Family Code Section 271 Only Authorizes Trial Courts to Issue Sanctions'
Awards in the Form of Attorney Fees and Costs, and Not General Damages
for the Consequences of Alleged Misconduct
We've written extensively about
Family Code section 271 sanctions, which section states "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". Section 271 is such
an important statute for reigning in, or at least evening the score against,
those litigants and their attorneys who stubbornly refuse to comply with
court orders, certain fiduciary duties, and procedures mandated by the
California Code and Rules of Court and in so doing generate litigation
expense for the other side. But trial courts are not given carte blanche
to punish even the most outrageous litigants, in terms of the larger money
damages that their conduct often inflicts on the hapless other party:
As a recent decision makes clear, the trial court may only award attorney
fees and costs per section 271.
This is another example of a trend we've noted over and over again,
that appellate courts are reading the family code statutes literally -
they mean what they say! (Duh). Trial courts, and creative lawyers, don't
have unfettered freedom to expand their arguments beyond the plain meaning
of the statutory authority.
Nonetheless, this is one of the most unfortunate outcomes we've seen
given the outrageous history of this case (to some extent on both sides)
highlighted below, not because the decision is wrong but because the appellate
court's hands were tied and the system is broken -
the California legislature may need to consider additional and stronger
remedies in corralling out of control divorce court litigants. Family
Code section 271 is not itself sufficient for evening the playing field.
However, as a result of a footnote in the decision there is an alternate
path which must now, within the standard of care for all family law attorneys
to avoid malpractice claims later, always be cited in your sanctions'
briefs and in judge's rulings:
CCP section 128.5.
We don't know for sure yet, but that section may give authority for
exactly the types of remedies that are needed for the most volatile cases.
The fact that the husband in this case, who saw his sanctions of almost
a million dollars evaporate at the appellate level, failed to recognize
the application of this principle which is known commonly to general civil
lawyers, reminds us that we family lawyers are first and foremost civil
Family Code section 210 means that all the civil rules are applicable to actions under the Family Law Act.
This case personifies
divorce trance at its worse - and the consequences for getting sucked into crazy battles
as both sides devolve into a bar fight are amply illustrated. The more
intransigent actor won not only by reversing the bulk of the sanctions
awarded against her, but in the "interests of justice" the appellate
court ordered each party to bear their own attorney fees and costs on
appeal - a sure disapproval of the tactics of both sides. The husband's
attorney arguably overreached in the scope of his sanctions' application
submitted to a trial court that was clearly over the top frustrated with
the other party, and so triggered the trial court into reacting in a way
that was reversible error. Hence, the more aggrieved party based simply
on a comparison of relative conduct blew themselves up, and chews and
swallows their own fees. It happens all the time.
Marriage of Sagonowsky
On December 21, 2016, the San Francisco based First Appellate District
issued a partly published decision in the case of
Sagonoswky v. Kekoa, A142866. It is actually a consolidated decision on two separately appealed
rulings, one being the "Rents Motion" and the being the "271
Motion", and so the decision skips back and forth between the two
sides of the same coin.
As the conduct over the course of the divorce litigation is described in
the appellate decision, Christina Sagonowsky has got to be the poster
child of obstructionist litigants who engaged in litigation war against
not only her ex, but against a number of San Francisco judges themselves.
If ever a divorce party deserved to be sanctioned by the trial court for
exactly the behavior proscribed by section 271, this is her. In the process,
the non-attorney fee related damages she cost her former partner were
huge, and that was part of what the husband hoped to rectify. But he did it wrong.
For me the case is more interesting for its facts and background than the
actual ruling, which is quite simple. It is the case history that exposes
the problems with existing remedies for grossly unsportsmanlike conduct,
and possibly when you finish reading this blog you may agree.
