Marriage of Jones and Ballard CA4/3 ( 2015 )

Filed 4/16/15 Marriage of Jones and Ballard 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
In re Marriage of JAMES SCOTT JONES
and HOLLIE AMBER BALLARD.
JAMES SCOTT JONES,
G050152
Respondent,
(Super. Ct. No. 14D001171)
v.
OPINION
HOLLIE AMBER BALLARD,
Appellant.
Original proceedings; petition for a writ of mandate to challenge an order of
the Superior Court of Orange County, Glenn R. Salter, Judge. Petition granted in part
and denied in part.
Chavis Law Firm, L. Michelle Chavis and Stephanie Finelli for Appellant.
John R. Schilling for Respondent.
I. INTRODUCTION
This is a dissolution case involving a short, five-year, marriage, no
children, a separate property business, an extremely high income on the part of the
husband, and no appreciable income on the part of the wife. It comes to us via a
premature appeal, which we treat as a de facto writ petition. We conclude the trial judge
did not abuse his discretion in not making the initial spousal order retroactive to the date
of filing. But we also conclude he could not refuse to award the low-income spouse any
funds at all for a forensic accountant, given the virtual certainty the proper litigation of
her case will require one.
II. FACTS
James Scott Jones filed for divorce from his wife Hollie A. Ballard on
February 6, 2014. Jones was 45 and Ballard 36, and the marriage had lasted 5 years, 4
months. There are no children.
On February 14, eight days after Jones’ filed his petition, Ballard filed what
is sometimes called in family law an “initial OSC” or order to show cause proceeding.
She asked the court to award her $21,900 in monthly spousal support pending trial. She
also asked the court to require Jones to pay the mortgage on the family home in
Capistrano Beach where Ballard continued to live, and make the payments on the BMW
she had kept. Finally, she sought to have the court require Jones to advance her $30,000
for attorney fees and another $30,000 to retain a forensic accountant.
Ballard alleged that Jones is the owner of a business, USD Products, that
earns at least $1 million a month. She estimated Jones’ monthly income at $62,000,
which works out to $744,000 a year, presumably before taxes. Her moving papers on the
request for $30,000 to retain a forensic accountant said she had to retain a forensic
accountant because she is “the out-spouse and [Jones] is self-employed.”
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The OSC took place about a month later. The hearing generated a minute
order reflecting a court reporter was present. And while it also reflects that both Jones
and Ballard were sworn to testify, it does not reflect that either party did testify. The
closest the minute order comes to substantive information received by the trial court was
a line indicating oral argument by counsel: “The Court receives [Ballard’s] proposed
support calculations; [Jones] refutes the calculations provided.”
As to monthly spousal support, the court awarded Ballard $14,100 a month,
required Jones to make the house mortgage and tax payments, and also make the car
payment. The value of the in-kind house and car payments, at least according to a later
declaration filed by Scott, is about $6,000 a month. The court ordered the support to
begin April 1. There was no provision for any retroactivity. The court also awarded
$20,000 in attorney fees, but payable at a rate of $2,000 a month. And it did not award
any money at all for a forensic accountant, though the denial of Ballard’s request in that
regard was expressly without prejudice. The minute order merely said the court was not
convinced “the business is more than separate property.” The minute order also directed
Jones’ counsel to prepare a formal “Findings and Order After Hearing” reflecting the trial
court’s orders.
III. DISCUSSION
Ballard has filed an appeal from the minute order of March 17. Her appeal
does not include a reporter’s transcript of the proceedings on that day. She presents two
arguments: (1) the trial court abused its discretion in not making the spousal support
payments retroactive to her February 14 filing date, and (2) the trial court abused its
discretion in not awarding any money for the costs of a forensic accountant, even if the
denial was without prejudice.
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Preliminarily, we deal with Jones’ argument the appeal must be dismissed
because of the absence of a formal “Findings and Order After Hearing.” Jones is correct
to the degree that the absence of signed findings technically renders Ballard’s appeal
premature. (See In re Marriage of Freitas (2012) 209 Cal. App. 4th 1059, 1072, fn. 12
[observing minute order was not appealable where court directed appellant’s counsel to
prepare order after hearing]; see also County of Alameda v. Johnson (1994) 28
Cal. App. 4th 259, 261, fn. 1 [“When a minute order expressly directs that a written order
be prepared, an appeal does not lie from the minute order, but only from the later
order.”].)
