Marriage of Whittlesey CA4/3 ( 2022 )

Filed 8/25/22 Marriage of Whittlesey 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 AUDREY and
ANDREW WHITTLESEY.
AUDREY DALE WHITTLESEY,
G060180
Appellant,
(Super. Ct. No. 16D006973)
v.
OPINION
ANDREW BOLGIANO WHITTLESEY,
Respondent.
Appeal from a judgment of the Superior Court of Orange County, Franz E.
Miller, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed.
Sullivan Law & Associates, Richard P. Sullivan and Steve Ra for
Appellant.
Law Offices of Marjorie G. Fuller, Marjorie G. Fuller; Law Offices of
Teresa McNamara, Teresa McNamara; Law Offices of Lisa R. McCall and Lisa R.
McCall for Respondent.
* * *
After judgment was entered in a marital dissolution matter, the trial court
denied the wife’s request for attorney fees and for prejudgment interest. The court found
the wife did not make an initial showing of lack of parity in the parties’ ability to retain
counsel, justifying the court’s denial of a need-based attorney fees request under Family
1
Code section 2030. The court properly exercised its discretion in denying the request for
attorney fees pursuant to section 1101, subdivision (h), as the court had awarded the wife
100 percent of the community property assets the husband transferred in breach of his
fiduciary duties. For the same reason, the court did not err in denying an award of
prejudgment interest on those community property assets. The wife now appeals. We
affirm the judgment.
I
FACTS AND PROCEDURAL BACKGROUND
2
Audrey Whittlesey filed a petition for legal separation from Andrew
Whittlesey in August 2016, after 55 years of marriage. Andrew responded to the petition
with a request for dissolution of the marriage. A status only judgment of dissolution was
entered in February 2017.
The parties stipulated to the appointment of the Honorable Franz E. Miller
(Ret.) to hear all remaining matters as a temporary judge; trial was conducted over
multiple days in February 2020. After trial, the parties filed multiple briefs and
supporting documents regarding attorney fees. The court issued three oral or written
tentative rulings, and three statements of decision.
1
Unless otherwise specified, all further statutory references are to the Family Code.
2
We refer to the parties by their first names to avoid confusion because those involved
share the same last name.
2
Judgment on reserved issues was entered in March 2021. As is relevant to
this appeal, the judgment provides as follows:
1. Andrew breached his fiduciary duty to Audrey by transferring several
3
community property assets to his girlfriend. Because the court found that Andrew acted
with fraud, malice, and/or oppression in doing so, Audrey was awarded 100 percent of
these assets pursuant to section 1101, subdivision (h);
2. Audrey failed to prove Andrew breached his fiduciary duty as to other
transfers of community property;
3. Andrew was required to make a $1,131,214 million equalization
payment to Audrey;
4. Each party would bear their own attorney fees and costs;
5. The court chose not to exercise its discretion to award Audrey attorney
fees under section 1101, subdivision (h), in addition to the award of 100 percent of those
community property assets;
6. Audrey did not request need-based attorney fees under section 2030.
Even if she had, the court found she had failed to show any inequity between the parties’
ability to pay attorney fees, in light of “the magnitude of assets, inclusive of the
magnitude of the assets [Audrey] gains from the award under Family Code § 1101(h), the
substantial multi-million dollar value of the community estate being divided, and the fact
that both sides spent over one million dollars in attorney’s fees and costs contesting the
issues of this case, and all other applicable statutory factors.” The court therefore
exercised its discretion not to award her need-based attorney fees; and
3
At the time of these transfers, Audrey was (and still is) suffering dementia. After
Audrey and Andrew’s marriage was dissolved, Andrew married the girlfriend.
3
7. Although the court had discretion to award prejudgment interest, it did
not do so in this case because, among other things, it was awarding 100 percent of the
improperly transferred community property interests to Audrey.
4
Audrey filed a notice of appeal.
II
DISCUSSION
A. Standard of Review
The issue of attorney fees “‘in a dissolution proceeding is left to the sound
discretion of the trial court.’” (In re Marriage of Duncan (2001) 90 Cal.App.4th 617,
630.) We must affirm the order granting or denying attorney fees “unless ‘“no judge
could reasonably make the order made.”’” (Ibid.) Similarly, we review for abuse of
discretion the trial court’s order awarding or denying prejudgment interest. (Esgro
Central, Inc. v. General Ins. Co. of America (1971) 20 Cal.App.3d 1054, 1064.)
B. Attorney Fees
On appeal, Audrey challenges the trial court’s decisions not to shift
attorney fees under sections 2030 and 2032, and not to award her attorney fees for
5
Andrew’s breach of fiduciary duty under section 1101, subdivision (h).
