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Recent Blog Posts in May 2011 |
| May 30, 2011 |
| Court Upholds SPOUSAL SUPPORT WAIVER In PRENUPTIAL AGREEMENT |
| Posted By Thurman Arnold, CFLS |
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Marriage of Howell (May 24, 2011) 195 Cal.App.4th 1062
The Fourth District out of San Diego County recently published an opinion upholding a spousal support waiver contained in a premarital agreement that was executed before 2002, when California adopted the Uniform Premarital Agreement Act (UPAA) and amended
Family Code section 1612.
Section 1612 invalidates any provision in a premarital agreement regarding spousal support, including, but not limited to, a waiver of such support if (i) the party against whom enforcement of the spousal support provision is sought was not represented by independent counsel at the time the agreement containing the provision was signed or (ii) that provision is unconscionable at the time of enforcement.
Michael and Pamela Howell began dating in 1997 and married in mid-May, 1998. They separated in March, 2008. Prior to marriage they executed a prenuptial agreement that included, among other things, a provision that they each waived any right to seek spousal support from the other in the event of divorce. At trial there was a dispute concerning the circumstances surrounding the timing and execution of the agreement, with Michael claiming he contacted his lawyer to draft the prenup a year before the wedding, and that he gave her a copy to review in December, 1998. He testified that he told Pamela to take her time in reading it, and to consult a lawyer. He said that Pamela reported she'd discussed it with family members and friends and that she concluded there was no need to have it independently reviewed because Michael had "nothing" to protect. It was signed on January 30, 1999.
Pamela's story was that Michael waited until the wedding day was fixed and paid for by Pamela and her family before raising the issue of a prenup. She said they argued about it, and Michael threatened to call of the wedding and so cause her great embarrassment and expense if she refused to sign. She claimed she had the agreement for only about three days before she signed and didn't understand what rights she was waiving. Nor did she have the money to hire a lawyer and advise her, since she'd spent it all on the wedding and Michael never offered to pay for to consult with an attorney.
The agreement recited that Michael had been previously married twice and had a daughter; Pamela was never married and had no children. Michael worked for the U.S. Postal Service earning $38,000/year and Pamela worked at a mortgage company and made $24,000 annually. Paragraph 5 stated that the agreement had been drafted by Michael's attorney, who represented Michael only, and it urged Pamela to seek independent counsel but that she has declined to do so with full knowledge of the interests she was waiving. In another portion the language stated both parties were of sound mind and not acting under duress. Both parties fully disclosed their assets, liabilities, and income.
The spousal waiver stated: "The parties mutually waive any right to receive future spousal support, maintenance or alimony from the other in the event of a Dissolution of Marriage or Legal Separation."
The trial court found that the waiver did not comply with the 2002 amendments to Family Code section 1612, even though it was executed four years before their enactment, and that Pamela had lacked independent counsel. Nonetheless, however, the court went on to make a number of findings for the record including:
- that Pamela entered the agreement voluntarily
- Pamela was capable of understanding the admonition to obtain her own attorney
- she had sufficient time to do so
- at a minimum she could have inquired into the cost of retaining counsel but didn't
- the premarital agreement was twelve pages long, not particularly complex, involved a small estate, made full disclosure, and basically sought to maintain the parties' separate property interests
- she was fluent in English
- she was employed in the field of bookkeeping, which involves the keeping of finances
- under either parties' version, she had at least 14 days prior to the wedding to consider the agreement
- there was no evidence of duress - it was presented to her at least four months prior to the wedding; indeed, she'd provided her own financial information some five months earlier
- given that Michael had been twice divorced, it was reasonable that he would have raised the request for a prenup much earlier than admitted by Pamela, which was way before the parties began to plan for a wedding
- she had mental capacity and there was no evidence of trick or deception
- there was no evidence the agreement was unconscionable when signed
Nonetheless, because the Court believed that FC section 1612 had to be applied retroactively it declined to enforce the waiver and ordered Michael to pay spousal support of $1,015 per month as temporary support, and then $1,659/month until further of court. It ordered Michael to contribute $10,000 to Pamela's attorney fees per Family Code section 2030. Michael appealed the support ruling but not the attorney fees' order.
Justice Benke of the the Fourth District reversed the trial court's determination that FC § 1612 could be applied retroactively. The Court decided that the California legislature must have intended otherwise because (a) there was no express retroactivity provision contained in the statute itself, (b) there was nothing in the legislative history to suggest the legislature so intended; and (c) the addition of the requirement of independent counsel added in 2002 constituted a material change in prior law and to apply it retroactively would upset the expectations of parties to a contract based upon the state of the prior law by imposing a new duty (to obtain counsel) that hadn't existed earlier.
Ironically, it wasn't until 2000 that the California Supreme Court first declared that a waiver of spousal support did not per se violate public policy (IRMO Pendleton and Fireman, 24 Cal.4th 39). Up to that point it was an open question in California whether premarital agreements could ever be enforced as to support waivers.
The Howell trial court had been careful to lay the groundwork in its factual findings to support a knowing and intelligent waiver by Pamela, but for the reach of the 2002 amendments to FC section 1612. Without retro application, there was sufficient evidence in the record to enforce the waiver. Pamela's lack of independent counsel in a pre-2002 prenup was just one of several factors that a court needs to consider in answering whether a support waiver is enforceable in a pre-UPAA agreement.
The appellate court ruled:
"In light of the trial court's findings, which are supported by ample evidence in the record, and based on the law as it existed at the time the parties executed their premarital agreement, we conclude on this record that Pamela, despite not having independent counsel at the time she executed that agreement, knowingly and voluntarily waived her right to spousal support in that agreement."
This prenup was executed in January, 1999, at a time when most family law attorneys anticipated that premarital waivers of spousal support would one day be upheld as enforceable, but had no idea when and under what conditions. Prenuptial agreements used to be viewed with great suspicion by the Courts under the assumption that they were 'promotive of divorce.' The law has radically shifted since then, as has the legislative and public sentiment. Many people - and evidently Michael in this case - who have prior marriages and children won't get married without one. In that sense they may actually serve to promote marriage.
I find one of the most interesting facts of this case to be the evident simplicity of this particularly premarital agreement. Rarely have I seen a prenup agreement that is only twelve pages long. We lawyers tend to make them quite complicated, partly out of fear of committing malpractice in this area of the law; we may want to reconsider this strategy. The Howell decision, which would have had a different outcome if the agreement had been executed after the enactment of the 2002 amendments to FC § 1612, expresses a major new judicial attitude that support waivers in premarital agreements are to be enforced when they are not unconscionable at the time they are signed, or under current 1612 at the time a party seeks to enforce them. It may serve people to reduce them to their bare essence rather than elongating them. An agreement that is 50 pages long may seem incomprehensible to most nonlawyers.
By the way, prenups that don't mention spousal support will be much more easily enforced. While it is possible for a court to strike only the spousal support language in agreements that contain them, it is also possible the entire agreement could be stricken if the waiver is rejected depending upon how interrelated various provisions are.
For those contemplating drafting or signing a prenup it remains very difficult to predict whether they will be enforced under the circumstances of a contemporary divorce or legal separation. Section 1612(c) reads:
"(c) Any provision in a premarital agreement regarding spousal support, including, but not limited to, a waiver of it, is not enforceable if the party against whom enforcement of the spousal support provision is sought was not represented by independent counsel at the time the agreement containing the provision was signed, or if the provision regarding spousal support is unconscionable at the time of enforcement. An otherwise unenforceable provision in a premarital agreement regarding spousal support may not become enforceable solely because the party against whom enforcement is sought was represented by independent counsel." [Emphasis added].
We await further appellate rulings to determine what the bounds of "unconscionab[ility] at the time of enforcement" are. This is where drafting these agreements is especially tricky, and requires great skill. Don't believe that support waivers will always be enforced, particularly where they are blanket waivers (as opposed to limiting spousal support rights by duration, amount, or future circumstances at time of enforcement).
In the meantime, as to this decision, it appears that Pamela's side threw all the standard objections at the trial court that one would expect where there is a challenge to a prenup (wedding already planned, embarrassment and cost, duress, lack of understanding, no independent review and Michael didn't offer to pay for her to get one), and they didn't stick. She has to repay all the alimony she received, plus Michael's costs on appeal.
T.W. Arnold, C.F.L.S. |
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| May 29, 2011 |
| Announcing the Launch of LAFMS - DIVORCE and FAMILY LAW MEDIATION in Los Angeles and Beverly Hills! |
| Posted By Thurman Arnold, Mediator |
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I Am Pleased to Announce the Launch of
LOS ANGELES FAMILY MEDIATION SERVICES
Mediators and Co-Mediators Serving the Greater Los Angeles Area
Some of you may know that within the Coachella Valley, I am a founding member of Desert Family Mediation Services (DFMS).
On May 26, 2011, the DFMS Team launched Los Angeles Family Mediation Services, a full-service mediation practice consisting of legal expert family law mediators and mental health professional co-mediators. LAFMS is located in Beverly Hills, but has offices in Los Angeles as well.
