Filed 8/20/18 Marriage of McCallon CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FOURTH APPELLATE DISTRICT

DIVISION THREE

In re Marriage of BONNIE and MARK McCALLON.

BONNIE McCALLON,

Appellant,

v.

MARK McCALLON,

Respondent.

G054567

(Super. Ct. No. RFLRS035276)

O P I N I O N

Appeal from postjudgment orders of the Superior Court of San Bernardino County, Michael A. Knish, Judge. Reversed and remanded with directions.

Law Offices of David B. Dimitruk and David B. Dimitruk for Appellant.

Law Offices of Beverly W. Quinn and Beverly W. Quinn for Respondent.

* * *

INTRODUCTION

After the wife prevailed on appeal from an order terminating spousal support, the trial court denied the wife’s request for attorney fees. We reverse because the trial court erred in denying fees under Family Code sections 2030 and 2032. (All statutory references are to the Family Code.) The court erred by considering only the wife’s ability to pay without also considering the husband’s ability to pay.

The court also erred in concluding the wife (1) waived the right to fees incurred in opposing the husband’s order to show cause regarding termination of spousal support because no substantive argument regarding fees was raised on appeal, and (2) could not recover fees incurred in her successful appeal of the trial court’s order. The wife was not required to make a separate request for fees on appeal from an order in connection with which she had already requested fees.

The trial court correctly determined that attorney fees were not recoverable under section 271, or under an alleged prevailing party clause in the parties’ marital settlement agreement. On remand, the trial court is to consider attorney fees only under sections 2030 and 2032.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

Pursuant to a written marital settlement agreement (MSA), which was made a judgment of the court in 2003, Mark McCallon agreed to pay Bonnie McCallon $1,100 per month in spousal support. In 2012, the trial court granted Mark’s order to show cause (OSC) and reduced spousal support to zero. This court reversed the trial court’s order. (In re Marriage of McCallon (Dec. 17, 2014, G050252) [nonpub. opn.].)

Bonnie then filed a motion in the trial court for attorney fees she incurred in opposing Mark’s OSC, pursuing the appeal, and preparing the motion for fees itself. Bonnie argued three separate grounds for recovering her fees: (1) the MSA, which was merged into judgment, contained a prevailing party attorney fee clause; (2) as a sanction for Mark’s conduct frustrating the policy of reducing litigation costs, pursuant to section 271; and (3) based on Bonnie’s need, pursuant to sections 2030 and 2032. Following a hearing, the trial court issued a notice of ruling on May 14, 2015. The court denied Bonnie’s request for need-based fees without prejudice, and set a hearing for further consideration of the issue after discovery had been conducted on the validity of Mark’s income declaration. The court denied Bonnie’s request for fees pursuant to section 271 with prejudice. The court also denied Bonnie’s request for fees pursuant to the terms of the judgment, without prejudice to pursuing her claim under sections 2030 and 2032.

Following discovery, further written argument, and a hearing, the trial court issued a final award on June 10, 2016, in which it found Bonnie had waived her right to seek attorney fees in connection with the underlying OSC. Bonnie had requested fees in opposing that OSC, and her request had been denied, but she failed to pursue the issue on appeal. The court also found that Bonnie had waived her right to recover attorney fees incurred on appeal by failing to request them, pursuant to In re Marriage of Keech (1999) 75 Cal.App.4th 860, 866-867. Finally, the court found that Bonnie had failed to establish her entitlement to a need-based award in connection with the attorney fees motion.

Bonnie filed a notice of appeal on August 5, 2016, from both the May 14, 2015 order and the June 10, 2016 order.

DISCUSSION

I. TIMELINESS OF APPEAL

Mark argues that Bonnie’s notice of appeal was untimely as to the prevailing party and section 271 issues because they were finally decided by the trial court in May 2015; the notice of appeal was filed in June 2016. We disagree. The May 2015 minute order was an interim order, not a final order on the motion for attorney fees, and thus was not appealable.

The order does not fall within Family Code section 2025, which would make it appealable under Code of Civil Procedure section 904.1, subdivision (a)(10), because there was no order of bifurcation of issues for a separate trial or hearing by the trial court.