However, if circumstances warrant, this court has discretion to treat
Ballard’s premature appeal as a de facto petition for a writ of mandate. (Morehart v.
County of Santa Barbara (1994) 7 Cal. 4th 725, 745-747.) We exercise our discretion in
this case because we do not think Jones should receive the benefit of his counsel’s
omission. The minute order specifically directed Jones’ counsel to prepare the formal
findings document. Any prematurity in this appeal is thus Jones’ counsel’s fault.
Turning to the merits, both issues of retroactivity and costs for a forensic
accountant are tested under an abuse of discretion standard. (See In re Marriage of
Wittgrove (2004) 120 Cal. App. 4th 1317, 1327 [“We also review temporary spousal
support orders under the abuse of discretion standard.”]; see also In re Marriage of
Falcone & Fyke (2012) 203 Cal. App. 4th 964, 975 [in making pretrial attorney fee and
cost order, trial court “has broad discretion” and will not be reversed “absent a showing
that no judge could reasonably have made the order, considering all of the evidence
viewed most favorably in support of the order”].)
To be sure, there is no reporter’s transcript. That restricts the scope of our
review, but is not necessarily fatal to Ballard’s case on the merits. If reversible error (or
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abuse of discretion) appears on the face of the record, we may still correct it. (See
Allen v. Toten (1985) 172 Cal. App. 3d 1079, 1082-1083.)
On the retroactivity issue, no abuse of discretion appears on the face of the
record. The dissolution commenced February 6, the temporary order began April 1, so
the gap was less than two months. The minute order and Ballard’s own declaration in
support of her OSC give rise to a reasonable inference that Ballard lived in the Capistrano
Beach home continuously during that two-month period; it was Jones who moved out.
The same documents similarly indicate that Ballard had possession of a BMW
automobile over the same period. The value of those two items alone is around $6,000 a
month, so it isn’t true that Ballard effectively had no money during the period February 6
to April 1. The worst that can be said is that she simply didn’t have any cash coming in.
And in this regard, there is no showing that Jones cut off any of Ballard’s credit cards or
left her without money in a checking account. (There is, in fact, nothing in this record
involving bank records.) There is thus no showing in this record that Ballard suffered
any deprivations or incurred any debts for her living expenses during this relatively brief
gap period.
The two cases on which Ballard most relies on the retroactivity issue, In re
Marriage of Cheriton (2001) 92 Cal. App. 4th 269, and In re Marriage of Dick (1993) 15
Cal. App. 4th 144, are both inapposite. Cheriton involved an abuse of discretion by the
trial court in not making a permanent support order that included child support
retroactive to the date of filing a motion for modification. The abuse of discretion
stemmed from the trial court’s lack of focus on the needs of the couple’s children. (See
Cheriton, supra, 92 Cal.App.4th at p. 300 [“So far as we can glean from the record, the
court did not independently assess the children’s needs in acting on Iris’s request for a
fully retroactive support modification.”].) Here there are no children, and any inequity
can be cured in the final order.
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Dick involved a temporary support order extended to the maximum
conceivable extent, the date of filing of the petition. (See Dick, supra, 15 Cal.App.4th at
pp. 165-166.) But that extreme retroactivity was justified by the unusual circumstance of
the husband’s avoiding service of process for about two years, plus the resultant financial
distress the wife suffered in the interim. (See id. at p. 168 [noting that the husband there
“managed to evade service for 26 months” all the while wife was defending against
“efforts to evict her from the family residence”].) Here, Jones is the spouse who filed the
proceeding, and there is no indication of any financial distress on Ballard’s part.
The other issue – the denial of the request for funds to employ a forensic
accountant – is a different matter. The basic theory of pretrial attorney fee and cost
orders is to even out the playing litigation field between spouses of unequal incomes.
(See In re Marriage of Tharp (2010) 188 Cal. App. 4th 1295, 1315 [purpose is to permit
lower-earning spouse to have a comparable ability to obtain and pay for counsel in
litigating essential issues as the spouse with higher earnings]; see also Alan S. Jr. v.
Superior Court (2009) 172 Cal. App. 4th 238, 252 [“The idea is that both sides should
have the opportunity to retain counsel, not just (as is usually the case) only the party with
greater financial strength.”].)
While Ballard’s moving papers could have been more expansive as to the
need for a forensic accountant, the fact of the inequality of incomes between the spouses
and Jones’ operation of what appears to be a profitable business were still before the
court. If Ballard needs a forensic accountant at all, Jones is going to have to foot the bill,
particularly given that the attorney fee award is being parceled out at the rate of $2,000 a
month. It seems unreasonable to expect Ballard’s counsel to restrict her work or discount
her own fees so that Ballard can have access to a forensic accountant.