4
Andrew filed a notice of cross-appeal. On the parties’ stipulation, this court dismissed
the cross-appeal.
5
In the trial court, Audrey also requested attorney fees under sections 271 and 2107,
subdivision (c). The court denied the request under these sections. Audrey does not
make any argument in her appellate briefs specific to these issues; they have therefore
been forfeited. An argument not separately raised under its own heading and supported
by cogent argument and citation to authority is deemed waived. (Winslett v. 1811 27th
Avenue LLC (2018) 26 Cal.App.5th 239, 248, fn. 6; Pizarro v. Reynoso (2017) 10
Cal.App.5th 172, 179; Roe v. McDonald’s Corp. (2005) 129 Cal.App.4th 1107, 1114; see
Cal. Rules of Court, rule 8.204(a)(1)(B).)
4
1. Sections 2030 and 2032
The purpose of need-based attorney fees under sections 2030 and 2032 is to
“ensure that each party has access to legal representation” in marital dissolution matters.
(§ 2030, subd. (a)(1); In re Marriage of Falcone & Fyke (2012) 203 Cal.App.4th 964,
974-975; In re Marriage of Rosen (2002) 105 Cal.App.4th 808, 829.) To determine
whether a party is entitled to fees under those statutes, the court must first make findings
on “whether an award of attorney’s fees and costs under this section is appropriate,
whether there is a disparity in access to funds to retain counsel, and whether one party is
able to pay for legal representation of both parties.” (§ 2030, subd. (a)(2).)
Once a party’s entitlement to fees has been determined under section 2030,
the trial court proceeds to decide what amount of fees would be “just and reasonable
under the relative circumstances of the respective parties.” (§ 2032, subd. (a).) This
determination requires the court to consider the factors set forth in section 4320. (§ 2032,
subd. (b).) “The fact that the party requesting an award of attorney’s fees and costs has
resources from which the party could pay the party’s own attorney’s fees and costs is not
itself a bar to an order that the other party pay part or all of the fees and costs requested.
Financial resources are only one factor for the court to consider in determining how to
apportion the overall cost of the litigation equitably between the parties under their
relative circumstances.” (§ 2032, subd. (b).)
a. Audrey did not request need-based attorney fees under section 2030.
The first question we must consider is whether Audrey made a request for
attorney fees under section 2030. Her appellate briefing assumes that a trial court may
order one party to pay the other’s attorney fees in a dissolution matter under section 2032
without first finding under section 2030 that such an award is necessary to achieve parity
between the parties in their ability to retain counsel. The language of section 2030
requires the trial court to make findings that (1) an attorney fees and costs award is
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“appropriate,” (2) “there is a disparity in access to funds to retain counsel,” and (3) one
party is able to pay for both parties’ legal representation, before considering whether an
award of attorney fees by one party to the other is appropriate. (§ 2030, subd. (a)(2);
Mooney v. Superior Court (2016) 245 Cal.App.4th 523, 536 [error to make attorney fees
award absent “disparity” findings].) The language of section 2032, subdivision (a),
makes clear that the trial court “make[s] an award of attorney’s fees and costs under
Section 2030 or 2031.” Therefore, if Audrey did not request fees under section 2030 and
make an initial showing that there was a disparity between her and Andrew’s access to
funds to retain counsel, the trial court would not have erred in denying an award of
attorney fees under section 2032.
In Andrew’s posttrial brief regarding attorney fees, he stated: “[D]uring
trial, Audrey’s counsel represented that he was withdrawing Audrey’s claim for need-
based fees pursuant to Family Code §2030 and sanctions pursuant to Family Code §271.”
Audrey’s trial court briefs regarding attorney fees and costs do not
affirmatively show a request or evidentiary proof that attorney fees should be shifted due
to financial need. Her first brief regarding attorney fees, costs, and sanctions, filed in
March 2020 after the court had orally issued its tentative ruling and findings, says the
following regarding section 2030: “Family Code §2030 et. seq. gives the Court power to
make an award of attorney’s fees and costs based on the parties’ respective needs and
ability to pay. At the time of filing the dissolution action, [Audrey] was unaware that the
community estate was worth over $25 million. Accordingly, [Audrey] had to engage in
massive discovery and independent investigation as to the true nature and extent of the
estate, as [Andrew] was not trustworthy. [¶] All the fees and costs incurred by
[Audrey]’s counsel were reasonable and necessary, in light of [Andrew]’s recalcitrance in
this action (using community funds without proper notice and consent).” As of that time,
Audrey had incurred $1.7 million in fees. The brief did not identify any of the section
4320 factors.