The principal team members working out of Los Angeles are:
- Retired Family Court Judge Gretchen W. Taylor
- Renowned Psychologist Dr. Jane Ellen Shatz
I am available to serve mediation parties in the Los Angeles area as well, for selected cases.
We are proud and pleased to come together as a team of highly trained and motivated professionals, with over 100 years of combined family law and therapeutic experience, in an effort to provide a positive alternative to traditional divorce warfare.
We believe we can be part of your solution!
Thurman W. Arnold, III, C.F.L.S./Divorce Mediator
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| May 23, 2011 |
| FORM OF TITLE Trumps COMMUNITY PROPERTY PRESUMPTION Where Life Insurance Is An Asset in DIVORCE |
| Posted By Thurman Arnold, CFLS |
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Marriage of Valli, B222435
PLEASE NOTE - The California Supreme Court granted review of this decision on 8/24/11 and as a result the opinion reviewed below has been vacated.
8/26/11
TWA
The California Second Appellate District issued its ruling in Marriage of Valli on May 18, 2011, reversing a Los Angeles trial court that had found that a $3.75 million insurance policy purchased during marriage was the parties' community property. Instead Justice Stanley Mosk declared that the 'super-presumption' contained in Evidence Code section 662 trumps the more general presumption per
Family Code section 760 that property acquired during marriage is jointly owned. Interestingly, this was true even in the absence of direct evidence of the title to the policy itself; it was sufficient that the insurance agent who sold the policy testified the policy was issued in the name of the Wife and that he'd been told it was being purchased for the protection of the family.
At issue was who owned a 'blended universal life insurance contract' on Husband's life (this is THE singer Frankie Valli) bought some eighteen months before separation that had a cash surrender value of $365,032 by time of trial. Husband argued that since the policy was acquired during marriage and paid for with community funds, it belonged to the community and each party was therefore entitled to one-half. Wife contended that Husband had told her from the inception of the policy that she was to be the owner of the policy and its sole beneficiary, and this was not disputed. She introduced testimonial evidence that the policy listed her as its owner. The trial court sided with the Husband. The decision turns on legal and not factual issues, and I think it deserves mentioning that this appears to be a case that was ethically litigated - Mr. Valli was wholesomely honest and resisted the temptation to assert a version of what happened that included allegations of "pillowtalk" or other reassurances, for instance, from Wife that she had admitted the policy was joint because these did not occur (nor would they have been helpful) - something that is otherwise common in the "liar's contests" that many dissolutions devolve into.
Family Code section 2550 assigns trial courts a mandatory duty to value and divide equally the parties' community property estate. But what is community property? Generally, factors determinative of whether property is separate or community are the time of acquisition; operation of various presumptions, particularly those concerning the form of title; and whether the spouses have transmuted or converted the property from separate to community or vice versa ...." (In re Marriage of Haines (1995) 33 Cal.App.4th 277, 291).
Family Code section 760 states "[e]xcept as otherwise provided by statute, all property, real or personal, wherever situated, acquired by a married person during the marriage while domiciled in this state is community property." This is the "time of acquisition" rule, and it creates a rebuttable presumption in favor of the creation of CP. That presumption can be overcome by a "preponderance of the evidence" - that is by evidence that shows by a 51% likelihood that it is separate property. FC section 760 is the starting point for any analysis of assets and debts acquired during marriage for purposes of defining the marital balance sheet.
Evidence Code section 662 is an evidentiary presumption, found outside the California Family Code. It states "[t]he owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof." The "clear and convincing" standard of proof is considered to be a "super-presumption" exactly because of what it takes to overcome it. The public policy basis for this evidentiary presumption is to ensure the stability of titles to property and within the insurance context it is important that insurance companies have the ability to rely on their information of who holds title to a policy in paying out death benefits, and in not exposing themselves to multiple claims (and paying the wrong person or heir) upon death.
Hence, under some circumstances, when the general CP presumption and the form of title presumptions collide the form of title presumption trumps the more general presumption.
Here the evidence at trial was largely undisputed. A year before the parties separated crooner Valli was experiencing medical problems and told Wife that he wanted to buy a policy on his own life to make sure he took care of his family in the event he might die. He wanted to ensure the kids could go to college and that "there would be enough money for everybody." At that time the parties had no plans to split up.
Accordingly, he bought the policy from his insurance agent. Husband's business manager told Wife that they intended to make her the owner, and Husband himself testified that he "put everything in [Wife's] name, figuring she would take care and give to the kids what they might having coming." His insurance agent testified at trial the policy was issued in Wife's name. Of interest, however, the policy itself was never introduced into evidence.
Hence, on appeal Wife urged that "the act of taking title to property in the name of one spouse during marriage with the consent of the other spouse effectively removes that property from the general community property presumption. In that situation, the property is presumably the separate property of the spouse in whose name title is taken." Since Husband had failed to introduce "clear and convincing" proof that overcame the title presumption, the equity in the policy belonged to her. Nothing required that proof of the form of title be through documentary evidence where there was sufficient indirect testimony that the policy was titled in Wife's name.
The Second Appellate District Court agreed. "Frankie did not present evidence of an agreement or understanding with Randy [the Wife] that when the policy was placed solely in Randys name as owner, they intended title to the policy to be other than Randy's separate property. (In re Marriage of Brooks, supra, 169 Cal.App.4th at p. 189.) Likewise, Frankie did not present evidence that he was unaware that title to the policy was taken solely in Randys name. That Frankie knew the policy was taken solely in Randy's name is supported by substantial evidence. Frankie testified that he
put everything in Randy's name, and Randy testified that Frankie and Siegel told her that
they were going to make [her] the owner' of the policy."
Husband also unsuccessfully argued that Family Code section 721 creates an additional presumption of undue influence where one party by taking title in their name solely gains an advantage over the other, and that given that presumption the EC section 662 super-presumption could not come into play. However, 721 applies in interspousal transactions and this was not a transaction between the two married persons but between one of them and the insurance agent. "Randy could not have owed a fiduciary duty to Frankie in a transaction in which she did not participate." Moreover, even if the presumption of undue influence did arise there was sufficient proof rebutting Husband's clear intention to make Wife the owner; Wife had no role in the transaction whatever.
Moreover, the justices noted that there was no evidence that the cash surrender value of the life insurance policy was intended to be a "savings device." Instead, Husband's intent at the policy inception was clear that it was for the benefit of the Wife.
Finally, they dismissed Husband's argument that there had not been a valid transmutation of the policy from community to Wife's separate property. "A 'transmutation' is an interspousal transaction or agreement that works to change the character of property the parties already own. By contrast, the initial acquisition of property from a third person does not constitute a transmutation and thus is not subject to the [Family Code section 852, subdivision (a)] transmutation requirements." Keep in mind that Husband had purchased the policy only 18 months before the parties separated. They had had a 20 year marriage. In order to amass $365,032 in policy equity over such a short period, the community had to have made quite substantial premium payments to fund it. Mr. Valli was 69 when he acquired the coverage, and the cost of the policy had to be exorbitant.
Normally one might reasonably think that the claim that the cash surrender value was now Wife's separate property would require proof of a transmutation from the community to separate property - this is what the trial court assumed to be the case when it found in favor of the Husband. However, Wife's counsel never claimed a transmutation, a wise strategic move.
While this outcome might, at least for Husband, seem unfair it illustrates that in the realm of community verses separate property, when form of title presumptions come into play, as a matter of public policy favoring the stability of financial transactions with third parties (and not just between the spouses alone), the manner in which title is taken controls unless rebutted by extremely compelling evidence. This is not intuitively or even rationally obvious. In California matrimonial law certain fictions may dictate the outcome. This decision is important for any lawyer or self-represented party where one asset acquired during marriage is a life insurance policy. Common sense, and even the expectations of people who are married until the day of separation comes, would seem to militate in favor of a different result.
In remanding the case to the trial court (i.e., sending it back with instructions to enter a new decision consistent with the appellate court's reasoning), the Valli opinion does "leave to the trial court any reallocation of assets or award of reimbursement in light of our holding." Presumably that reimbursement applies to premiums paid by Husband after the date of separation that increased the cash value of the life insurance policy, but does not form a basis for reimbursing what was paid before. Since the policy was acquired in 2003 but trial occurred five years later, this reimbursement is not insubstantial. Of course, Frankie is too old now to be able to acquire a new $3.75 million dollar policy and Wife will receive this money upon his passing if the policy remains in force.
Wife was represented by the divorce powerhouse Los Angeles law firm of Jaffe and Clemens and Husband's appellate team included the highly notable legal scholar Garrett C. Dailey.
