Filed 8/10/18 Marriage of Bauer CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

In re the Marriage of BENNETT BAUER and CYNTHIA BAUER. H041338

(Santa Clara County

Super. Ct. No. 6-08-FL-000347)

BENNETT BAUER,

Appellant,

v.

CYNTHIA BAUER,

Respondent.

Appellant Bennett Bauer (Husband) appeals from an award of long-term spousal support under Family Code section 4320 to Cynthia Bauer (Wife) and the imposition of sanctions under section 271. After a hearing, the trial court ordered Husband to pay Wife $2,000 per month in section 4320 spousal support and also sanctioned Husband $50,000 in section 271 attorney fees and costs based on Husband’s dilatory litigation tactics and failure to comply with discovery obligations.

Husband raises two claims on appeal. First, he contends the trial court erred by imposing sanctions under section 271. He argues that he had insufficient notice and no opportunity to be heard; that the record fails to show Wife incurred these fees and costs; and that the court failed to consider whether the sanctions would impose an unreasonable financial burden on him. Second, Husband contends the spousal support order was an abuse of discretion because the court failed to adequately consider Husband’s disability status. Wife moves for sanctions against Husband on the ground that this appeal is frivolous.

We find Husband’s claims regarding spousal support without merit. However, we agree the trial court erred by imposing sanctions under section 271, as Husband had insufficient notice and opportunity to be heard. We will deny Wife’s request for sanctions and will modify the order to strike the award of attorney fees and costs, and affirm the order as modified.

I. FACTUAL AND PROCEDURAL BACKGROUND
II.
A. Factual Background
B.
Husband and Wife married in 1988 and separated in 2008. At the time of the spousal support hearing, Wife was 56 years old and Husband was 54. They had two children born in 1995 and 1997.

The judgment of dissolution was filed in 2009. A marital settlement agreement incorporated into the judgment provided for joint legal and physical custody of the children, with child and spousal support amounts subject to periodic review. As of 2011, the parties stipulated to an order that Husband pay $801 per month in child support and $848 in temporary spousal support.

In April 2012, Wife was laid off from her job as a consultant at Ricoh. In July 2012, she filed a request for order seeking to modify the existing child and spousal support order, among other things. Wife alleged Husband had “essentially disowned” their two children and abandoned them in a Starbucks parking lot while they were in his custody. At that time, Wife was not seeking attorney fees and costs.

In October 2012, the parties stipulated to an interim order granting Wife sole legal and physical custody of the children, with Husband to pay $3,034 per month in child support and $2,537 in temporary spousal support without prejudice to further adjustments. The trial court also set a trial date for the issue of long-term spousal support.

In March 2014, the trial court held a hearing on section 4320 spousal support. Although the parties indicated attorney fees and costs would be an issue at the hearing, they did not present any evidence or argument on the issue. Both Husband and Wife represented themselves. In June 2014, the trial court issued its findings and order. The court ordered Husband to pay Wife $2,000 per month in long-term spousal support starting March 1, 2014. The court also ordered Husband to pay $50,000 in attorney fees and costs as a sanction under section 271.

Husband filed a notice of appeal in August 2014.

III. DISCUSSION
IV.
A. Imposition of Sanctions and Attorney Fees
B.
Husband contends the trial court erred by sanctioning him $50,000 in attorney fees and costs under section 271. He challenges the order on three grounds. First, he contends he was provided neither sufficient notice nor an opportunity to be heard on the matter. Second, he contends the court imposed the sanctions without sufficient evidence of the amounts Wife spent on attorney fees and costs. Third, he contends the court abused its discretion in finding the sanctions did not impose an unreasonable financial burden.

1. Procedural Background
2.
Wife did not request attorney fees and costs in her July 2012 request for order to modify spousal and child support. The parties litigated various discovery matters thereafter, including Husband’s motion to quash subpoenas, Wife’s motion to compel, and Wife’s motion to quash subpoenas. The court ruled for Wife and against Husband on all these discovery matters. Husband then moved for reconsideration and moved to stay the discovery order. The court subsequently denied these motions.

