Menezes v. McDaniel ( 2020 )

Filed 12/18/19; Certified for Publication 1/15/20 (order attached)
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
NATACHE GONCALVES MENEZES, D074434
Plaintiff and Appellant,
v. (Super. Ct. No. DS51030)
TIM MCDANIEL,
Defendant and Respondent.
APPEAL from an order of the Superior Court of San Diego County, Sharon
Kalemkiarian, Judge. Reversed and remanded.
Dennis Temko for Plaintiff and Appellant.
Bickford Blado & Botros and Andrew J. Botros, for Defendant and Respondent.
INTRODUCTION
Following protracted postjudgment litigation over the transfer of title of real
property from Natache Goncalves Menezes (Wife) to Tim McDaniel (Husband), the court
issued $200,000 in sanctions against Wife, pursuant to Family Code,1 section 271. Wife
challenges the sanctions, contending they improperly include anticipated attorney fees
1 Further section references are to the Family Code unless otherwise specified.
and costs, and the amount is not supported by substantial evidence showing they are
tethered to attorney fees and costs. We conclude the superior court did not abuse its
discretion by awarding the sanctions, including the anticipated fees and costs. However,
we remand the matter for review to ensure that the bases for the $200,000 award include
only expenses tethered to attorney fees and costs.
BACKGROUND AND PROCEDURAL FACTS
Husband and Wife were married October 9, 2004. They separated sometime in
the first half of 2013, and Wife filed a petition for dissolution of marriage in June 2013.
During dissolution proceedings, the parties disputed ownership of a home on Rua
Quatrini Bianchi in Brazil (the Quatrini property). Because it was difficult for Husband
to purchase the property in Brazil as a foreigner, Wife completed the paperwork and
purchase of the home. She had the property titled in her name. However, Husband had
used separate property funds for the purchase, and the court awarded it to Husband alone.
In May 2015, the court ordered Wife to transfer title to the Quatrini property to
Husband's name.
The court entered judgment of dissolution in September 2015. In August 2016,
Husband filed a request to enforce the judgment. Following a December 2016 hearing,
the court ordered Wife to sign any documents and take any action necessary to put title to
the Quatrini property in Husband's name by January 12, 2017.
When Wife failed to transfer the property to Husband by the deadline, Husband
filed an order to show cause for contempt in February 2017. Wife was found guilty of
contempt August 4, 2017.
2
At an August 29, 2017 review hearing, the court issued $10,000 in contempt
sanctions, to be taken from Wife's community property share of an HSBC joint account
where she had $8,961.50. The court directed the balance to be paid from Wife's
community property interest in stock shares that had been divided during the dissolution
proceedings. The court also directed Wife not to make any disposition or encumbrances
on the Quatrini property. The court ordered Wife to execute a power of attorney in
accordance with instructions from Husband's Brazil attorney within 30 days. The
attorney provided Wife with instructions on September 26, 2017. "Any and all costs and
fees associated with the transfer" of the Quatrini property were to be deducted from
Wife's community property interest in the remaining shares. The specific amount was
not identified.
On October 5 at an ex parte hearing, the court instructed Wife to deliver a
perfected power of attorney to allow for the transfer of the Quatrini property to Husband
by October 16, 2017.
On October 27, 2017, Wife sent Husband's attorney a scanned copy of the power
of attorney instead of the original. Wife eventually delivered the required, original power
of attorney to someone from Husband's attorney's office in front of the courthouse on a
court holiday, November 10.
When Husband's attorney in Brazil began the process of transferring the property
to him in early December 2017, she discovered that Wife's mother, functioning as Wife's
agent through a power of attorney in Brazil, signed an agreement and admission of debt
giving the Quatrini property to Wife's Brazilian attorney as payment for debt of legal fees
3
Wife owed. The transfer was approved by the Brazilian courts. Husband's Brazilian
attorney filed a motion to stay the execution of the judicial lien against the Quatrini
property, and the Brazilian court granted the request.
In January 2018, Husband filed a request for attorney fees and sanctions related to
the ongoing litigation surrounding the Quatrini property. He requested sanctions under
Family Code sections 271, 1101, 2031, 2121, 2122, and Code of Civil Procedure sections
128.5, 128.7, and 3294.2 He sought $500,000 in sanctions plus the return of half of his
retirement account of $130,000. Husband identified the following expenses related to
litigating the transfer of the Quatrini property: approximately $80,000–$90,000 in
California attorney fees and $17,000 in Brazil attorney fees, which included $7,000 in
fees to be paid to the Brazil attorney to file the process to stop the transfer of the Quatrini
property to Wife's attorney; plus an additional 10 percent of the value of the Quatrini
home to be paid to the Brazil attorney. He testified to a $10,000 fee to transfer the
property from Wife's name to Husband's name; delinquent property taxes amounting to a
minimum of $9,000; translation fees of approximately $5,300; $18,000 in international
flights to attend hearings in California; and $9,000 in lost vacation time. His attorney
also told the court he would be required to pay 20 percent of the value of the property in
legal fees to his Brazilian attorney, $24,127.10.