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| May 15, 2011 |
| RECURRING GIFTS From Parents May Be "INCOME" For Purposes of Determining Need for ATTORNEY FEES! |
| Posted By Thurman Arnold, CFLS |
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As I have been trumpeting now for months, the appellate courts are actively attempting to control and limit family law litigants, their lawyers, trial courts, and the rest of the professionals involved in these cases and to curb the excesses of high conflict divorce and custody disputes. Following on the heals of the momentous decision in Irmo Davenport,
another court has responded to an excessive attorney fee claim by a family court disputant. In
Davenport it is a party who was sanctioned for the aggressive tactics of her attorney; now in the
Kevin Q. opinion, it is the lawyer herself who is undone because it appears she will never be paid for hundreds of thousands of dollars in fees run up in the course of her representation.
I raised the question in my
Davenport blog whether we can expect
Family Code section 271 to be amended to impose sanctions against attorneys themselves for litigious conduct (there is a split of appellate authority on whether 271 includes attorneys). While neither the attorney nor the client in
Kevin Q. was sanctioned (and apparently the conduct of the litigation did not rise to sanctionable levels), they were nonetheless denied any contribution to their fees from the other side. An attorney who handles cases "on the come" who finds herself not getting paid is pretty much equivalent a form of sanction.
Kevin Q. blew up in the face of the mother's attorney (although I applaud family lawyers who care enough to carry a case for a time, in appropriate settings). For those attorneys who tend to over-litigate cases, basic behaviorist principles of reward and punishment are likely to impact their decision-making. This is a message that I believe the appellate justices intend.
The Fourth Appellate District has taken the next predictable step for litigants who hope to force the other side to contribute to exorbitant attorney fees incurred in certain high conflict family law cases. In so doing the law as it relates to the "relative circumstances" of the parties has been expanded to require that trial courts treat recurrent monetary infusions made by family members as "income" for purposes of interpreting the larger picture as it relates to attorney fee requests. Previously that argument only existed within the realm of support obligations.
This is the first case that deals with what happens to attorney fees claims, in a situation family lawyers know is common where grandparents may be effectively encouraging (and often funding) a rancorous custody battle between their child and a now estranged former partner. Often in family court litigation there are not merely two individuals at war - their relatives have also been sucked into the trance. Many wealthier Americans are able to fund their child's litigation attorneys, or pay that child's household bills so that their need to find work is reduced. The parents of these children may feel forced to underwrite this status quo, effectively spending the family inheritance now. This may be the real subtext to the case.
Kevin Q. is a natural evolution of a doctrine which was recently stated in
Marriage of Alter (2009) 171 Cal.App.4th 718. In
Alter the trial court found gifts from the former husband's mother to be disguised as loans and imputed income to him for these gifts in deciding his ability to pay child and spousal support.
In Kevin Q. and Lauren W., published on May 13, 2011, the two parties incurred over $400,000 in lawyer's fees combined fighting over the paternity of a boy born outside of marriage. That these are warring high-conflict parents is made clear from the fact that this is their second published appeal (see
Kevin Q. v. Lauren W. (2009) 175 Cal.App.4th 1119). Mother won the first appeal; Kevin prevailed here. Both sets of litigants have had the same attorneys throughout the proceedings. Kevin Q. is himself an attorney who practices family law in Orange County. As it turned out in the earlier case, Kevin is not the child's biological father but he alleged he was the child's psychological parent - the appellate ruling was that Kevin was not the boy's "legal" father. Unfortunately for the child, it sounds as though the man declared to be the legal father went "walkabout." I cannot tell whether Kevin continued to maintain any relationship with the child after he lost his paternity claim ('once a psychological parent, always a psychological parent?'). Perhaps the parties or their attorneys will weigh in this Blog so I can have the facts corrected.
The first decision is dated June 19, 2009. In December, 2009, Lauren moved the court to order that Kevin pay her outstanding attorney fees, including those from the earlier appeal. Kevin had contributed a total of $20,000 up to that point. Her attorney was Debra Opri of Opri & Associates; Kevin was represented by Marjorie G. Fuller and Marc S. Tovstein. Hence, all the litigation after the first decision appears to be over recovering attorney fees relating to it (but this is unclear). Fees upon fees?
In this round Attorney Opri filed a declaration stating that there was $55,754 due from the earlier work and that another $178,581 and costs of $6,589 was incurred thereafter. Hence, Lauren's total unpaid fees amounted to $227,746. Opri's hourly billing rate was $575 and her law clerk's was $225/hour. Of these fees, Attorney Opri had only received the $20,000 from Kevin plus $28,280, which included a payment of $15,600 from Lauren's father. Lauren urged that Opri had been effectively working for free. She owes her father "tens of thousands" and he was tapped out.
Kevin responded that Lauren's fees were unreasonable. She'd incurred $311,242 in fees for the entire case while his fees totaled $141,384. He complained that $4,200 in charges were for driving time for her attorney to travel from Beverly Hills to Orange County.
The matter was submitted for decision to the trial court, with the issue being identified as whether "attorney fees should be paid to [Lauren], based on need and ability to pay, as set forth in ... [Family Code] sections 2030, 2032, 7605, and 7640." Lauren urged that because the underlying dispute concerned paternity, Family Code section 7605 and
section 7640 governed and that these statutes required a different analysis than under
sections 2030 and
2032.
The court made the following findings: Kevin's average monthly income was $12,803. He had borrowed $50,000 from his relatives for attorney fees, which he was paying back at the rate of $150/month. He had monthly expenses of $13,320 leaving a deficit of $517.
Lauren had zero income from employment and had not worked since 2006, although she had a master's degree in psychology and is a certified chemical dependency counselor. She received $8,700 per month from "others." Her monthly expenses were $9,197, leaving a shortfall of $497.
Which Statutes Control Attorney Fee Requests in Paternity Actions?
The court concluded that it had to apply Family Code section 2032(b) and so "consider the practicality of the expense of litigation consistent with the parties['] overall financial resources." While it appreciated that Lauren's counsel had expended time and talent to the case without substantial payment in advance, "[o]nly the wealthiest of our citizens can afford to expend more than $500,000 on their family law disputes. The fact that an attorney voluntarily takes on the lower earner does not mean that the law gives him or her carte [blanche] to litigate the case without limitation regardless of the parties['] ability to pay."
The court noted that Family Code section 2032(d) provides a mechanism that offers the parties and their counsel to early on seek to implement a case management plan for the purpose of allocating fees in an amount and to the extent that circumstances allow - Lauren did not avail herself of that opportunity "and forged ahead, incurring attorney's fees far in excess of either party's reasonable ability to pay." (Notably the appellate court did not weigh in on this question). It concluded that "neither party ha[d] a substantially greater ability to pay the other's fees" and therefore denied Lauren's request that Kevin contribute to hers.
On appeal Lauren contended that the trial court failed to limit its inquiry to the language of Family Code sections 7605 and 7640, which she felt would result in a different analysis than that under 2030 and 2032. The chief difference between the wording of the two sets of statutes is that "[u]nder section 2032, '[t]he court may make an award of attorney's fees and costs under Section 2030 . . . where the making of the award, and the amount of the award, are just and reasonable under the relative circumstances of the respective parties.' Section 2032 further provides: 'In determining what is just and reasonable under the relative circumstances, the court shall take into consideration the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the party's case adequately, taking into consideration, to the extent relevant, the circumstances of the respective parties described in Section 4320. 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.'"
Family code section 4320 is the key California spousal support statute. Of course, this was a paternity action and since the parties were never married no spousal support could have been awarded. Nonetheless, the Fourth Appellate District concluded that the legislature's reference to 4320 in section 2032 meant that the factors set forth in 4320 were relevant here. These included "the earning capacity of each party," "the obligations and assets of the parties," the "age and health of the parties," "the balance of hardships to the parties," and the "goal that the supported party shall be self-supporting within a reasonable period of time." Thus the appellate court concluded that "sections 2030, 2032 and (where relevant) 4320 form a statutory package" where fee awards must comply with all three provisions - at least in marital proceedings.
The Fourth District decided that the trial court did not error by taking into account the standards and circumstances pertinent under a section 2032 comparative analysis. "By dong so, the court was able to perform a more thorough evaluation of the parties' respective abilities to pay."
Loans vs. Gifts From Family Members
Lauren urged on appeal that the trial court erred by treating her father's payments to her as income, asserting these were loans and not gifts and that her father's financial support was not "an infinite obligation, regular or steady...." She argued that the trial court did not find the amount of her fees to be unreasonable.
The appellate court read the trial court decision as including a finding that Lauren's fees were in fact unreasonable. The court had stated that the law does not give either party carte blanche "to litigate the case without limitation." It noted the disparity in the amounts of fees charged by the two sets of attorneys. And the court had observed that Lauren's counsel had "forged ahead, incurring attorney's fees far in excess of either party's reasonable ability to pay."