The question then becomes, did Ballard show she needed a forensic
accountant at the March 17 hearing? The trial judge didn’t think so, because he wasn’t
convinced USD Products is anything other than Jones’ separate property.
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The (probable) separate status of USD Products, however, is not dispositive
of Ballard’s need for a forensic accountant. In making his determination, the trial judge
overlooked the possibility of a “Pereira” community property component in the value of
what is otherwise Jones’ separate property business. (Pereira v. Pereira (1909) 156 Cal.
1.) Under Pereira, Jones’ community efforts over the past five years may have increased
the value of his separate business beyond a normal return on investment, hence there
might be a community component to its value. (See In re Marriage of Koester (1999) 73
Cal. App. 4th 1032, 1034, fn. 2 [“The Pereira problem typically arises when one spouse
owns a business before marriage and keeps working at it during the marriage. When the
couple divorce, the family law court is faced with the task of differentiating any increase
in the value of the business resulting from the ‘community effort’ of the spouse during
marriage from the return on his or her separate capital.”].) But ascertaining the existence
of any such increase in value from community efforts is going to require a forensic
accountant.1
Ballard has an additional need for a forensic accountant on the issue of
Jones’ true income. That figure seems to be a moving target. Ballard’s initial
impression, stated in her moving papers, was that the figure is $744,000 per year. In his
response to Ballard’s papers, Jones asserted a gross income of $569,448 per year, or
$47,454 gross monthly. That, after all, is what the couples’ tax returns for 2012 showed.
On the other hand, his income and expense declaration only admitted to income of
$35,749, or $428,988.
1 Ballard didn’t help her case by making gratuitous references in her moving papers to Jones’
alleged alcoholism. Normally, an alcoholism problem on the part of an operator-spouse of a separate business
would suggest that any growth in the value of the business was not the result of his or her efforts, but because of
economic circumstances and previous capitalization independent of that spouse’s efforts. (Cf. Van Camp v. Van
Camp (1921) 53 Cal. App. 17, 28 [“in the instant case, it is impossible to say what part of the enormous dividends
paid by the Van Camp Sea Food Company should be apportioned to the skill and management thereof and what part
should be apportioned to the investment of the capital and the favorable conditions under which the business was
conducted”].) That said, we cannot on this record assume that Jones’ efforts necessarily did not contribute to the
growth of his separate business.
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On another point, we cannot now say, as a matter of law, that after
litigation of the case there will be absolutely no support ordered at all. At least on this
record, a step-down order is not beyond possibility. (See Hogoboom et al., Cal. Practice
Guide: Family Law (The Rutter Group 2015) ¶ 6:1040, p. 6-376.1 [“Even where open-
ended or ‘permanent’ support is inappropriate after a short marriage, a short period of
postjudgment support may be warranted to assist the ‘economically disadvantaged’
spouse in making an orderly and less traumatic transition to self-supporting status.”].)
We are mindful that the trial judge denied the motion for a forensic
accountant “without prejudice,” reserving the possibility it could be considered at a later
date. But we don’t think that will suffice. The point of pre-trial attorney fee and cost
orders is to insure that the lesser-income spouse has the same opportunity to present his
or her case as does the higher-income spouse. At the very least, the trial judge’s denial of
the forensic accountant request necessitates a needless expenditure of funds awarded for
attorney fees to prepare another request for accounting fees, itself made problematic by
the rationing of attorney fees to $2,000 a month. As we have discussed, Ballard has a
genuine need for a forensic accountant, and that accountant needs to get working right
away.
IV. DISPOSITION
We do not dismiss Ballard’s premature appeal. Rather, we treat it as a
petition for writ of mandate. Treating it as such, we deny the petition to the extent it
challenges the trial court’s decision to commence the pendente lite spousal support order
on April 1 instead of February 14. However, we grant the petition to the extent it seeks to
vacate the trial court’s outright denial of all costs for a forensic accountant. We direct the
trial court to vacate its denial order, and determine a reasonable amount for such costs.
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The trial court will have discretion, at the conclusion of the litigation, to
apportion the costs of this writ proceeding as it, in its reasonable discretion, deems
appropriate.
BEDSWORTH, ACTING P. J.
WE CONCUR:
MOORE, J.
THOMPSON, J.
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