The court heard arguments in March 2018. Wife argued she had not complied
with the court order to transfer the property because she was engaged in litigation over
2 Because the court awarded sanctions only under section 271, we do not address
the other statutes.
4
the property in Brazil, attempting to evict "squatters," residents who had been living in
the home at the invitation of Husband and Wife. She told the court she did not agree to
give the Quatrini property to her Brazilian attorney as satisfaction for her legal debt; the
court "arrested" the home from her and "assigned" it to her Brazilian attorney. She
denied knowing before November 30, 2017 that her mother had signed the relevant
documents.
Husband testified that he had already paid fees and costs to his Brazilian attorney
in the amount of $24,127, and he believed he would have additional fees of about $6,000
to $8,000. Translation fees had reached $5,300. He told the court he had used 34 days of
vacation valued at $9,000 and had spent $18,000 in international flights to attend
hearings in connection with the Quatrini property.
The court issued its order April 30, 2018. It awarded Husband $200,000 in cash
sanctions under section 271. The court explained Wife's "actions thwarted any
enforcement of the court's orders[] and caused protracted litigation around an issue that
was heard and settled by the Court at numerous hearings—namely, the transfer of
Husband's separate property home in Brazil by Wife to Husband." The court noted Wife
had the ability to pay the sanctions and directed her to do so by offsetting the spousal
support Husband was paying,3 using her share of the community property stock account,
3 In its April 30 order, the court valued the spousal support offset at $28,500. The
court later corrected the offset amount to $8,500. This did not impact the total sanction
amount or the use of Wife's community property share of the stocks as payment.
5
which the court valued at $29,000, and then paying the balance remaining from other
resources.
The court outlined the timeline of Wife's noncompliance with its various title
transfer orders and further explained Wife "appear[ed] to have been deliberately hiding
information" by giving her mother a power of attorney to deal with litigation over the
Quatrini property and not informing Husband that the property had been assigned to her
Brazilian attorney to satisfy a debt. The court concluded that Wife's testimony that she
did not know her mother had paid the debt by transferring the Quatrini property was not
credible.
Wife timely appealed.
DISCUSSION
I.
Motion to Dismiss Under Disentitlement Doctrine
In his respondent's brief, Husband invited us to affirm the trial court's judgment on
the basis of the disentitlement doctrine. Wife argued in her reply that such an argument
must be brought in a separate motion on appeal. Accordingly, Husband filed a separate
motion to dismiss based on the disentitlement doctrine, which Wife opposed. We deny
the motion.
At the superior court's direction, the parties presented proposed settled statements
for the appellate record. The court set a hearing to review and correct the proposed
statement. It asked the parties to explain how they created their respective summaries
6
and to provide the court with any recordings that may have formed the bases of the
proposed settled statements.
The court concluded that Wife had surreptitiously recorded proceedings in
violation of California Rule of Court 1.150. It found that neither it nor Husband was
aware that Wife was telephonically recording the proceedings. The court adopted
Husband's settled statement, with one amendment to correct the court's language.
The disentitlement doctrine "is a discretionary tool that may be used to dismiss an
appeal when the balance of the equitable concerns makes dismissal an appropriate
sanction. [Citation.] The rationale underlying the doctrine is that a party to an action
cannot seek the aid and assistance of an appellate court while standing in an attitude of
contempt to the legal orders and processes of the courts of this state. [Citation.] No
formal judgment of contempt is required under the doctrine of disentitlement. [Citation.]
An appellate court may dismiss an appeal where the appellant has willfully disobeyed the
lower court's orders or engaged in obstructive tactics." (Gwartz v. Weilert (2014) 231
Cal. App. 4th 750, 757-758.)
We decline to exercise our discretion to dismiss Wife's appeal. Although we do
not condone a party violating the rules of court and recording proceedings without
advance permission, we believe the superior court was the appropriate place to raise this
concern. The superior court was aware of the violation and opted to accept Husband's
proposed settled statement over Wife's. Accordingly, we deny this motion
II
Family Code Section 271 Sanctions
7
Wife contends the trial court erred in awarding $200,000 as a cash sanction
because it improperly awarded anticipated fees and costs, and it included in the sanction
expenses not tethered to attorney fees and costs. She asks us to reverse $68,700 in
sanctions. We conclude the court properly included anticipated fees and costs in the
sanction amount. However, we remand the matter for additional consideration to ensure
the sanction is tethered to attorney fees and costs.