The two seminal cases on imputing income derived from gifts from parties' parents are the Alter case, cited above, and
In re Marriage of Schulze (1997) 60 Cal.App.4th 519. In
Schulze a noncustodial father challenged an order requiring him to pay spousal and child support. The trial court there ordered him to pay $7,500 immediately and in full for his former wife's attorney fees. The trial court had presumed he could get this money from his parents because they had previously lent him about $8,000 to pay his own fees. This part of the ruling was reversed with the now oft quoted holding that "Charity, once extended, is still not an entitlement." As the
Kevin Q. opinion notes "[b]ut that statement related to a loan made by the parents for a particular purpose, as opposed to regular, recurrent monetary gifts intended as support for living expenses." Lauren responded that the trial court ignored the $50,000 loaned by Kevin's parents, but these were not the same as "recurrent payments" made over a lengthy period of time to cover Kevin's living expenses. And, Kevin's attorneys were smart enough to produce evidence that Kevin was paying back those loans.
Alter similarly examined recurrent gifts to an adult child. "There, the appellate court stated that 'where a party receives recurring gifts of money, the trial court has discretion to consider that money has income for purposes' [of determining] child support. The former husband in
Alter, who sought reduction of an existing child support order, had received regular monthly payments from his mother for many years. He claimed the payments were loans, produced promissory notes as evidence, and averred his mother's loans to him 'would not continue.' The appellate court found substantial evidence the payments were gifts, noting that no evidence showed the former husband 'ever repaid any of the money.' The Court of Appeal then addressed whether these gifts may be characterized as income under the relevant child support statute. It concluded 'that nothing in the law prohibits considering gifts to be income for purposes of child support so long as the gifts bear a reasonable relationship to the traditional meaning of income as a recurrent monetary benefit.' In reaching this conclusion,
Alter found it 'irrelevant that there is no legal obligation on the part of the donor to continue making the gifts or that the flow of cash does not appear on the income tax return.'
'Few, if any, sources of income are certain to
continue unchanged year in and year out. People can lose their jobs, interest rates can fall, business conditions can wipe out profits and dividends.'
In sum, 'the question of whether gifts should be considered income for purposes of the child support calculation is one that must be left to the discretion of the trial court.'
Alter
concluded the trial court had not abused its discretion in considering the payments to be income because they were 'periodic and regular,' resulting in money available to the former husband for the support of his children."
Hence, the Kevin Q. court ruled that "the regular, recurrent monetary infusions made by Lauren's father to her over a lengthy period of time, which relieved her of the need to work outside the home, constituted support (and, impliedly, monetary gifts) to her. The court explains: 'While the Court recognizes that [Lauren's] receipts from 'others' are not income as defined in the Family Code, they are however funds on which [Lauren] relies in order to maintain her lifestyle. It is clear to the Court that these funds received are not loans, in that [Lauren] reports debt only in the amount of $26,000, all from institutional lenders. [Lauren] reports that she has not been gainfully employed since August of 2006. She discloses that she has a bachelor's degree in English, a master's degree in psychology and is a certified dependency counselor. [Lauren] does not report receiving or applying for any benefits for disability income from any state or federal agency or private insurance provider.
The weight of the evidence therefore supports the proposition that [Lauren] chooses to remain a 'homemaker and mother' and is able to do so as long as other persons contribut[e] to her support. That support, in this Court's mind, is relevant to the issue of [Lauren's] need and ability to pay attorney fees.'" [Emphasis added].
The court did not abuse its discretion by considering those gifts to be support (or income) for purposes of calculating Lauren's ability to pay her attorney fees. The gifts bore "a reasonable relationship to the traditional meaning of income as a recurrent monetary benefit."
The Take Away
Parties to family court litigation who don't work, or have limited access to resources, find themselves in a catch-22: If they look to their families for financial support which they then receive as recurrent gifts, or unpayable loans, this stream of money will increasingly be classified as "recurrent income." Here Lauren's parents regularly supported her, at a pretty high standard of living at $8,700/month. One can't but help feel sorry for her parents for bearing this burden. I suspect that as naturally tends to happen her parents bought into her victimhood and sided with her against the evil empire that Kevin represented. Often high conflict litigation isn't simply a war between two parties: It is a war between two families, which isn't a lawyer's fault - but is still always a shame.
(Mirroring conflict between two religious groups; or two political parties; or two races; or two countries; or human beings vs. the rest of the natural world. Does any of this sound familiar? But I digress.)
True loans from parents may remain different from "recurrent income" depending how and how often it is received. Kevin was wise to show some repayment, however meaningless ($150/month towards a $50,000 debt is minimal at best).
We now know that Family Code section 2032 provides the central standard of measuring how attorney fees may successfully be sought from the other side in probably any manner of case that can be filed under the California Family Law Act. It gives trial courts wide discretion to look at all the relative circumstances, no matter whether the case is between married persons, domestic partners, and paternity contestants. Arguably the same result should control when dealing with attorney fee requests in domestic violence cases (Family Code section 6344).
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| May 06, 2011 |
| Marriage of Davenport: Trial Court SANCTIONS Wife Under FC Section 271 for Her ATTORNEYS' "UNBRIDLED AGGRESSION" In Family Court Proceedings! |
| Posted By Thurman W. Arnold, III, C.F.L.S. |
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A Shifting Judicial Response to Overzealous Advocacy:
Excessively Exuberant and Inflammatory Litigation Tactics
Will Not Be Tolerated in California
Justice Richman of the First Appellate District for Sonoma County, California, issued this week a momentous opinion that signals that courts will no longer passively allow attorneys who embark on rampaging attacks in high conflict divorce, or elsewhere, to do so without meaningful reprisals. Clients who encourage or permit their lawyers to manage their cases in this style may find their purses and wallets pried open.
While my review of the case may seem harsh, I believe that it reflects the frustration of the appellate court. I have endeavored to quote the decision itself as much as possible for readability. The trend in recent reported appellate decisions suggests that the pendulum is swinging against litigants who get sucked into divorce trance and its insane warfare. Marriage of Davenport excoriates not only one lawyer and his client but also the Santa Rosa law firm for which the attorney worked.
Mediators, collaborative attorneys, ethical divorce practitioners, and holistic lawyers will appreciate that a major California appellate decision has outed the adversarial elephant in the courtroom for the destructive creature that it is, affirming consequences for litigious behavior that are necessary and overdue. Courts are not merely imposing monetary punishments, they are publicly shaming those professionals (attorneys, mental health professionals, and even trial court judges) who fail to act within the bounds of due process, fiduciary duty obligations, and the rules of civility. Indeed, last month the Second Appellate District in Ventura County upheld a sanctions award against a self-represented attorney in a family law proceeding, and reported him to the California State Bar as well.
Still, Davenport raises some important questions. These include:
- What level of vitriol and sarcastic behavior is permissible in the trenches of high-conflict divorce proceedings? When does zealous advocacy so exceed the bounds of civility that the behavior of litigants or their attorneys receives as much attention as the underlying property division and support issues in the case?
- Is it possible to remain a civil advocate without sacrificing the zeal that is required and expected of lawyer warriors?
- If attorneys, or the clients in their stead, are to be held accountable for conduct that increases the adversarial tone of the proceedings might this have a chilling effect upon strong and courageous advocacy, making less empowered parties more vulnerable to exploitative litigation tactics employed by the other side?
- Should the California legislature amend Family Code section 271 to authorize trial courts to sanction family law attorneys directly for abuses they themselves commit? Good arguments exist for and against (another day, another blog).
Marriage of Davenport (2011) 194 Cal.App.4th 1507
Marriage of Davenport was published May 4, 2011. It may be the most important annunciation in years by California jurists that some litigants and lawyers are stubbornly out of control, recognizing that the survival of our current family court legal scheme requires that the judiciary manage the worst behavior of such participants.
Davenport will be cited as a textbook illustration of what to overcome and avoid.
Click here for the full opinion.
Jill and Ken Davenport married in 1948 and separated in 1990, amassing an estate worth near 57 million dollars. Ken was a talented car salesman and real estate investor. It wasn't until March 1, 2006 that Jill filed a petition for dissolution of marriage. During that 16 years "there was agreement and cooperation, including their participation in joint estate planning favorable to Jill, and agreement to sell off many of the [community properties]." Jill was then 75 years of age, and Ken was 78.
This cooperation ended on February, 3 2006 when something set Jill onto the road to calamity. She fired a first salvo in the form of a letter to Ken which accused him of having "stepped over the line," having "lied to me," warning he being taken advantage of by others (sweet irony?), and demanding money and property. Although the parties had co-existed peaceably for almost 16 years, the status quo exploded with this letter.
What had changed for Jill? That month or before she'd retained the law firm of O'Brien Watters and Davis to protect and advance her interests. When her Petition was filed, senior attorney Michael Watters was named as her attorney of record. However, in November 2005 Andrew Watters (Michael's nephew), passed the California Bar and joined the law firm effective February, 2006. He was introduced to Jill three days later and became her gladiator, so beginning an odyssey that would continue unabated for more than five years. According to Andrew, thereafter he "personally handled or [was] personally involved in each and every transaction between the parties ..., as well as each and every discovery request, discovery event, court proceeding, and other substantive matter." As the First Appellate District court dryly notes, "[i]n short, Andrew Watters became the lead lawyer for Jill in what would necessarily be a complex family law litigation." "Early on, a young and inexperienced attorney at that firm [Andrew] became Jill's primary attorney, and interacted with Ken's attorneys for the next two years, interactions that would generate a 35-page register of actions and 19 volumes of court files."