In the course of the discovery litigation, Wife requested sanctions under the “Discovery Act” and attorney fees under section 271. In conjunction with these requests, Wife and her attorney submitted declarations alleging abuses of the discovery process by Husband. Husband also requested attorney fees. In an October 2013 order ruling on the discovery matters, the trial court denied both parties’ requests for attorney fees. The court denied Wife’s request on the grounds that it was procedurally defective for failing to set forth a declaration with sufficient supporting facts, and because fees were not available as a punitive sanction under the Code of Civil Procedure. The court did not explicitly address Wife’s request under section 271 in its order; it did not reserve jurisdiction over the issue or set it for future hearing. The court did leave in place the previously set trial on spousal support, without reference to attorney fees and costs.

In February 2013, Wife raised section 271 sanctions as an issue, this time in response to Husband’s request to set aside an earnings assignment order and modify child support. She alleged Husband’s conduct in filing that motion caused her to incur unnecessary fees and costs. Wife argued Husband did not cite a legally recognized ground for seeking to set aside or quash the earnings assignment order. She therefore asked the court for $10,000 under section 271. Both Wife and her attorney provided declarations alleging Husband inappropriately sought to quash the earnings assignment order and made a wasteful motion to modify support given the state of discovery. The trial court reserved jurisdiction over Wife’s request for sanctions. The record on appeal does not indicate whether the court set a specific hearing to address the reserved request, or whether it intended to hear the request at the March 2014 trial on spousal support.

In her trial brief of December 2013, Wife again asserted a claim for attorney fees and costs. Wife asked the court to bifurcate the trial on the issue of “attorney’s fees and costs and sanctions” pending resolution of the substantive matters before the court. Wife did not cite section 271 in support of her request. The only statute she referenced in her brief was section 2030, the needs based attorney fee provision. She generally alleged, “[Husband’s] actions have increased litigation significantly and caused the parties to incur large amounts of fees, for which [Wife] will be asking for fees, costs and sanctions.” She indicated she would ask for a separate hearing “and briefing schedule on those issues.” Wife did not specify the amount of fees at issue in her request. She did file an income and expense declaration (I&E), signed by her then attorney, stating she had already paid over $34,000, and still owed just under $8,500. Husband asked the court to deny Wife’s request for a “contributive share” of her attorney fees, and instead order Wife to pay a contributive share of his fees. Husband did not cite any legal authority in support of his request.

On March 18, 2014, Wife filed an updated I&E stating she had paid her attorney $53,989 in fees and costs to date, and that she owed her attorney an additional $24,575. She similarly filed an updated trial brief on March 21, 2014, in which she stated: “[Wife] no longer wants to bifurcate the issue of Attorney Fees. [Wife] is looking for complete resolution of ALL matters. [¶] [Wife] is seeking $60,000.00 (of the $81,662.59 paid) in legal fees from [Husband].” Wife did not cite any legal authority regarding attorney fees in her updated brief. She provided a declaration alleging Husband failed to cooperate with discovery and made “damaging and disparaging” allegations against Wife, causing Wife “great financial hardship.” She alleged she could “no longer afford” an attorney, and asked the court to order Husband to “reimburse” her $60,000 for “contributive legal fees.” Wife did not reference section 271 or sanctions in her March 2014 trial brief or I&E. In his updated trial brief, Husband reiterated his request that Wife should pay his fees, without citing any legal authority.

At the start of the hearing on March 25, 2014, the trial court orally set forth the remaining issues to be resolved. The court raised the issue of attorney fees and noted that both parties were seeking fees. Both Husband and Wife affirmed that attorney fees were at issue. The court did not clarify the statutory basis for either party’s request for fees. Aside from the discussion at the start of the hearing, neither the court nor the parties mentioned attorney fees again during the trial. The trial focused on issues related to spousal support. Neither party presented evidence or argument regarding attorney fees. The court did not ask the parties whether they intended to submit the issue of attorney fees on the pleadings.

Prior to the court issuing a written order in June 2014, Wife filed an additional declaration in May, reiterating her request for attorney fees. There is nothing in the record suggesting the trial court considered this declaration in issuing the June 2014 order. The caption on Wife’s May 2014 declaration indicates she provided it for a hearing before the assigned child support commissioner. In this declaration, Wife requested “at least $50,000” on the ground that Husband had caused her to incur excessive attorney fees and costs with various litigating tactics and failures to comply with discovery obligations. She did not cite legal authority in support of the request; she asked for reimbursement of “contributive legal fees and sanctions.”