A.
Legal Principles
Imposing sanctions under section 271 is within the discretion of the trial court. (In
re Marriage of Feldman (2007) 153 Cal. App. 4th 1470, 1478 (Feldman).) We reverse the
award on appeal "only on a showing of abuse of that discretion, that is 'only if,
considering all of the evidence viewed more favorably in its support and indulging all
reasonable inferences in its favor, no judge could reasonably make the order.' " (In re
Marriage of Davenport (2011) 194 Cal. App. 4th 1507, 1524.) We review findings of fact
forming the basis of a sanctions award for substantial evidence. (In re Marriage of
Corona (2009) 172 Cal. App. 4th 1205, 1226 (Corona).) " 'The trial court's order will be
upheld on appeal unless the reviewing court, "considering all of the evidence viewed
most favorably in its support and indulging all reasonable inferences in its favor, no judge
could reasonably make the order." [Citation.]' " (Sagonowsky v. Kekoa (2016) 6
Cal.App.5th 1142, 1152 (Sagonowsky).)
B.
Anticipated Fees and Costs
8
We first address Wife's contention that anticipated attorney fees and costs
associated with transferring the house to Husband are not awardable under section 271.
The interpretation of a statute is a question of law, subject to de novo review.
(Goodman v. Lozano (2010) 47 Cal. 4th 1327, 1332.) Here we must determine whether
section 271 permits sanctions for expenses not yet incurred but reasonably anticipated.
We begin by looking at the language of the statute itself. We give its words "a plain and
commonsense meaning" absent a special meaning provided by the statute itself.
(Flannery v. Prentice (2001) 26 Cal. 4th 572, 577-578.) If the statutory text "is
unambiguous and provides a clear answer, we need go no further." (Microsoft Corp. v.
Franchise Tax Bd. (2006) 39 Cal. 4th 750, 758.) It is only when the language supports
more than one reasonable construction that we may look to extrinsic aids like legislative
history and ostensible objectives. (People v. Cole (2006) 38 Cal. 4th 964, 975.)
Section 271, subdivision (a) states: "Notwithstanding any other provision of this
code, the court may base an award of attorney's fees and costs on the extent to which the
conduct of each party or attorney furthers or frustrates the policy of the law to promote
settlement of litigation and, where possible, to reduce the cost of litigation by
encouraging cooperation between the parties and attorneys. An award of attorney's fees
and costs pursuant to this section is in the nature of a sanction. In making an award
pursuant to this section, the court shall take into consideration all evidence concerning the
parties' incomes, assets, and liabilities. The court shall not impose a sanction pursuant to
this section that imposes an unreasonable financial burden on the party against whom the
sanction is imposed. In order to obtain an award under this section, the party requesting
9
an award of attorney's fees and costs is not required to demonstrate any financial need for
the award." (§ 271, subd. (a).)
Citing Black's Law Dictionary, Wife urges us to conclude section 271 precludes
an award of future attorney fees and costs because those are charges "for services
performed" and "expenses incurred," definitions which use past tense. Wife argues only
past-incurred charges can be awarded under section 271. Husband notes section 271
lacks any reference to the timing of the sanctioned attorney fees and costs.
There is nothing in the statute that requires the attorney fees and costs to have
been incurred or charged at the time of the award. Section 271 does not use past tense; it
does not reference the timing of the attorney fees and costs at all. The explicitly stated
purpose of section 271 is " 'to promote settlement and to encourage cooperation which
will reduce the cost of litigation.' [Citation.]" (In re Marriage of Petropoulos (2001)
91 Cal. App. 4th 161, 177 (Petropoulos); § 271.) " 'Thus, a party who individually, or by
counsel, engages in conduct frustrating or obstructing the public policy is thereby
exposed to liability for the adverse party's costs and attorney fees such conduct
generates.' [Citation.]" (In re Marriage of Tharp (2010) 188 Cal. App. 4th 1295, 1319.)
This includes anticipated expenses that result from the offending individual's behavior.
Reading into the statute a requirement that the attorney fees and costs must have
already been incurred at the time of the award would limit a court's ability to base the
award on the extent to which the party is frustrating the policy and may ignore liability
the offending party's conduct creates.