Out of the gate Andrew Watters pursued a campaign of attack against Ken and his attorneys that seemed ill-fated. Five months into the proceedings, he filed a motion to compel further answers to Form Interrogatories after making negligible efforts to resolve the discovery dispute informally. California has long required that before litigants file motions to compel discovery, the record must show that they made reasonable and sincere efforts to resolve the argument informally. Proof of this is contained in what are called "meet and confer" letters. Unfortunately, these letters are often authored with a threatening tone, reflect posturing and grandstanding, and sometimes hope to set up the other side for sanctions when a motion to compel is heard. In this case, Andrew wrote a single letter, failed to respond to Ken's attorney's reply, and he didn't attempt to discuss the issues with Ken's attorneys directly before filing his motion. The trial court declared these efforts to be "unreasonable" and "admonished [counsel for both parties] to change their meet and confer practices so that meeting and conferring is meaningful and not just a token gesture."
Over the next two years Wife's side would file eight discovery motions. The court file came to consist of 19 volumes, something that the experienced trial judge, Judge Cerena Wong, would later describe as "outrageous" for a family law case. Wife filed three OSC re Contempts against the Husband, including one in which the Court in August, 2006, ordered the parties to meet and confer in a 4-way, as to which Ken "refused to meet and confer if attorney Andrew G. Watters was present in the room." Oh boy. Unfortunately, this reaction is not uncommon but risks forming a vacuum where the business of cooperatively resolving the case stalls.
The FC §271 Sanctions' Requests
On May 23, 2008, attorney Watters filed two motions that ultimately blew up in Jill's face, led to this appeal, but now provides a roadmap for how not to behave when representing parties to matrimonial proceedings. One motion requested Family Code section 271 sanctions and attorney fees.
Wife's initial motion paperwork was "blank", evidently designed to reserve hearing dates on the court's calendar. The appellate court notes that "Andrew Waters did not consult with [Ken's attorney] on the date, nor even advise him of the filings, causing him to complain about the timing of the motions, including that they were filed late in the afternoon of May 23, 2008, the Friday before the Memorial Day weekend, and at the last possible moment."
Family Code section 271(a) reads in pertinent part:
"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 order to obtain an award under this section, the party requesting an award of attorney's fees and costs is not required to demonstrate any financial need for the award...."
Jill sought legal fees of $600,861 and costs of $332,933. Her attorney filed a 52-page declaration which attached 1250 pages of exhibits. Much of Watters' declaration was "inappropriate, asserting hearsay, argument, opinion, and conclusion, and was improper on several bases. An early passage ... illustrates some of this, where Andrew Watters purports to describe Jill's description of Ken's 'negotiating tactics, habits, and personality traits,' which he labeled 'Deal in the pocket,' 'Poor mouth,' and 'Artificial crisis,'...." This sort of sarcasm doesn't warm the hearts of judges.
Although the record is not clear, it appears that Watters requested that Ken's attorneys also be sanctioned. If so, personalizing sanctions between attorneys is always a dangerous mistake.
Watters' tone was reportedly sarcastic, deprecatory, improperly personal, and lacked objectivity (see several paragraphs below for the juicier stuff). Effectively he was "testifying" on behalf of his client. His declaration included assertions that:
- "I've seen first hand that Ken can be a very persuasive person, and that Ken seems to use all of his abilities and skill to get the best deals for himself. Unfortunately we've learned that Ken has also used this great skill and ability to take care of his wife."
- "I was skeptical ... that someone could really use these tactics effectively outside of a car dealership.... However, throughout our dealings with Ken in this matter, I have personally observed Ken use each of the aforementioned tactics."
- "During the pendency of this proceedings,...., the 'inconvenient truth' here is that Ken has used his unusually strong business skill and acumen against his spouse despite his fiduciary duties..."
Wife's attorney asserted several breaches of fiduciary duty including that Ken (1) omitted two assets worth $3.1 million on his schedule of assets and debts; (2) produced a written statement of the parties' net worth to be $30.5 million, when several months earlier he gave a financial statement to a loan officer showing the net worth to be twice that; (3) that his schedule of assets and debts failed to state values for many of the listed items; and (4) engaged in various discovery abuses, including stalling the taking of his deposition for ten months.
Watters' motion included Points and Authorities citing but one case: In re Marriage of Feldman (2007) 153 Cal.App.4th 1470.
Feldman is the most important fiduciary duty case of the last decade. It upheld $250,000 in sanctions against a Husband who clearly was frustrating the resolution of that case, and who was secreting assets from the Wife. "Feldman" has become the rallying cry behind many well-intentioned efforts by California Family Law attorneys to force the other side to comply with their fiduciary duties.
Many divorce attorneys have "Feldman letters" loaded and cocked on their computers, to fire off where the other side is 'hiding the ball.' Several years ago these were widely circulated within the family law community with a certain amount of glee. Some attorneys use these letters as an intimidation tactic.
Feldman sanctions' threats are indeed sometimes required to remind the other side they are straying from their obligations to be transparent - but misconduct must be egregious in order to succeed on a
Feldman claim.
Feldman is important authority for curbing and remedying abusive and dishonest conduct in divorce proceedings, but like all things it can be over-used, blunting its utility.
Watters urged: "'Here, the Davenport matter might as well be called
In re Marriage of Feldman - The Sequel. If ever a dissolution of marriage action in Sonoma County warranted the imposition of sanctions on a party, this is the case.... indeed, 'this case is
worse than what happened in
Feldman.'" The decision asserts
"F
eldman would become Jill's short-hand description of all that was claimed to be wrong with Ken's conduct,..."
"Feldman, Feldman, Feldman, Jill repeated below,..." The appellate justices noted that "Jill remains relentless ...."
For those who have been on the receiving end of nasty Feldman letters, this is the first reported decision that provides an antidote. However, at the same time,
Feldman is important authority to assist under-empowered spouses in family law litigation.
Ken naturally opposed Jill's Feldman motion, and gave notice that he would seek too would seek Section 271 sanctions. Jill's Reply argued Ken's motion was technically defective and filed on the wrong forms, and that Ken's requested fees "have little or no connection with the alleged 'sanctionable' conduct of Jill"
as opposed to that of Jill's attorney. It is not clear that they challenged the
amount of these fees.
The trial of these dueling Feldman claims took place over five days in October and November, 2008. Wife's attorney filed detailed evidentiary objections to the declarations and exhibits that Ken submitted, including motions to strike portions of his pleadings, and Judge Wong essentially ignored these objections making "it abundantly clear that she could separate the wheat from the chaff."
Davenport deals a blow to the common practice of using evidentiary objection briefs to attack declarations from the opposing side that contain improper matter (the function of these is to emphasize to the Court the lack of
admissible evidentiary support for statements contains in these declarations, and to strike some of the contents of these pleadings from the record). Judge Wong stated "as far as I'm concerned, fighting over comments or statements made as to whether or not they're relevant or whether or not they're objectionable, you know, this is not a jury trial for heaven's sake. I'm a judge. You know, I can sift through this stuff. I might have some comment about what I think to be more lawyerly conduct and lawyerly language . . . . You should be able to rely on the court being able to read what it reads and eliminate what's not relevant."
Well, maybe.... Judges are as human as the rest of us. Exactly what argument or "evidence" a court is relying upon in reaching its conclusions is of rightful concern to litigants and their attorneys. Short-circuiting a proper record that makes effective appellate review possible carries a danger of giving trial courts too much power and discretion.
Judge Wong issued a statement of decision that found that:
- Jill's counsel's failure to meet and confer before filing her motion, and during the proceedings, is sanctionable conduct.
- The facts Jill alleged "do not rise to the level [of Feldman]."
- No valid evidence or support was presented that justified an expedited hearing (normally Feldman motions are heard at the conclusion of a dissolution action, when the Court has the larger picture before it, but Attorney Watters had urged that an immediate hearing was required here to deter what he claimed was continuing sanctionable conduct by Ken and his attorneys.
- Jill's counsel's hostile and disrespectful correspondence is sanctionable.
- Jill's attorney repeatedly made references to what was said and presented in a mediation that the parties had undertaken, in violation of Evidence Code section 1119.
- Watters' surreptitious conduct with computer consultants in relation to extracting computer data on a computer in his possession that was believed to include privileged material was inappropriate and sanctionable (in connection with retrieving data stored on a computer that Wife controlled, Watters switched the computer experts, replacing the agreed upon forensic with an IT person whom he'd met at a karaoke Bar where he claimed such "nerds" are known to hang out).