In its findings and order of June 2014, the court found as follows: “The court finds that Husband’s actions, tactics and attitude in this case have caused substantial and unnecessary delay, time and expense. These actions and tactics include his multiple motions to set aside/reconsider prior rulings; his unreasonable and unjustified resistance to legitimate discovery requests and subpoenas; and his refusal, resistance and delays in responding to discovery. These actions and tactics are primarily responsible for the issues decided in this order not proceeding to a hearing as first set in January, 2013. The court finds that Husband’s conduct has clearly frustrated the policy of the law to promote settlement and reduce the cost of litigation by encouraging cooperation between the parties and attorneys. As a result of these findings, pursuant to Family Code § 271, the court orders Husband to pay Wife the sum of $50,000 as a sanction, as and for attorney’s fees and costs expended by Wife. This amount is immediately due and payable, and shall be paid forthwith. In ordering this award, the court finds that both parties were given notice and an opportunity to be heard by the parties’ filings, testimony and arguments; and further finds that payment of this sanction will not impose an unreasonable financial burden.”

3. Legal Principles
4.
Section 271 authorizes a trial court to award attorney fees and costs based 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.” (§ 271, subd. (a).) “The purpose of the statute is ‘ “ ‘to promote settlement and to encourage cooperation which will reduce the cost of litigation.’ [Citation.]” ’ [Citations.]” (Sagonowsky v. Kekoa (2016) 6 Cal.App.5th 1142, 1152.) Sanctions awarded under section 271 are limited to attorney fees and costs. (Id. at p. 1144.)

“Due process requires a party be given notice and an opportunity to be heard before a court imposes sanctions under section 271. [Citations.] In addition, the notice provided must specify the authority relied upon and must advise of the specific grounds and conduct on which sanctions are to be based.” (Parker v. Harbert (2012) 212 Cal.App.4th 1172, 1178 [emphasis added] (Parker).)

“A sanctions order under section 271 is reviewed for abuse of discretion. [Citation.] Accordingly, we will overturn such an order only if, considering all of the evidence viewed most favorably in its support and indulging all reasonable inferences in its favor, no judge could reasonably make the order. [Citations.] ‘We review any findings of fact that formed the basis for the award of sanctions under a substantial evidence standard of review.’ [Citation.]” (In re Marriage of Corona (2009) 172 Cal.App.4th 1205, 1225-1226.)

5. The Trial Court Abused Its Discretion by Imposing Sanctions Under Section 271
6.
The record supports Husband’s contention that he lacked notice and an opportunity to be heard on the issue of sanctions under section 271. Although the trial court expressly found “both parties were given notice and an opportunity to be heard” on the issue, this finding is not supported by substantial evidence in the record. Wife did not cite section 271 in any of the pleadings she filed for the March 2014 trial. While she did cite section 271 regarding discovery issues, the trial court denied her request for discovery related sanctions in its October 2013 order. Nothing in the record indicates the court reserved jurisdiction over her requests under section 271 or continued the issue for the March 2014 trial. The court did reserve jurisdiction over section 271 fees related to Husband’s motion to quash the earnings assignment order. Wife did not address the earnings assignment order in either of her trial briefs, suggesting she did not intend the court to rule on the request at the trial.

Wife did discuss Husband’s allegedly sanctionable conduct in her pretrial pleadings. This discussion standing alone does not meet the notice requirements of section 271 and Parker as Wife never identified a specific statute and did not cite any legal authority supporting her request for attorney fees as sanctions. Even viewing the evidence most favorably in support of the order, there is insufficient indication in her pleadings that Wife was asking the trial court to sanction Husband under section 271, as opposed to seeking fees and costs based on the parties’ relative financial circumstances under section 2030, the only statute Wife cites in her pretrial briefs. Her reference to her financial hardships and the need for “contributive legal fees” arguably could have provided notice to Husband of a request under section 2030. It does not give notice of a request for attorney fees in the nature of a sanction under section 271.

The lack of proper notice deprived Husband his opportunity to be heard on the issue. Husband did not address Wife’s allegations regarding his conduct in his pretrial briefs, but instead countered by asking for “contributive” attorney fees himself, further confirming he did not have notice of her request for sanctions and appeared to believe she was seeking section 2030 fees. Wife did not present any evidence on the issue of section 271 fees at the hearing, or make any argument at the June 2014 hearing, and thus there was nothing for Husband to assert or to provide in response to a sanctions request at that hearing.