10
Here, for example, Wife had already been found guilty of contempt and sanctioned
for failure to comply with the court's order directing her to aid in the transfer of title to
the Quatrini property to Husband's name in August 2017, almost two years after
judgment was entered and a year after Husband's request for its enforcement. Despite
this sanction, Wife permitted the property to be transferred to her Brazilian attorney to
satisfy her debt while simultaneously continuing to delay compliance with the superior
court's orders to cooperate with Husband. The court's inclusion of anticipated attorney
fees and costs generated from Wife's noncompliance would deter her from creating
additional delays leading to new charges. This deterrence supports section 271's stated
goal of encouraging cooperation. (§ 271.)
Wife mentions in her reply brief that the anticipated attorney fees and costs are
speculative.4 Wife does not argue Husband will not incur additional fees and costs or
explain why his testimony on this matter was only speculative. We will not question the
superior court's judgment on this point. (Feldman, supra, 153 Cal.App.4th at p. 1478;
see People v. Snow (2003) 30 Cal. 4th 43, 66 [under the substantial evidence
standard, credibility determinations are the sole province of the fact finder]; In re
Marriage of Boswell (2014) 225 Cal. App. 4th 1172, 1175 ["We do not judge credibility
on appeal."].)
4 The settled statement indicates Wife's attorney objected to Husband's testimony
about the anticipated fees and expenses based on hearsay. The trial court required
Husband to testify only to his knowledge. Wife does not argue on appeal the evidence
was improperly admitted.
11
Wife argues that section 271 anticipates assessing the sanction at the end of the
law suit, and Husband's decision to bring a motion for sanctions before the suit's
conclusion precludes him from recovering all related fees and costs. She deems this a
"problem of his own design." However, section 271 does not limit sanctions to the end of
the case. Courts initially concluded that the statute contemplated assessing a sanction at
the conclusion of the matter, after the severity and extent of the party's bad behavior
could be evaluated (In re Marriage of Quay (1993) 18 Cal. App. 4th 961, 970 [discussing
predecessor statute to section 271, former Civil Code, § 4370.6]), but subsequent case
law concluded the statute does not require a party to wait. (Feldman, supra, 153
Cal.App.4th at pp. 1494-1495.)
Nor is there any reason that moving for sanctions earlier should disadvantage the
moving party. Seeking section 271 sanctions during litigation is consistent with
promoting settlement and reducing the cost of litigation by encouraging cooperation.
(§ 271; Petropoulos, supra, 91 Cal.App.4th at p. 177.)
Finally, we disagree with Wife's assessment that we previously implied that
anticipated attorney fees and costs could not be awarded under section 271 in the Corona
case. In Corona, the husband argued the sanctions award was improper because the wife
did not provide evidentiary support for the amount of attorney fees and costs she had
incurred. (Corona, supra, 172 Cal.App.4th at p. 1226.) Corona is distinguishable
because the wife only sought amounts that did not exceed the total amount of attorney
fees incurred at the time of the order; whether future costs could similarly be awarded
was not at issue. (See ibid.)
12
Here, provided there is adequate evidence that the awarded fees or costs will be
incurred because of necessary actions Husband must take to remedy Wife's misconduct,
these expenses can be included in the court's award.
C.
Tethering Sanction to Attorney Fees and Costs
Wife contends the $200,000 cash sanction under section 271 must be tethered to
Husband's attorney fees and costs, and there is not substantial evidence that all of the
award is tethered to attorney fees and costs. We agree, and for this reason we remand the
matter for further consideration.
"The plain language of section 271 authorizes the court to impose 'attorney's fees
and costs' as a sanction for conduct frustrating settlement or increasing the cost of the
litigation." (Sagonowsky, supra, 6 Cal.App.5th at p. 1153.) "Here, the words 'attorney
fees and costs' are not ambiguous. . . . Section 271 'means what it says'—sanctions
available under the statute are limited to 'attorney fees and costs.' " (Ibid.) We review
the court's findings for substantial evidence, (Corona, supra, 172 Cal.App.4th at
p. 1226), and we consider all the evidence and view it favorably to support the court's
order (Feldman, supra, 153 Cal.App.4th at p. 1478).
Wife argues in her appeal that the trial court "accepted" $334,427.10 in evidence
from Husband, including stock, retirement accounts, vacation time, and anticipated future
costs and fees. Husband identifies $189,427, including travel expenses, taken from the
record. He argues the remaining $10,578 could have been incurred by Husband on the
13
final day of hearing, or it could have been included in the award to account for interest, as
permitted. (See Sagonowsky, supra, 6 Cal.App.5th at pp. 1156-1157.)