- All fees relating to Wife's motions could have been avoided by Wife's counsel. Had he done any of the following, it was likely the costly motions and hearings relating thereto could have been avoided: (1) Met and conferred with counsel; (2) been more respectful and cooperative; (3) used the assigned case manager; (4) accepted Husband's counsel's offers to agree to a neutral forensic accountant.
- Watters' insistence on a expedited Feldman trial in the middle of the case rather than at its conclusion was unnecessary and unreasonably expensive to the parties, and wasted the Court's limited resources.
Judge Wong denied Jill's motions. "There has been a failure of proof sufficient to penalize husband and his attorneys Merrill, Arnone, Benoit or Johnson." She granted Ken's request that the Court find that the Petitioner, through her attorneys, engaged in a course of conduct that was sanctionable. Judge Wong observed:
"'The Court questions the wisdom of such a large firm as O'Brien, Watters to choose to 'educate' a newly admitted lawyer with a case that involved millions of dollars of varied assets in California and other states, with a long term marriage and complicated trust holdings. With no background in either civil or family law litigation, Mr. Andrew Watters admitted to the Court that he was taught to litigate this case with unbridled aggression. These uncooperative and uncivil courses of action have caused
Mrs. Davenport unnecessary delays and unnecessary attorney fees and costs.'" [Italics and emphasis added].
I don't know if this last reference is a typographical mistake , but if not Judge Wong's message that Jill's gladiators poorly served her is remarkable. It also spells "malpractice."
The court also criticized Ken, who had early on stated he would not engage in a court-ordered 4-way if Attorney Watters "was in the room." Judge Wong saw this position as "inexcusably rude and uncalled for. Respondent's arrogance must have hit a sensitive nerve in counsel because Petitioner's case became a case that rapidly deteriorated into unprofessionally rude conduct and speech after that."
What Divorce Lawyers Might Avoid
The appellate court found that "Andrew Watters' demeaning comments to opposing counsel were contrary to the California Attorney Guidelines of Civility and Professionalism promulgated by the State Bar in 2007 (Guidelines). These guidelines reflect that "attorneys have an obligation to be professional with . . . other parties and counsel, [and] the courts," which obligation "includes civility, professional integrity, . . . candor . . . and cooperation, all of which are essential to the fair administration of justice and conflict resolution." (Guidelines, supra, Introduction, p. 3.) Section 4 of the Guidelines further counsels that "An attorney should avoid, hostile, demeaning or humiliating words," further providing in relevant part that: "An attorneys communications about the legal system should at all times reflect civility, professional integrity, personal dignity, and respect for the legal system. An attorney should not engage in conduct that is unbecoming a member of the Bar and an officer of the court. For example, in communications . . . with adversaries: [¶] . . . [¶] c. An attorney should not disparage the intelligence, integrity, ethics, morals or behavior of the court or other counsel, parties or participants when those characteristics are not at issue. [¶] . . . [¶] f. An attorney should avoid hostile, demeaning or humiliating words." (Guidelines, supra, § 4, pp. 4-5.)"
Justice Richman continued "there is abundant evidence of Andrew Watters treatment - more accurately, mistreatment - of his opposing counsel in his correspondence with them. Bad enough that such correspondence occurs in any litigation. It is utterly inconsistent with a fundamental aspect of proper family law practice. "Family law cases are not supposed to be conducted as adversarial proceedings. Quite the contrary, the goal is to reduce acrimony and adversarial approaches common to general civil litigation and, instead, to foster cooperation between the parties and their counsel with a view toward settlement short of full-blown litigation. [See Fam. C. §§ 2100 (b), § 271(a) (sanctions for uncooperative conduct in family law cases); see also Cal. Atty. Guidelines of Civility & Professionalism § 19-in family law proceedings an attorney should seek to reduce emotional tension and trauma and encourage the parties and attorneys to interact in a cooperative atmosphere, and keep the best interest of the children in mind']."
"The record is replete with correspondence from Andrew Watters to Ken's attorneys that contained abusive, rude, hostile, and/or disrespectful language, correspondence that Andrew Watters himself acknowledged was substantial evidence, when in the course of his closing argument he stated that '[p]erhaps some unpleasant letters that could offend someone did substantially increase the cost of litigation.' Perhaps it did indeed. A few illustrations should suffice:
- his November 22, 2006 letter to Mr. Merrill referring to Ken's nonappearance for deposition, which letter provided in pertinent part as follows: 'Regarding your client's failure to appear once again for his continued deposition, we too regret that your client chose not to appear. As you know, we duly noticed his continued deposition for 11/20/06-11/22/06. Once again, you offer the same tired, old, and shopworn excuse. Your continued blustering about mutually agreeable dates, efficiency and promptness, and convenience is pathetic when your client's actions negate any semblance of cooperation. Talk is cheap. Actions speak louder than words. Your credibility is at stake here.'
- his March 13, 2007 letter to Mr. Benoit included remarks that were rude, including 'Enough already with the delays.' Worse, his letter indicated that he did not believe Mr. Benoit-the person he described as "the dean of the Family Law Bar"-telling him: 'We don't accept your implication that you didn't already have [the Request to Inspect] . . . . Perhaps you didn't look hard enough, because we filed a Motion to Compel . . . in which I attached RTI Set one to my Declaration. Or you weren't counting that copy.' And the letter ends with utter disrespect, with observations such as: 'this seems like a case of the pot calling the kettle black'; 'In your last paragraph, your first suggestion is illusory. . . ."; and, "Your last paragraph rings hollow.'
- his September 11, 2008 letter to Mr. Johnson which, bad enough, insinuated untruthfulness: 'We've noticed that, in the past, you have had some trouble keeping things straight. We also noticed that you tend to stretch things somewhat too far in the name of appearances.' Worse, it accused Mr. Johnson of unethical conduct: 'It's no surprise, then, that your letter of 8/7/08 appears to be an attempt to create a false and misleading exhibit for use at a later law and motion hearing so that your client can sit in court with a halo over his head, and so you can say look how many times Ken offered to settle! That wouldn't surprise us at all, given your practice of attaching a large pile of exhibits to your declarations without any testimony from you concerning their truth.'
Later confronted with such correspondence, Andrew's response was not apologetic. He indicated at one point it might have been "unfortunate," but that was it. In his words, 'So I should note if I caused undue emotional pain on the other side in terms of writing unpleasant letters, if I offended anyone, then that's unfortunate and certainly a learning process for me, but the fact is I am not on trial here. And, in any event, the attorneys on the other side-I'm sure they can handle it. Mr. Mike Merrill, I think, is a 35 year attorney, former Marine officer in Vietnam, has seen it all. Mr. Benoit is a 35- or 40 year family law lawyer. He's seen it all. Mr. Johnson was in the Navy, I believe. These are not attorneys not able to do lawyering because of unpleasant letters from a
baby lawyer on the other side.' [Italics added].
The appellate justices observed that Jill's position on appeal was equally unrepentant where, referring to "the tone of some of [Andrew Watters'] written communications," she describes it as "the expressions (sometimes intemperate) of a young lawyer frustrated that Ken was systematically obstructing the search for the truth by his actions in resisting routine discovery, which is supposed to be self-executing. Ken and his attorneys then created a smokescreen that prevented the trial court from seeing the substance of the communications in context."
Strong, strong language. An important caveat for the lawyers who will inevitably attempt to use Davenport to support sanctions' motions for uncivil conduct by opposing counsel is that just accusing the other side of behaving like Mr. Watters may itself seem abusive to a trial court. While the justices' opinion does not appear "overstated" given a record so rich in illustrations of what not to do, I think we need to be careful not to ourselves overstate it, or to try to fit conduct we don't like into a
Davenport box where that conduct fails to speak for itself. That is a species of risk that has blunted the edge of
Feldman claims since that decision was rendered, making it a less viable tool for under-empowered litigants. The corollary is that "trance begets trance." We don't want to make the same mistakes and so seem as aggressive as our opponents.
The Adversarial Tone Continued On Appeal
Accordingly, Jill was ordered to pay $100,000 in sanctions plus $304,387 in attorney fees to Ken. Unfortunately for her, Wife's attorneys' strategies on appeal remained obdurate. By this point Andrew Watters had gone "walkabout" and left the firm (following the trial court decision). O'Brien, Watters continued with the same verve as it had at the trial court level. For example, their briefs targeted Judge Cerena Wong with a number of arguments that one (including the appellate justices) might find to be offensive. The appellate court stated "[i]n sum, Jill manifests a treatment of the record that disregards the most fundamental rules of appellate review."
For instance, in addition to being highly histrionic, Jill's appellate arguments scolded the judge, accusing her of relying on inadmissible evidence while ignoring admissible evidence. Jill's brief posed the question: "Imagine if a high school civics class had been on a field trip to the court that day. How would the teacher be able to explain to his/her students that the judge said she would not follow the rules?" It is mind-boggling that seasoned attorneys would argue that high school students would see that the judge was not following the rules when the judge herself could not. Of course, the appellate justices concluded that just the reverse was true, and that all of Judge Wong's conclusions were well supported by the record and the law but that Jill and her "team" lacked a comprehension of the rules of evidence and basic propriety.