In short, the record does not support the trial court’s finding that Husband had notice and an opportunity to be heard on the issue of sanctions as attorney fees at the March 2014 hearing. Based on this finding, we do not need to address Husband’s contention that there was no evidence Wife had incurred costs or fees, or that the court abused its discretion in finding the award would not impose an unreasonable financial burden on Husband. We conclude the trial court abused its discretion by imposing sanctions under section 271 and will modify that portion of the order accordingly, without prejudice to the trial court issuing a new award after proper notice and hearing, if appropriate.

C. Modification of Spousal Support Award
D.
Husband contends the trial court abused its discretion in awarding spousal support to Wife. He argues that the trial court failed to consider that he was disabled, and that the trial court should have invited him to offer disability pay stubs into evidence.

1. Legal Principles
2.
Section 4320 sets forth factors a trial court must consider in deciding whether to award long-term spousal support. These include, among other things, the extent to which a party’s earning capacity is sufficient to maintain the marital standard of living; the marketable skills of the supported party; the job market for those skills; the extent to which a supported party contributed to the attainment of an education or training; the needs of the parties given their standard of living; the parties’ obligations and assets; the duration of the marriage; the ability of the supported party to engage in gainful employment; the age and health of the parties; and any other factors the court deems just and equitable. (§ 4320.)

We review a trial court’s decision whether to award spousal support for abuse of discretion. “In awarding spousal support, the court must consider the mandatory guidelines of section 4320. Once the court does so, the ultimate decision as to amount and duration of spousal support rests within its broad discretion and will not be reversed on appeal absent an abuse of that discretion. [Citation.]” (In re Marriage of Kerr (1999) 77 Cal.App.4th 87, 93, fn. omitted.)

3. Background
4.
At the March 2014 hearing, the trial court received testimony from both parties and their witnesses regarding the section 4320 factors. Husband testified he was terminated from his employment in December 2013, and that he had since been receiving disability payments. His I&E filed in March 2014 stated he was receiving $4,268 per month in state disability payments. Husband did not file any documents supporting his employment termination. He testified that he had relied on his former counsel to provide that documentation.

When the trial court asked whether Wife disputed Husband’s status or the amount of disability, she complained that she had received no documentation on the matter. The court asked Husband whether he had filed any supporting documents, and Husband asserted he had produced them to Wife’s attorney. The court asked Husband, “What documentation do you have of the anticipated length of your disability?” Husband replied, “I don’t know, your Honor. I don’t know that. I just have to work with my doctor. I hope it’s soon. I don’t like this. I want to go back to work, but I have to work with him. So I don’t have that answer for you right now.” The court asked whether Husband would be able to return to his prior employer, and Husband testified he could not. The court asked whether Husband had any documentation of his employment termination, but he responded that he did not. He added, “I have my disability pay stubs. I figured that’s what I would need.” The court again requested documentation of husband’s employment termination. Husband claimed he had provided it to Wife, but he had no documents to provide the court. He again added, “All I have are the stubs,” but he did not offer to file them with the court.

The trial court then stated it had reviewed Husband’s recent supplemental trial brief and noted that it did not include any supporting documentation for his claim of unemployment and disability. The court addressed Husband yet again on this matter:

“[THE COURT:] [Husband], do you have with you any statements concerning your disability and its duration? Specifically, I guess I’m interested in whether you have anything that tells you or tells us for what duration you would be entitled to receive that income, how long the disability might run, assuming you continue to be disabled?

“[HUSBAND:] The doctor signs it off like a month, six weeks at a time. Right now, it’s running through April 1. So I don’t know what his decision will be at that point. I don’t know, your Honor.

“[THE COURT:] Do you have any idea how long you might be able to collect disability? Not just from your doctor’s authorization, but how much longer the disability insurance would be available to you?

“[HUSBAND:] Your Honor, I don’t know how that works with the state. I know they go as much as two year’s unemployment benefits, which I know respondent took advantage of for two years. I don’t know how long disability can run, whether they extend those or not, like they do unemployment. I don’t know enough about it. I don’t want to be on this long. I haven’t really investigated all of that.”

The court then inquired about the medical reasons for Husband’s disability. Husband replied, “The doctor, on his filings, said it’s severe hypertension, and it is the dizziness, fainting, and anxiety. We’re not sure exactly what that’s about yet. I’ve gone through heart tests and going through ear, nose, and throat work, as well. That’s the nature in a nutshell.” The court asked whether Husband had any documentation from his doctor, and Husband replied, “You know, early this morning, I started to make a copy, and I forgot, your Honor. I forgot it. I don’t have it.”