The court did not detail the basis for its $200,000 award in its April order, and, as
Wife points out, there were varying figures and fees in the record. Husband sought
$630,000 in sanctions, with $130,000 as the return of half his retirement account. He
detailed approximately $80,000–$90,000 in California attorney fees and $16,000–
$17,000 in Brazil attorney fees, which included $7,000 in fees paid to the Brazil attorney
to file the process to stop the transfer of the property to Wife's Brazilian attorney. He also
testified he had already paid his Brazil attorney $24,127.10. He provided testimony that
he would need to pay an additional 10 percent of the value of the Quatrini home to the
Brazil attorney; a $10,000 fee to transfer the property from Wife's name to Husband's
name; delinquent property taxes amounting to a minimum of $9,000, and translation fees
of approximately $5,300, which may have been included in the amount he already paid
his Brazil attorney. He said he spent about $18,000 on international flights to attend
hearings in California; and he used $9,000 worth of vacation time. His attorney also told
the court he would be required to pay 20 percent of the value of the property in legal fees
to his Brazilian attorney, $24,127.10.5
Husband's calculation justifying the sanction amount includes $18,000 in travel
expenses, a charge not tethered to attorney fees and costs as required by section 271.
5 It is not entirely clear from the record why there would be a charge of 10 percent
of the value of the Quatrini home for attorney fees, then a subsequent charge of 20
percent for attorney fees, or if the 20 percent included the initial 10 percent.
14
(See Sagonowsky, supra, 6 Cal.App.5th at p. 1153.) While we are sympathetic that
Wife's misconduct necessitated Husband's travel from his international location to court
in the United States, these trips are not attorney fees or costs within the meaning of the
statute. Similarly, vacation time, used for relief from work obligations, cannot be
awarded under section 271 because it is not tethered to attorney fees and costs.6 (See
Sagonowsky, at p. 1153.)
We also do not agree that the court "accepted" the expenses detailed in Wife's
briefing or awarded all the items Wife listed. For example, although Wife contends the
court awarded Husband a stock account valued at $30,000 and a retirement fund of
$130,000 in its sanctions award, this is not supported by the record. Husband requested
the return of half of his retirement account of $130,000 in addition to $500,000 in
sanctions, but the court order does not mention the retirement account. Moreover, while
the court referenced the stock account, it did so only in the context of determining how
Wife should satisfy the sanction award, as is statutorily permitted. (See § 271, subd. (c)
[award of attorney's fees and costs as a sanction may be against the sanctioned party's
share of community property].) Although the court previously ordered Wife to pay fees
connected with the transfer of the Quatrini property to Husband, taken from the
community property interest in the stock, it is not clear what the amount was or whether
that ever occurred.
6 Husband did not include the $9,000 lost vacation time in his estimates on appeal to
reach $189,427.
15
What is clear is that Husband incurred significant fees and costs as a result of
Wife's failure to comply with the court's order instructing her to aid Husband in the
transfer of title to the Quatrini property. The court did not abuse its discretion by
determining the award was warranted. However, the court's order sanctioning Wife
$200,000 lacks detail that allows us to track the award to the evidence in the record.
Because there is not sufficient evidence demonstrating $200,000 tethered to charged or
anticipated attorney fees and costs, we must remand the matter for further consideration.
DISPOSITION
The order of April 2018 is reversed to the extent it imposes a $200,000 sanction
untethered to Husband's attorney fees and costs. On remand, the court should include in
its order information regarding the basis for the sanction to allow for meaningful review.
The parties are to bear their own appeal costs.
HUFFMAN, Acting P. J.
WE CONCUR:
HALLER, J.
AARON, J.
16
Filed 1/15/20
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
NATACHE GONCALVES MENEZES, D074434
Plaintiff and Appellant,
v. (Super. Ct. No. DS51030)
TIM MCDANIEL, ORDER CERTIFYING OPINION
FOR PUBLICATION
Defendant and Respondent.
THE COURT:
The opinion in this case filed December 18, 2019, was not certified for
publication. It appearing the opinion meets the standards for publication specified in
California Rules of Court, rule 8.1105(c), the request pursuant to rule 8.1120(a) for
publication is GRANTED.
IT IS HEREBY CERTIFIED that the opinion meets the standards for publication
specified in California Rules of Court, rule 8.1105(c); and
ORDERED that the words "Not to Be Published in the Official Reports" appearing
on page 1 of said opinion be deleted and the opinion herein be published in the Official
Reports.
HUFFMAN, Acting P. J.
Copies to: All parties
2