Frankly, Wife's team had reasons to be concerned about Judge Wong's treatment of the evidentiary objections, but is it possible that in assailing the trial court with the tone that they apparently used that this triggered a defensive reaction in the appellate justices which ultimately took center stage over the legal issues?
Jill argued that whatever the appropriateness of the statements made by attorney Andrew Watters, such communications were covered all by the "litigation privilege" set forth in California Civil Code section 47 and hence could not properly generate a sanctions' award. Similarly, Jill on appeal argued that Andrew Watters' communications were protected by the bounds of free speech and zealous advocacy. Not so ruled the Court. Family law is not the Wild West, nor is it a frontier where "anything goes".
What Went Wrong
(Or, 'Should People Living in Glass Houses Throw Stones')?
We family court lawyers are not entirely to blame for getting lost in the dark woods of adversarial divorce to such an extent that some misplace their ethics or, as here, lose control of our emotions - our clients' experiences of divorce are devastating, and lawyers respond to the felt needs of the consuming public like any other industry. Some clients entice us with a willingness to pay "whatever it takes" to personify their angst in formulating our strategies for them - and it is extremely difficult not to become enmeshed in their emotional struggles to an extent that blur the boundaries between their experiences and perspectives and our own.
Particularly as a younger lawyer I confess at times I was deluded into buying my clients' attitudes and personalizing the pain within the stories, and sometimes adopted an arrogance and one-sidedness in accepting their views as the entire picture. This remains a struggle for me at times today. Caring, which I suspect all the members of the O'Brien law firm share, is what is honorable about "zealous advocacy." Unfortunately, relationship wars tend to challenge us all beyond our capacity to stay mindful - within depth of caring lies a trap. We can care too much, and strong emotions in any direction are a potent drug. I for one need to constantly reground myself, and to release the ferocity that accumulates from the frustrations of interacting with high conflict litigants and attorneys. And since this is so for me, it must be so for the others - a realization that can offer some balance and even crack a door to forgiveness.
The Mission Statement of O'Brien, Watters & Davis LLP as published on their website identifies their aspirations as follows: "To render quality legal services and maintain the highest ethical standards; to provide excellent service to clients; to use our best efforts to have our clients succeed and achieve results; to make a reasonable and fair profit; to maintain an excellent reputation in the community and within the legal profession; to be actively involved in and give service to the community; and to have mutual respect and support for one another." I trust that they mean this. Something strikes me as odd, however, about it. I sense a wisp of a sentiment that implies that rendering quality legal services might be inconsistent with maintaining the highest ethical standards; that excellent service is only measured by achieving results, which in traditional lawyer-speak means winning (and not necessarily settling) cases; and that achieving reasonable and fair profits is dependent on strategies for winning adversarially. I guess it is hard to not interpret their advertisement outside the light of what went on in Davenport.
O'Brien Waters, me the writer of this Blog, and you the reader are given the invitation and opportunity to reflect upon, re-evaluate, and close the gaps between our intention and actions, every day. Which is always a good reason to be grateful, since we can dust ourselves off and start out anew.
Marriage of Davenport is a wake up call. Andrew Watters is no demon, but this case contains a concentrated dose of the pitfalls of the adversarial paradigm. Is anybody listening?
Save yourself unnecessary grief and expense, and live a longer life. Seek out family law specialists who have the genuine desire and interest to help you set (and reset as required) a tone that might free you from this mess, rather than binding you more tightly within it!
I believe that the law firm that assisted Ken in this case deserve recognition and naming for their role in this landmark case: Perry, Johnson, Anderson, Miller & Moskowitz by John E. Johnson and Deborah S. Bull. Congratulations!
Thurman W. Arnold, III, C.F.L.S.
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| May 03, 2011 |
| San Diego Trial Court REVERSED (Again) in MOVE-AWAY Case |
| Posted By Thurman Arnold, C.F.L.S. |
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Parental Relocations and Move-Away
In response to a recent article I posted about the case of F.T. vs. L.J., the mother of the Mother in
Mark T. vs. Jaime Z. submitted a comment about a new reversal of a case involving Judge Lisa C. Schall, in San Diego, on this Blog - for which I thanked her. I am grateful that family law litigants in these published appeals are increasingly airing their side of the experience here, and I invite you to as well!
The decision in her daughter's case was published on Friday, last week, so I now understand what the maternal grandmother, "Shelly," was referencing.
My sense is that appellate courts are expecting more out of trial judges, like never before, and lawyers too, to be sure, and therapists and court services personnel and litigants themselves! An interesting footnote is that the father's attorneys in this case were certified family law specialists, and (presumably) local San Diego heavyweights, and the mother represented herself and yet succeeded "against all odds." Is this an Elkins Aftermath, leveling the playing field for unrepresented parties against experienced adversaries?
Mark T. and Jamie Z. (2011) 194 Cal.App.4th 1115
In
Mark T. v. Jamie Z.
certified for publication on April 28, 2011 by the Fourth Appellate District, a San Diego trial court was again reversed in a move-away case where she effectively refused to permit a custodial parent to move out of state without addressing what custody orders should issue if the parent did move. In F.T. vs. L.J. it was the Father who wanted to relocate - here it was the Mother but in both cases it was the same judicial officer.
Judge Lisa C. Schall doesn't like move-aways, it appears. These applications challenge the non-moving parent and can negatively impact a child's access to that parent, and disrupt parent-child bonding, if a holistic parenting plan under the move-away regime is not developed.
Judge Schall bears the indignity of being reversed twice now in less than 30 days in a reported appellate decision - quite a scolding. Family law is damned tough for judicial officers, who are doing their best to protect children and weigh in consistently with the cutting edge policies of current mental health science as well as their in-house (FCS) advisors. The problem at present is that the opinions of MHP's (mental health providers), and the wisdom of the reviewing courts, are in conflict. The science of move-away as it affects families from the MHP perspective is still developing, and it collides with certain cherished assumptions the law makes about the rights of Americans, and specifically parents in California under our current statutory scheme (
see Family Code section 7501 and the
Burgess case) to move freely.
In both cases Judge Schall accepted (mostly) the independent opinions of outside, court-appointed, mental health forensics and ignored the opinions of the Family Court Services mediator - here the very same Lynne Waldman who made recommendations in the F.T. case. FCS mediator Waldman's belief was that Jamie's move away request should be granted, noting that Jamie had been L.'s primary caretaker since his birth, that Jamie had been unable to find a job in San Diego and was "living in poverty," and that Jamie appeared "to have a clear plan for the move."
Judge Schall now has two strikes against her for using judicial body language to create a result that she felt was fair and appropriate, and her findings on the record illustrate her dilemma. I'm reminded of my early youth playing pool (not so much) and hoping if I twisted my body hard enough, the ball would fall in the pocket. Most of us are doing the best we can. Trial judges, however, have a script they must follow.
In effect, Judge Schall's mistake was to refuse to permit a move-away by a Mom with a 22 month old child who had indeed been the child's "primary caretaker since birth." By effectively coercing Mom not to move by denying her move-away request, and by ignoring the question of "in whose custody" the child's best interests were served" or what arrangement should be imposed were Mom to move, Judge Schall committed reversible error. The justices ruled:
"The court must decide de novo what physical custody arrangement would be in the child's best interests,
assuming that the requesting parent will relocate
." Therapist Dr. Lori Love (we can't invent this name stuff) was appointed to evaluate the family for the Court and opined that "[t]his examiner understands the importance of having extended family around for support however this cannot be justified as being in [L.'s] best interest[s] when it means removing him from a loving and capable father. Jamie stated that she did not have an active father in her life and very much wants that to happen for [L.] It would be virtually impossible for Mark to be an active father from across the country." Dr. Love urged the child was too young for the move and went on to recommend that Mom not "be permitted to move out of the County of San Diego. At the same time, this forensic therapist was unwilling to recommend a primary change in custody and assumed that the mother would in fact remain the primary caretaker in San Diego county. She made no recommendations about what custodial arrangement should become effective when or if the Mother moved.
The appellate justices ruled: "Where, as here, a parent who shares joint custody of a minor makes a request to relocate the child in the context of an initial custody determination, the trial court must decide de novo what physical custody arrangement would be in the child's best interests. In making its custody determination,
the court must proceed on the assumption that the parent who is making the request will relocate his or her own residence,
regardless of whether the court grants or denies the request. In this case, the court erroneously failed to conduct its best interests analysis based on the presumption that Jamie would be relocating to Minnesota."
The trial court adopted the recommendations of Dr. Love, even though Dr. Love failed to address what should happen if and when Jamie relocates out of state. "The very issue that Dr. Love was supposed to address is what parenting plan would be in L.'s best interests,
given that Jamie intended to move to Minnesota
....
The court misapplied the law in adopting Dr. Love's recommendations, because in making those recommendations, Dr. Love incorrectly assumed that preserving the status quo parenting arrangement was an option, even in the face of Jamie's expressed intent to move...."
