Riverside Family Court Judge Reversed on Attorney Fee Request - Exalts FORM Over SUBSTANCE

Marriage of Sharples:

Trial Court Must Not Exalt Court Forms Over Substance

When Ruling On Attorney Fees Requests

A Riverside County family court judge was recently overturned in a denial of attorney fees decision that was certified for publication on January 22, 2014. Judge James T. Warren was reversed for having refused to consider the Wife's request for attorney fees on its merits because Wife, the 'out-spouse', had not filed Judicial Council Form FL-319 as part of her moving papers in support of her request for attorney fees and forensic costs, in what appears to be a complex, high-asset dissolution. Once Judge Warren had decided that the "mandatory form" was missing, he summarily denied Wife's request for fees in what would possibly have been a killing blow to the Wife's case - or at least to her ability to prosecute it. The case seems to turn on an endemic resistence by some family court bench officers to understand that the California legislature has directed trial courts to weigh the factors set forth in Family Code section 2030 and 2032 in deciding fee applications, and not to find technical excuses for failing to exercise that discretion. Reversals are always embarrassing to trial court judges, and are meant to be instructive.

While our bench officers are overworked, it is not proper to discourage divorce litigation by refusing to help fund it where there is a significant disparity in access to financial resources between the parties, and for that reason I applaud this decision. I want to give due recognition to attorney Aaron M. Hudson, a Certified Family Law Specialist out of Upland, California, for his persistence in prosecuting this successful appeal on behalf of Wife and to thank his office for bringing it to my attention some weeks ago. I encourage attorneys to let me know when an important appellate court decision is about to be released. I love cases where imbalances of power are meaningfully remedied as they were here. As always, the opinions expressed in my Blogs are my own.

In Marriage of Sharples the Wife filed an OSC to modify spousal support and for an order for $20,000 in attorney fees and $10,000 in expert accounting fees, which by most standards seems to have been a humble request - particularly with the parties' relative financial numbers as alleged in this case. Husband was the chief executive officer for Copan Diagnostics, Inc., a privately held biotech firm that makes flu sample collection tests among other things. She reported he had earnings of $855,850 in 2010 and that she too worked for the company for below minimum wage, and complained that Husband was squeezing her out of the company. She said she controlled $42,000 in assets and had monthly expenses of $9,700. Before the hearing, Mr. Hudson on behalf on Wife filed an amended request for $30,000 in fees and $20,000 in expert costs alleging that Husband's stonewalling litigation tactics was making the case more expensive to litigant. Husband was then earning $55,429 monthly, and her declaration explained that she was fast spending down her remaining assets. Wife had been forced to file a motion to compel the production of company documents, and Husband's attorney appear to have been avoiding financial transparency - a proven technique for financial starvation that some Los Angeles attorneys seem to be particularly skilled at employing.

As part of the attorney fee package, Attorney Hudson set forth his qualifications, his billing rates, and the need to retain the services of an accountant to value cash flow for support and the parties' interest in the company. Husband responded that he was already paying Wife $3,000/month and that he'd previously contributed $10,000 towards her attorney fees and that this new request was therefore excessive. I am not sure how his attorneys made that "excesssive" claim with straight faces, but Judge Warren's ruling does tend to provide grist for the adage "throw it against the wall and maybe it will stick". It stuck here, and had Wife's attorney not challenged the ruling, his client would have been pressured to accept whatever settlement Husband and his attorneys next offered. This happens way too often in that battles between 'out-spouses' and 'in-spouses', where a beleaquered divorce litigant is starved into submission. Judge Warren's decision was based upon an erroneous conclusion that Form FL-319 is required in all attorney fee applications. That form states on its face it is "Optional" and paragraph 5.b. explains that it may be used, together with the FL-158 Supporting Declaration, or that a "comparable declaration" may be submitted instead that addresses the factors set forth in Form FL-158. Judge Warren believed otherwise, even though Wife's attorney expressed his opinion to the Court that the form was indeed optional.

Justice King of the Fourth Appellate Court, Division Two, ruled that Judge Warren's belief that the absence of FL-319 warranted a denial of the fee request merited reversal. Family court judges are required by Family Code section 2030 to assure a parity between spouses in their ability to obtain effective legal representation. "The purpose 'is not the redistribution of money from the greater income party to the lesser income party,' but rather 'parity': a fair hearing with two sides equally represented. (Alan S. v. Superior Court (2009) 172 Cal.App.4th 238, 251)." [Emphasis in original]. He further notes that Family Code section 2032 guides trial courts to consider the need for an attorney fee award to enable each party to have sufficient financial resources to present that party's case adequately, that the trial court may consider the parties' trial tactics, and that trial courts have wide discretion in fashioning or denying attorney fee requests; however, there must be proof the trial court exercised that discretion, and a failure to do so constitutes (surprise!) an abuse of that discretion.

In 2010 the legislature made significant changes to the Family Law Act attorney fee awards, something I have extensively blogged about. This included adding subdivision (e), which directed the California Judicial Council to formulate a statewide rule for implementing FC section 2030. This originally came in the form of Cal.Rules of Court, Rule 5.93, which has since been revised and renumbered as Rule 5.427. That rule listed what a moving party was required to submit, and specifically spoke to the factors that needed to be presented where by using the FL-319 "or a comparable declaration that addresses the factors covered" in that form. Specifically, what needs to be addressed is:

  • the reason for the request for attorney fees and costs
  • the amounts requested
  • the specific fees and costs for which the order is sought
  • whether fees and costs have previously been ordered
  • a personal declaration of the party as to financial need
  • the attorney's biling rates and the nature of the litigation
  • notice to the responding party

Justice King concluded that "[u]nder the plain language of Rule 5.93, a party seeking attorney fees and costs under section 2030 must file and serve either form FL-319 or a comparable declaration." [Emphasis in original]. One or the other is mandatory, but not the form itself and "[t]he court rules and form FL-319 are unambiguous." Unfortunately, many family court judges and commissioners (and even more lawyers) seem never to have read the Cal.Rules of Court. The Justice sounds a bit exasperated, which makes sense because this sort of appeal should never have been necessary.

Accordingly, the trial court was reversed and Wife was also ordered to recover her likely substantial attorney fees on appeal, which ought to cause Husband to pause and hit the 'reset button' by rethinking his tactics and strategy. The case was remanded to the trial court to "conduct further proceedings consistent with the views in this opinion." This is not a good advertisement for Copan Diagnostics, Inc., or its chief executive officer. Maybe the husband should have considered a mindful divorce, instead, because there may be a Family Code section 271 sanctions' motion in the offing? There is still time!

Reversals like this may give rise to a right to disqualify the trial judge on remand so that the case can be reassigned to a different bench officer. I have never practiced before Judge Warren, but family court bench officers really need to take these requests seriously and not find reasons for rejecting them - otherwise, power imbalances will result in huge miscarriages of justice. IMHO.

Congrat's to the Hudson law firm and good luck out there!

Thurman W. Arnold III, CFLS