In its findings and order, the court set forth detailed factual findings regarding the section 4320 factors. As relevant here, the court found Husband had recently earned approximately $150,000 per year. The court further found Husband’s earning capacity remained consistent with his past earnings, and the court found, “Husband remains capable of paying spousal support, based upon his demonstrated earnings history and earning capacity.” As to Husband’s disability status, the court found, “Husband testified he was currently disabled at the time of the hearing, due to severe hypertension, dizziness, fainting, anxiety and high cholesterol. However, Husband presented no medical or other evidence to establish this claim; the reasons for any claimed disability, the anticipated duration of such disability, nor the amount of any disability payments.” Based on this and the other factors under section 4320, the court ordered Husband to pay $2,000 per month in spousal support.

5. The Award of Spousal Support Was Not an Abuse of Discretion
6.
Apart from his claimed disability status, Husband does not dispute the trial court’s findings on the remaining factors under section 4320. Husband’s sole contention on appeal is that the trial court failed to consider his disability and should have invited him to offer his disability pay stubs into evidence.

We are not persuaded. First, the court addressed at length Husband’s asserted disability status. The court repeatedly questioned Husband about it at the hearing, and the court repeatedly invited Husband to submit documentation supporting his assertions. Husband failed to do so, and in his testimony he could not tell the court whether, or for how long, his asserted disability might last. We see no abuse of discretion in the fact that the court did not specifically invite Husband to submit his disability pay stubs. Nothing prevented Husband from offering them into evidence himself, and the court repeatedly solicited documentation from him to no avail. It also appears that the trial court was focused on the basis for the disability claim and likely duration of any claimed disability rather than on the amount of disability payment Husband received. The paystubs would not have addressed these concerns. Husband contends his testimony and unsupported declaration were sufficient evidence to support his claims, but we decline to second-guess the trial court’s credibility determinations. Even accepting Husband’s testimony and declaration at face value, he failed to offer any evidence whatsoever that his disabled status would continue past the date of the hearing for any length of time.

The court’s factual findings under section 4320 were supported by substantial evidence, and the award of spousal support was not an abuse of discretion. We conclude this claim is without merit. Accordingly, we will affirm the order.

E. Wife’s Motion for Sanctions on Appeal
F.
Wife moves for sanctions on the grounds that Husband’s appeal is frivolous and filed for the sole purpose of delay. She further contends Husband is attempting to hide his assets and circumvent the trial court’s judgment.

“On motion of a party or its own motion, a Court of Appeal may impose sanctions [. . .] on a party or an attorney for: [¶] (1) Taking a frivolous appeal or appealing solely to cause delay.” (Cal. Rules of Court, rule 8.276(a).) “An appeal that is prosecuted for an improper motive—to harass the other side or to delay the effect of an adverse judgment—or that any reasonable attorney would agree is totally and completely without merit will support an award of sanctions on appeal.” (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 192.) “In determining whether an appeal indisputably has no merit, California cases have applied both subjective and objective standards. The subjective standard looks to the motives of the appealing party and his or her attorney, while the objective standard looks at the merits of the appeal from a reasonable person’s perspective. [Citation.].” (Kleveland v. Siegel & Wolensky, LLP (2013) 215 Cal.App.4th 534, 556 (Kleveland).)

Given our ruling on attorney fees, we do not find Husband’s appeal to be frivolous. While part of Husband’s appeal is unsuccessful, we are not persuaded that it is “indisputably without merit,” as Husband makes “reasoned argument[s]” in support of his spousal support claims. (Kleveland, supra, 215 Cal.App.4th at p. 557 [an unsuccessful appeal is not necessarily frivolous].) Furthermore, Wife’s factual assertions about Husband’s attempts to circumvent the judgment rely on facts not in the record; such claims are best litigated below. Accordingly, we deny Wife’s motion for sanctions.

V. DISPOSITION
VI.
The order is modified to strike the award of section 271 attorney fees and costs as a sanction without prejudice to further properly noticed proceedings in the trial court. We affirm the order as modified. The parties are to bear their own costs on appeal.

_______________________________

Greenwood, P.J.

WE CONCUR:

_______________________________________________

Bamattre-Manoukian, J.

______________________________________

Grover, J.