6
Audrey filed another brief regarding attorney fees and costs in July 2020.
Again, this brief did not claim entitlement to attorney fees under section 2030 but did
contend, under section 2032, that “a consideration of all the relevant circumstances
makes it just and equitable for an award of contributory attorney’s fees and costs by
[Andrew].” (Capitalization omitted.)
In the statement of decision issued August 6, 2020, the trial court stated:
[6]
“The tj awaits further briefing and declarations on any claim for fee shifting under
Family Code sections 2030 et sequitur [¶] [but] . . . it is extremely unlikely the tj would
engage in any fee shifting given the magnitude of assets each party will receive.” In an
amended statement of decision, the court restated the foregoing language, but added that
“[e]ach party shall bear his or her attorney fees.” After Audrey objected to the amended
statement of decision, in part, because the court had not allowed any argument on the
issue of attorney fees, the court vacated the statement of decision and ordered a
telephonic argument regarding attorney fees.
Audrey filed a supplemental brief regarding attorney fees and costs. The
substance of this brief addresses only her claim to an award of attorney fees as a sanction
under sections 1101 and 2107—not under the fee-shifting provisions of section 2030.
At the telephonic hearing on September 30, 2020, the parties focused on the
availability of attorney fees under sections 1101, subdivision (h), and 2107; section 2030
was not mentioned.
The trial court’s finding that Audrey did not “request attorney fees payment
on a needs basis under Family Code § 2030 et sequitur” is supported by substantial
evidence.
6
The temporary judge referred to himself as the “tj” in many orders and other
documents.
7
b. The trial court did not err by denying Audrey’s request for need-based
attorney fees.
Even if Audrey had properly raised the issue, we would conclude that the
trial court did not err by denying a request for need-based attorney fees shifting under
section 2030. After a spouse demonstrates an inequity in the parties’ ability to retain
counsel, the court must then decide whether to shift fees and by how much. (§ 2032.) As
Andrew notes in his respondent’s appellate brief, in making a need-based fees order the
court must first determine whether an award of attorney fees is appropriate, and only then
does the court consider the section 4320 factors as part of its determination as to what
amount of an award is just and reasonable.
When the parties have roughly equal financial means, the court may in its
discretion choose not to make a fee-shifting award under section 2030. (Hogoboom &
King, Cal. Practice Guide: Family Law (The Rutter Group 2022) ¶ 14:159.2, p. 14–63;
In re Marriage of Winternitz (2015) 235 Cal.App.4th 644, 658 [court did not err in
denying one spouse’s fee request, although the other spouse had a larger income, because
both spouses had “‘considerable indebtedness’ and neither could afford counsel”]; In re
Marriage of Duncan, supra, 90 Cal.App.4th at pp. 630-631 [no abuse of discretion in
denying § 2030 request for fees and costs where husband’s income was much greater
than wife’s income, but wife was awarded significant amount of liquid assets in
dissolution].)
The trial court may consider the parties’ relative need and ability to pay in
light of their circumstances after the property division. (§ 2032, subd. (c); In re Marriage
of McTiernan & Dubrow (2005) 133 Cal.App.4th 1090, 1110-1111; In re Marriage of
Duncan, supra, 90 Cal.App.4th at p. 631; Hogoboom & King, Cal. Practice Guide:
Family Law, supra, ¶ 14:169, pp. 14–68 to 14–69.)
Audrey contends the trial court failed to consider any of the “relative
circumstances” applicable to the decision on “how to apportion the overall cost of
8
litigation equitab[ly] between the parties.” Therefore, she argues, the court failed to
exercise any discretion, resulting in an abuse of discretion. (Riskin v. Downtown Los
Angeles Property Owners Assn. (2022) 76 Cal.App.5th 438, 445-446.) Audrey’s briefing
in the trial court acknowledged “most of the [section] 4320 factors are not applicable in
this case, due to the parties’ age and size of the marital estate,” but urged the court to
consider section 4320, subdivisions (h) (age and health of parties), (k) (balance of
hardships between the parties), and (n) (any other factors the court determines are just
and equitable). In her appellate briefing, Audrey contends that the following factors
supported her request for fees under section 2032: (1) her cognitive decline and
residence in an assisted living home; (2) Andrew’s bad faith in transferring community
property to his girlfriend, which the trial court described as “despicable”; (3) Andrew’s
bad faith settlement offers; (4) Audrey’s need to hire expert witnesses including a
handwriting expert, business and property appraisers, and a forensic accountant; and
(5) the need to engage in extensive discovery.