At trial the Father's attorney asked Mother whether she would move if the court were to deny her request to relocate, and Mom's response showed she was tortured by the question. The appellate court ruled that this question by counsel was improper - courts cannot consider whether the primary parent might alter their plan of relocate depending upon how the court rules. As a trial lawyer this is interesting to me, because this question is often used to telegraph a message to the Court that implies it can deny the move because the moving parent evidently doesn't want to move 'badly enough.'
Apparently the trial court suspected Mother's motives for moving might include frustrating Father's access, but the court did not actually make such findings. "The court's comments regarding Jamie's reasons for moving to Minnesota appear to constitute second-guessing as to the wisdom of Jamie's decision to move (i.e., questioning the "necessity" of the relocation), as opposed to a finding that her decision to move was made 'simply to frustrate the noncustodial parent's contact with the minor child.'" There is no requirement that a parent who has the right to custody of a child establish the necessity of a proposed move. "[E]ven where the court finds that a move away request is being made in bad faith, the court must view this finding as only one potential factor in deciding whether to allow the child's residence to be moved; it does not permit the court to deny the move away request on the presumption that in denying the request, the court can assure that the requesting parent will not in fact move, and that the court can thereby maintain the status quo parenting arrangement. That one parent may have been motivated, in part, to relocate the child's residence by a desire to lessen the child's contact with the other parent does not mean that the court should apply any standard other than what would be in the best interests of the child."
The Bottom Line
If a parent with the right of custody seeks to relocate with a child and there is no final custody decree then in existence, the trial court must determine what the new custodial arrangement should be based upon the child's best interests under these new circumstances. The court cannot substitute its wisdom for that of the moving parent, or refuse a move simply because it disagrees with the parent's reasoning for leaving. Even if it finds the moving parent is moving to frustrate visitation with the other parent, that is but one factor among several affecting the child's best interest and it is not itself sufficient, without more, to change custody.
Judges cannot refuse to permit the child to move in the hopes of coercing the parent into staying locally instead. It is improper for judges and lawyers to ask moving parents whether they would still move if they lost custody, or to even consider this question. This means that it is similarly improper for outside evaluators to ask or consider the question either, or to report any such answer (or an opinion about what the answer might be) to the Court.
Most important, recommending therapists and family court services personnel must evaluate and render an opinion about what is in the child's best interest, and specifically what a parenting plan should look like, by taking it as granted that the parent who wants to move really will move. Otherwise, they've wasted everybody's time and money no matter how good their intentions or how firmly they feel about the current mental health literature, or their own clinical experience, concerning the negative effects of move-away.
The issue to be decided in move-aways is not whether a parent can move, but what the custody and visitation arrangement should be assuming the move will occur, once they announce that they intend to relocate.
There is something implicit here that suggests that once everybody agrees that the moving parent is the better prime time parent, the move must be approved (again, the real question is "who should have custody" not whether the move is to be "allowed") and the inquiry then shifts to what the remaining parent's visitation shall be.
Thurman W. Arnold, C.F.L.S.
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| May 02, 2011 |
| Announcing the REVENGE of ELKINS - How Family Courts Are Making Your DIVORCE More Expensive Than Ever Before! |
| Posted By Thurman Arnold, C.F.L.S. |
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The consequences from the 2011 Elkin's Task Force changes to the Family Code are beginning to take roost, making your efforts to obtain a California divorce, legal separation, annulment, or dissolution of domestic partnership way more expensive then ever before. Which may be a good thing, since we should all be mediating and settling these cases (and financial incentives like this manage to force some litigants to behave more sensibly)!
Family Code section 217 introduced the requirement for live-testimony hearings at OSC's and at notice of motion hearings, and we just don't have the budgetary ability to manage and accommodate all these new contests.
The courts were already over-burdened, but Elkin's Revenge guaranteed that the system would begin to collapse (as I predicted) and we are now beginning to see that this is so. More will be revealed.
The result is that trial judges have, in April, 2011, decided to impose a vast new set of requirements on family law litigants that promises to make their experience of Family Court more expensive and complicated than ever before. Which is a good thing for family law specialists, like myself, ... except that I really do want you to get out of this mess intact and with some money left over for your children's college educations (or just a little peace)! I can't imagine how non-represented parties will navigate through this latest morass, however.
Effective April, 2011, the San Bernardino Family Court has adopted this new form which must be filed with the Court prior to any mandatory settlement conference and before you get a trial date.
Similarly, Riverside County adopted this form under similar circumstances last month.
Oh, and this one too if you are requesting spousal or domestic support. Expect other counties to follow suit. You may be sanctioned for failure to comply with these new informational requirements, and/or you may find you cannot conclude your case until you do comply.
Now I am not saying this is a "conspiracy" to punish recalcitrant litigants and in fact the work that someone (including otherwise lazy family law practitioners) must do to fill these things out guarantees the case is really ready for settlement or trial, on your dime. However, it will take five hours of extra fees in any middle class case with any marriage of significant duration to get them done, and as a non-lawyer do you have any idea what is now expected of you (from reading the questions you must answer)? I doubt it, because it takes a certified family law specialist in California to understand what information is being requested and why it is relevant (and it is). Pro-pers... good luck!
The system is broken because we are all so damned conflicted that nobody wants to give an inch. Give an inch, gain a mile!
Settle your family law disputes (or not as you wish, I have a mortgage to pay too!)
Thurman W. Arnold, III, California Certified Family Law Specialist
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| May 02, 2011 |
| I Have DOMESTIC VIOLENCE Restraining Orders Against My Child's Mother: The Family Court Services Mediator Recommended a Week Off/Week On VISITATION Schedule. Is This Right? |
| Posted By Thurman Arnold, CFLS |
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Q. I obtained DV orders against my child's mother because of her abusive behavior. Since custody was an issue too, the judge ordered us to mediate with Family Court Services. The FCS mediator has recommended week off, week on visitation to her of our 9 year old, but sole legal custody and sole physical custody to me. We have a hearing next week. I am having a hard time understanding how this much visitation time (50%) makes sense. Any thoughts?
Jorge
Jorge:
I think that the family court services mediator doesn't understand the law, but on a level I understand why he/she wants to encourage frequent contact with the child's mom. In this case it appears that by giving you sole legal and sole physical custody titles, that they can recommend any timeshare in terms of visitation that feels appropriate. They can't. The recommendation that you mention is clearly an attempt to end-run the limitations imposed by Family Code section 3044.
Family Code section 3044 creates a rebuttable presumption against joint legal and joint physical custody where there is independent evidence of domestic violence (as in
permanent restraining orders for up to five years, as opposed to temporary orders obtained
ex parte that are not upheld at the DV hearing). In order for a judge to issue orders for joint physical custody, they must find that the other side has rebutted this presumption. Failure to do so is reversible error. Check FC section 3044(b)(1) - (7) which lists some of the possible evidence that a court might properly consider in finding that the presumption against sole legal and physical custody has been rebutted.
Family Code section 3004 defines joint physical custody as follows:
"Joint physical custody" means that each of the parents shall have significant periods of physical custody...."
A 50-50 timeshare is de facto joint physical custody, no matter how the mediator or the court labels it. In my opinion courts are not free call something sole physical custody and then grant such a significant timeshare to the mother in your case without making the required 3044 findings.
Make this point to the judge at your upcoming hearing. Make sure he or she states their findings regarding the rebuttal factors on the record, and if any of the subparts to subsection (b) apply in your favor, point this out. For instance, has Mom completed a batterer's treatment program? [3044(b)(2)]. Has she complied with the court's orders [3044(b)(6)], meaning she has not re-violated the restraining orders? Has there been any further acts of domestic violence [3044(b)(7)]?
Moreover, subsection (e) states: "
When a court makes a finding that a party has perpetrated domestic violence, the court may not base its findings solely on conclusions reached by a child custody evaluator or on the recommendation of the Family Court Services staff, but shall consider any relevant, admissible evidence submitted by the parties." Hence, more is needed that a family court services' recommend to overcome the presumption.
Judges sometimes feel - in marginal DV cases in particular - that FC section 3044(1)'s reference to "frequent and continuing contact with both parents" is more important than the DV history and the risks that such orders imply. Mediators sometimes feel badly that 3044 is too strict. Some think that the label is what matters, but many cases (especially in the move-away arena) establish that such labels (i.e., joint custody or sole custody) do not control. We look instead to the actual timeshare.
The law is clear that documented histories of domestic violence cannot be ignored where children are concerned. On the other hand, if the Court makes findings that are substantially supported by the record in your case in Mom's, this is likely within its "sound discretion" to find that the 3044 presumption has been rebutted if there is any evidence to support the trial court decision.
BTW, I recommend you always argue the alternative that best supports your children together with your (and their) personal safety. In other words, just because you can cut off the other parent, don't do it unless it serves your children's interests.
Good luck!
Thurman Arnold, C.F.L.S.
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