The trial court sanctioned Christina M. Sagonowsky the total sum of $767,781.23,
which included: (1) $500,000 for her "relentless and culpable conduct"
in "driv[ing] up the cost of the litigation" and "purposefully
frustrat[ing] the final settlement of the case"; (2) $180,000 for
causing a reduction in the sale price of real property awarded to Kekoa
in the dissolution judgment; and (3) $45,000 in interest on Kekoa’s
attorney fees bill. The court also partially granted Kekoa’s motion
for rents and security deposits (rents motion) Sagonowsky received on
properties awarded to Kekoa in the dissolution judgment and ordered Sagonowsky
to pay Kekoa $28,510.80. Hence, a really pissed off trial judge sanctioned
Christina $680,000 for non-attorney fee related subjects, as what were
essentially consequential damages suffered by Curtis on account of Christina's
The parties had an 11 year marriage, from 1992 to 2003. They acquired a
number of valuable SF rental properties over the course of their marriage.
In 2010 a judgment was finally issued, which awarded Curtis 3 of the properties,
and Christina 5 properties. Accordingly the parties were ordered to accomplish
all the deed transfers no later than December 15, 2010. Not to be told
what to do by anyone, and bolstered by a $2 million war chest that she
had inherited from her mother in 2008, Christina appealed the judgment
and refused to transfer title or management and control of the properties
awarded to Curtis to him while she collected the rents that belonged to
Curtis per the trial court ruling. That appeal by Christina was dismissed
in December, 2012, for her failure to file an opening brief, after having
sought and received 2 prior extensions of time. Curtis' attorney in
2013 sent Christina 5 letters demanding she sign the transfer deeds to
his client. Christina ignored them. Curtis' attorney next filed a
motion to have the clerk of the court sign the deeds on Christina's
behalf, which was granted.
The Rents Motion
Prior to that, in 2011, Curtis filed a motion to recover the rents Christina
had been collecting on his properties, and to determine whether Christina
was entitled to any management fees which she evidently contended she
was. Christina filed no opposition, and then just before it was to be
heard she filed pleadings claiming that she suffered a disability that
prevented her from attending the hearing. The trial court continued the
hearing several more times on that basis. Finally a hearing took place
which Christina did not attend, and $58,000 was awarded Curtis. However,
Christina successfully filed a Writ proceeding, so that a new trial court
hearing was set.
Next, Christina 'hired' an attorney, Bradley White, who promptly
tried to take Curtis' attorney's deposition. Curtis' attorney
moved for a protective order to quash the subpoena, and for sanctions.
The appellate decision notes that Mr. White and Christina were engaged
to be married, and owned real estate together. It appeared he earlier
had been advising her while she was supposedly self-represented. (Indeed,
one trial court found that White had "emotional outbursts during
... proceedings, threatened the Court," and took "legal positions
that were frivolous and intended solely for delay"). In any event,
the day before that RFO was heard, Christina filed a CCP section 170.6
motion to disqualify the bench officer, which was granted. The hearing
was continued (again) out a month and the matter was reassigned.
By the way, as we often comment, the key usually seems to fit the lock.
The appellate decision notes that Curtis had himself been declared a "vexatious
litigant" in other litigation per CCP section 391.7, which is something
that Christina regularly used to her advantage to shield herself from
his attempts to extract compliance from her to the family court's orders.
On the morning of the continued hearing, Christina filed a notice that
she was unavailable because of an alleged disability, stating further
that she would not be able to participate in court or discovery activities
until 90 days later. She attached a vague doctor's note. At that same
time, while she was unable to participate in this proceeding, she was
actively waging 2 other law suits in civil courts as against Curtis. Ultimately
Curtis' attorney got the protective order, and White was ordered to
pay attorney fee sanctions.
The rents motion was ultimately heard in January 2014, when neither Christina
nor her attorney appeared. The matter got continued again. Ultimately
it was set for hearing on the same date when the next motion, for 271
sanctions, was calendared in June.