The judgment states the trial court considered Andrew’s transfer of
community property and the resulting award of that property to Audrey, as well as the
impact of the parties’ litigation strategies on the fees incurred. “[Audrey] has provided
no showing as to inequity arising from each party bearing their own fees and costs.
Given the magnitude of assets, inclusive of the magnitude of the assets [Audrey] gains
from the award under Family Code § 1101(h), the substantial multi-million dollar value
of the community estate being divided, and the fact that both sides spent over one million
dollars in attorney’s fees and costs contesting the issues of this case, and all other
applicable statutory factors, the Court declined to award an attorney fee shift pursuant to
Family Code §§ 2030 and 2032.”
The trial court specifically considered all of the factors Audrey claims were
relevant, and the judgment also states that the court had considered “all other applicable
statutory factors.” A trial court does not need to address each of the section 4320 factors
9
separately to establish a proper exercise of discretion. (In re Marriage of Diamond
(2021) 72 Cal.App.5th 595, 603-604.) The court here properly exercised its discretion in
reaching its decision not to award need-based attorney fees.
Audrey’s reliance on In re Marriage of Dietz (2009) 176 Cal.App.4th 387(Dietz) is misplaced. As is relevant here, that opinion holds: “The proper legal standard
for determining whether to award attorney fees [under sections 2030 and 2032] is not
whether the proceedings were brought in good faith or in earnest, or even whether the
party requesting attorney fees and costs had the resources to pay attorney fees without
considering other factors.” (Id. at p. 406.) As a need-based award should not be made by
determining whether one party acted in good faith, so too it should not be made based on
one party’s bad faith conduct. Also, while the alleged excessiveness of one party’s
litigation strategies may be an appropriate factor to consider under section 4320 (if one
gets to that point in the analysis), the trial court is in the best position to consider the
appropriateness of the parties’ settlement offers, the extent and nature of the discovery,
and the need for expert witnesses.
2. Section 1101, Subdivision (h)
Section 1101 provides remedies for one spouse’s breach of fiduciary duty
vis-à-vis the other spouse’s community property. If the breaching spouse acts with
malice, fraud, and/or oppression, the trial court shall award to the nonbreaching spouse
100 percent of the undisclosed or transferred asset. (§ 1101, subd. (h).) The court also
has the discretion to award attorney fees to the nonbreaching spouse. (In re Marriage of
Rossi (2001) 90 Cal.App.4th 34, 42 [“‘The clear import of the language in subdivision (h)
is that an award of attorney fees is discretionary, over and above the mandatory award of
the entire asset at issue’”]; In re Marriage of Hokanson (1998) 68 Cal.App.4th 987, 993
[same].)
10
In this case, the court found Andrew breached his fiduciary duty to Audrey
by transferring community property assets to his girlfriend and awarded Audrey
100 percent of those community property assets, totaling $1,701,845. However, the court
exercised its discretion not to award attorney fees to Audrey. The judgment reads, in
relevant part: “Under all the circumstances of the case, the Court deemed the assets
awarded to be sufficient sanctions regarding that malfeasance and exercised its discretion
to not award attorney fees pursuant to this section.”
Audrey compares the trial court’s use of the size of the marital estate to
deny attorney fees as equivalent to the trial court’s error in Dietz, supra, 176
Cal.App.4th at page 406. In Dietz, the court was considering a request by one spouse for
an award of attorney fees from the other spouse “‘based on their relative circumstances.’”
(Id. at p. 405.) The court was not considering a trial court’s exercise of its discretion to
deny attorney fees under section 1101, subdivision (h). Under section 1101,
subdivision (h), there are no required findings and no statutory factors to consider; an
award of attorney fees under this statute is solely a matter of what the court in its
discretion believes is an appropriate sanction.
Audrey claims the trial court’s decision “results in a miscarriage of justice”
because the court focused on the amount of the community property being transferred to
Audrey without focusing on the fees Audrey incurred to obtain that result—$720,000.
Neither in the briefs nor in the documents filed in the trial court does Audrey provide any
evidentiary support for this claim. (See Andrew’s trial brief listing outstanding issues:
“[Audrey] alleges 40% of her attorney fees were expended on the issues of secret
stock/cash transfers and Canterbury house/funds. As is discussed below, [Audrey]’s
figures on these issues have no basis within the supporting documentation and in fact, the
evidence presented at trial show the figures are a farce. However, by [Audrey]’s alleged
breakdown, [Audrey] wasted 40% or approximately $720,000 on issues which could
11
have been resolved two years ago if [Audrey] engaged in the settlement discussions
[Andrew] put forth.”
