth the procedure for an
objection by the unencumbering spouse. (§ 2033, subd. (c).) The family law court has
jurisdiction to resolve any dispute arising from the existence of a FLARPL. (§ 2034,
subd. (c).)” (Marriage of Ramirez, at p. 343.) Marriage of Ramirez, however, did not
involve the documentation requirement of section 2033, subdivision (b)(2), but rather
whether an order extinguishing a FLARPL was void because the attorney who recorded it
was not joined as an indispensible party (and the court held the order was void). (Id. at
pp. 339, 344-345.) At the portion of the opinion cited by Brauer, the court was just
giving a general outline of the statutory requirements and procedure. And the court in its
summary did state that the notice had to include “other information,” which could include
the documentation required by subdivision (b)(2).
Brauer argues that the supporting documentation requirement in section 2033,
subdivision (b)(2), does not apply in this case because the “purpose behind the statute is
to provide adequate notice,” and there was “no issue” regarding whether Firth’s
“assessment of the value of the house and the amount of the FLARPL exceeded her
[community property] interest.” Brauer asserts that “if [Ciliberto] had an issue with
[Firth’s] value, he could have objected. He did not.” Ciliberto, however, did not have to
object in order to challenge the FLARPL. As noted, section 2033, subdivision (b), has
several requirements for a FLARPL notice, and the statute does not excuse those
requirements if the nonencumbering party does not object. To the contrary, subdivision
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(b) requires that the FLARPL notice contain the required information so that the
nonencumbering party can make a determination whether to object and have the court
decide the issue before the attorney records the FLARPL. Moreover, Ciliberto could still
challenge the FLARPL at a later time even if the notice of FLARPL complied with the
statute and he did not object at the time the attorney served it in compliance with
subdivision (b). Under section 2034, the court has jurisdiction to resolve any dispute
arising from the existence of a FLARPL, including after the attorney has recorded the
FLARPL and after the court has awarded the property to a spouse. (See Turkanis, supra,
213 Cal.App.4th at pp. 350-351 [“[t]he parties engage in the ex parte objection process
before the FLARPL exists, and section 2034, subdivision (c), contemplates disputes when
the FLARPL is already in ‘existence’”].)
Brauer cites to Lezine v. Security Pacific Financial, supra, 14 Cal.4th 56, in which
the court stated that “the award of community real property to one spouse that is subject
to a lien remains liable for satisfaction of the lien, i.e., the lien remains enforceable to
satisfy the underlying debt.” (Id. at p. 65.) That is the law. As the court in Turkanis
stated, “[t]he court’s division after trial of community or quasi-community property does
not ordinarily affect the enforceability of valid, preexisting liens on the property.”
(Turkanis, 213 Cal.App.4th at p. 348; see Ramirez, supra, 198 Cal.App.4th at pp. 343-
344 [“if a valid lien in favor of community property attached before the property was
awarded to one spouse as separate property, the spouse received the property subject to
the lien and the property remain[s] liable for satisfaction of the lien, even though the
underlying debt was assigned to the other spouse”].) Brauer, however, did not have a
valid lien, either before or after the division of community property.
Neither of Firth’s declarations complied with the statutory requirements of section
2033, subdivision (b). Therefore, they were invalid and did not create a FLARPL on
Firth’s community property interest in the property. (See, e.g., In re Scott (N.D.Bankr.
2009) 400 B.R. 257, 263 [“[i]f the attorney asserting the lien fails to comply with the
notice requirements . . . of Cal. Fam. Code § 2033, the lien will be invalid ab initio”].)
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The trial court did not abuse its discretion in granting Ciliberto’s motion to extinguish the
FLARPL.
C. Equitable Estoppel Did Not Bar Ciliberto from Seeking To Extinguish the
FLARPL
Brauer argues that the trial court should have precluded Ciliberto from attempting
to expunge the FLARPL because she proved all of the elements of equitable estoppel.
Brauer argues that Ciliberto “knew about the FLARPL in December [2010] and was
reminded again in March [2011]. He and Oxley knew about the FLARPL when
negotiating the Deal Memo [in January 2011,] [a]nd they knew about the FLARPL when
drafting the judgment” in July 2011. The trial court properly concluded, however, that
Brauer had not proven this equitable defense.
“‘[T]he doctrine of equitable estoppel is a rule of fundamental fairness whereby a
party is precluded from benefiting from his inconsistent conduct which has induced
reliance to the detriment of another. [Citations.] Under well settled California law four
elements must be present in order to apply the doctrine of equitable estoppel: (1) the
party to be estopped must be apprised of the facts; (2) he must intend that his conduct
shall be acted upon or must so act that the party asserting the estoppel had a right to
believe it was so intended; (3) the other party must be ignorant of the true state of facts;
and (4) he must rely upon the conduct to his injury . . . .’” (Turkanis, supra, 213
Cal.App.4th at p. 352.) “Generally, the existence of . . . estoppel . . . is a question of fact
for the trial court, whose determination is conclusive on appeal unless the opposite
conclusion is the only one that we can reasonably draw from the evidence.” (Id. at
p. 353; see Driscoll v. City of Los Angeles (1967) 67 Cal.2d 297, 305.)
As noted, however, section 2034 authorizes the nonencumbering party to file a
motion to extinguish a FLARPL at any time. Given the statutory language, Ciliberto’s
knowledge of the FLARPL prior to December 2011 (when he filed his first motion to
extinguish) did not preclude him from exercising his right under section 2034 to move to
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expunge the FLARPL at a later date. Finally, with respect to the second element of
estoppel, Brauer submitted no evidence that Ciliberto intended any conduct on his part to
be acted upon by Brauer in any way. There is no evidence Ciliberto consented to
Brauer’s FLARPL; he simply did not object when Brauer served him with her (defective)
FLARPL notices. The deal memo Ciliberto signed did not consent to or specifically
mention the FLARPL, and the stipulated judgment purported to extinguish any such
FLARPL.
DISPOSITION
The order is affirmed. Ciliberto is to recover his costs on appeal from Brauer.
SEGAL, J.
We concur:
ZELON, Acting P. J.
BLUMENFELD, J.*
*Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
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