The Motion for Family Code Section 271 Sanctions
In February, 2014, Curtis filed a request for approximately $777,000 in
sanctions per section 271 and using 7 different examples of conduct by
Christina and her attorney allegedly violating that section. Of this sum,
$43,000 was for attorney fees, $166,000 was interest on attorney fees,
and and $180,000 was for the loss of value in the sales price of one of
the properties awarded to Curtis - and, Curtis argued that
this amount should be doubled as Christina's punishment. Bad move.
As the appellate justices note, "Shortly after Kekoa moved for sanctions,
Sagonowsky began a campaign against the San Francisco Superior Court judiciary."
On the date set for Curtis' sanctions motion, Christina sought to
disqualify two of the bench officers assigned to the case for cause. These
motions were denied. Not to be undone, Christina filed a Writ as to one
of the denials, which was rejected on May 1, 2014.
The next day Christina filed a civil complaint in federal court for damages
and injunctive relief
as against a number of SF state court judges who had the misfortune of
being assigned to the case at different points.
Then, in June, 2014 Christina requested a stay of all proceedings for 6
more months based upon her alleged total disability under the Americans
With Disabilities Act (ADA). Her psychiatrist tendered a supporting declaration.
Her request was denied. An evidentiary hearing was confirmed for July
8. Christina filed another extraordinary Writ to overturn the refusal
to stay the proceedings, which was summarily denied. The July 8 hearing
was held. Thereafter the trial court issued a lengthy statement of decision,
which slammed Christina and her attorney's conduct with a number of
specific examples. The trial court granted Curtis' sanctions request,
including the doubling penalty of his claimed economic losses.
Christina appealed, again.
The Appellate Court Reasoning and Good Morning CCP Section 128.5!
Christina did not contest on appeal the trial court's description of
her conduct as "unscrupulous," "relentless and culpable,"
nor the characterization that her behavior was "economic warfare
fueled by her wealth, her bitter hatred of Kekoa, and her complete disregard
for the law." She basically said "so what, so sad, too bad."
And she was right.
While the Sagonowsky opinion has a good discussion about the limitations
of the express statutory language of section 271, and explains how any
prior reported decisions that seemed to imply that these types of sanctions
could extend beyond attorney fees were distinguishable, it is mostly unremarkable.
Clearly both the legislature and the judicial council in drafting the
statute and corresponding rules were aware that they could have built
in broader sanctions than merely attorney fee and cost recovery, but they
did not. Court's don't have inherent powers to just punish people
by way of monetary penalties payable to third parties. That power must
be authorized by statute.
There is however one bit of dicta in this case that is quite important,
which deals with a question we've raised before but which I don't
think has ever been addressed directly in a family court appellate decision
- the application of CCP section 128.5, which authorizes sanctions in
general civil litigation to compensate a party for "reasonable expenses,
including attorney's fees, incurred by [the] party as a result of
bad-faith actions or tactics that are frivolous or solely intended to
cause unnecessary delay." The Sagonowsky court, in footnote 10, states
that section 128.5 "likely would have authorized the sanctions at
issue, but Kekoa did not seek sanctions pursuant to that statute, and
there is no indication the court's order imposing sanctions was predicated
on that statute."
This means that had Curtis' attorney simply, and in the alternative,
CCP section 128.5 (and the trial court likewise in its Statement of Decision), the entire
outcome could have been different. I cannot imagine but that the appellate
justices would have loved to have gone the other way (though their impressions
of Curtis and his counsel are unclear), but they were constrained by the
mistakes that preceded the appeal.
I have to say that I am not convinced that CCP section 128.5 reaches as
far as this dicta suggests, but then I've not researched its history
because it is so rarely referenced in family law proceedings. Clearly
the lesson of this case is to ALWAYS include reference to section 128.5
in your sanctions' motions! Assuming there is no need for the legislature
to act by creating new family law sanction authorities, we will await
some reported decision in the upcoming years to answer that question!
As always, be safe out there!
Author: Thurman W. Arnold, III