More importantly, the trial court explicitly stated it had considered “all the
circumstances of the case” and that the award of the community property assets to
Audrey was a “sufficient sanction[]” against Andrew. Section 1101, subdivision (h),
gives the court the discretion to impose sanctions against a spouse breaching a fiduciary
duty in addition to the award of the property to the nonbreaching spouse. The record
indicates to this court that the trial court exercised its discretion not to award more
sanctions. We find no error.
C. Prejudgment Interest
The trial court’s judgment reads as follows regarding prejudgment interest:
“As a general rule, pre-judgment interest is not obtainable in the absence of statutory
and/or common law authority; Civil Code § 3288 provides for interest in cases not based
on contract (and, in particular, those involving fraud, etc.), at the jury’s discretion; the
section applies to court trials, such as this one, as well. [Citation.] The Court considered
all of the dynamics in the case, including but not limited to its award of 100% of certain
community property assets to [Audrey] pursuant to Family Code § 1101(h), and the Court
exercises its discretion not to award pre-judgment interest on any of the assets with
respect to which it [was] sought. As such, [Audrey]’s request for the addition of . . .
prejudgment interest on numerous assets is denied.”
Andrew argues initially that prejudgment interest is not permitted in family
law cases. Andrew argues that because harsher penalties—namely, the award of
100 percent of the affected assets—are available under section 1101, prejudgment interest
is not available. Andrew cites no published case supporting his argument, and the
relevant authorities are to the contrary.
12
Prejudgment interest may be awarded in the discretion of the trier of fact in
any “action for the breach of an obligation not arising from contract” and in “every case
of oppression, fraud, or malice.” (Civ. Code, § 3288; Bullis v. Security Pac. Nat. Bank
(1978) 21 Cal.3d 801, 814, fn. 16.) “For more than a century it has been settled that one
purpose . . . of prejudgment interest in general, is to provide just compensation to the
injured party for loss of use of the award during the prejudgment period—in other words,
to make the plaintiff whole as of the date of the injury.” (Lakin v. Watkins Associated
Industries (1993) 6 Cal.4th 644, 663-664.) Prejudgment interest is available unless
expressly prohibited by a statutory scheme. (Doppes v. Bentley Motors, Inc. (2009) 174
Cal.App.4th 1004, 1009-1011.)
Andrew relies on California Rules of Court, rule 5.17, which provides: “A
party in a family law proceeding may only ask that the court make orders against or
involving the other party, or any other person, that are available to the party in these
rules, Family Code sections 17400, 17402, and 17404, or other sections of the California
Family Code.” Section 1101, subdivision (h), provides that the remedies for a breach of
fiduciary duty by a spouse include but are not limited to awarding the full value of the
community property asset to the nonoffending spouse. We note that section 1101,
subdivision (h), does not prohibit an award of prejudgment interest.
While we have found no published case that specifically holds that
prejudgment interest may be awarded in a family law matter, in some cases the appellate
court has addressed the issue of prejudgment interest without questioning its availability.
(See In re Marriage of Brandes (2015) 239 Cal.App.4th 1461, 1488 [wife waived the
issue of prejudgment interest on damages due to husband’s alleged breach of fiduciary
duty]; Patrick v. Alacer Corp. (2011) 201 Cal.App.4th 1326, 1344-1345 [affirming award
of prejudgment interest under Civ. Code, § 3288 to surviving spouse for the period in
which she was unable to use her community property interest in deceased spouse’s stock
in defendant corporation].)
13
Based on all the foregoing, we conclude that the trial court had the
authority to award prejudgment interest to Audrey in its discretion.
We further conclude, however, that the trial court did not abuse its
discretion by opting not to award prejudgment interest to Audrey. Audrey argues that the
court failed to exercise any discretion in reaching its decision. To the contrary, as noted
above, the court considered the total amount Audrey was receiving by being awarded the
full value of the specified community property assets, as well as the “dynamics” of the
case. A trial court need not explain in detail everything it considers in order to establish
it has exercised its discretion. Here, the court fully explained why it was choosing not to
order prejudgment interest as a further sanction against Andrew for his breach of
fiduciary duty. We find no error.
III
DISPOSITION
The judgment is affirmed. Respondent to recover costs on appeal, with the
exception of costs related to the appeal of the Nido Way property, as to which the parties
stipulated they would bear their own costs when dismissing that issue from the present
appeal.
MOORE, J.
WE CONCUR:
BEDSWORTH, ACTING P. J.
MOTOIKE, J.
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