The May 2015 minute order is also not a collateral final order. (Eisenberg et al., Cal. Practice Guide: Civil Writs and Appeals (The Rutter Group 2017) ¶ 2:77, p. 2-55.) As to the issue of attorney fees, the May 2015 order was not collateral to the general subject of the motion. The May 2015 minute order did not direct the payment of money or performance of an act by Bonnie. Therefore, two of the necessary elements of a collateral final order are missing.

II. STANDARD OF REVIEW

“‘A motion for attorney fees and costs in a dissolution action is addressed to the sound discretion of the trial court, and in the absence of a clear showing of abuse, its determination will not be disturbed on appeal. [Citations.] The discretion invoked is that of the trial court, not the reviewing court, and the trial court’s order will be overturned only if, considering all the evidence viewed most favorably in support of its order, no judge could reasonably make the order made. [Citations.]’ [Citation.] [¶] However, ‘while the court has considerable latitude in fashioning or denying a pendente lite fee award its decision must reflect an exercise of discretion and a consideration of the appropriate factors. [Citations].’ [Citation.] The trial court’s discretion in this area is thus limited by the statutes which enable the exercise of that discretion.” (In re Marriage of Keech, supra, 75 Cal.App.4th at p. 866.)

III. LANGUAGE OF THE JUDGMENT

With respect to attorney fees, the MSA, which was incorporated into the judgment, provides: “Each Party shall pay his or her own attorney’s fees and costs incurred in the negotiation and preparation of this Agreement and obtaining a judgment of dissolution of marriage. Each Party expressly waives any right to ask the court for an award of attorney’s fees or costs through the entry of the judgment or order incorporating or otherwise effectuating this Agreement. Both Parties reserve the right to apply for attorney’s fees and costs in any future proceeding to enforce or modify any modifiable provisions of any judgment of dissolution of marriage hereafter rendered, or any proceedings to enforce any of the terms of this Agreement.”

“‘“Marital settlement agreements incorporated into a dissolution judgment are construed under the statutory rules governing the interpretations of contracts generally.”’ [Citation.] We conduct an independent review of the [marital settlement agreement] that is the subject of the appeal. [Citations.] We construe the [marital settlement agreement] under the rules governing the interpretation of contracts generally.” (In re Marriage of Hibbard (2013) 212 Cal.App.4th 1007, 1012-1013.)

Bonnie argues on appeal that the MSA provision required the trial court to award her fees once she showed “legal services were performed to enforce the judgment.” We disagree.

The MSA’s attorney fee provision is not a prevailing party clause. The language at issue provides that Bonnie and Mark agreed to pay their own attorney fees incurred in negotiating and preparing the MSA, and in obtaining the judgment incorporating the MSA. Bonnie and Mark “reserve[d] the right to apply for attorney’s fees” in future proceedings “to enforce or modify” the judgment or to enforce the MSA. Reserving the right to take an action does not provide any right to or guarantee of the results of the action.

The fallacy of Bonnie’s argument is this: Under Bonnie’s theory, if Mark sought to modify the judgment, and Bonnie did not oppose Mark’s request, Mark would be entitled to recover his attorney fees from Bonnie.

We agree with the trial court that “the right to apply for attorney’s fees” gives the party the right to request fees pursuant to a statutory method, such as sections 271 or 2030 and 2032. It does not in and of itself create an entitlement to recover fees.

IV. SECTION 271

Section 271 authorizes the trial court to award attorney fees to one party fees as a sanction against the other party for taking actions that frustrate the policy to promote resolution of the matter, or are designed to prevent cooperation. “Notwithstanding any other provision of this code, the court may base an award of attorney’s fees and costs on the extent to which the conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys. An award of attorney’s fees and costs pursuant to this section is in the nature of a sanction. In making an award pursuant to this section, the court shall take into consideration all evidence concerning the parties’ incomes, assets, and liabilities. The court shall not impose a sanction pursuant to this section that imposes an unreasonable financial burden on the party against whom the sanction is imposed. In order to obtain an award under this section, the party requesting an award of attorney’s fees and costs is not required to demonstrate any financial need for the award.” (§ 271, subd. (a).)

The court denied Bonnie’s request for fees pursuant to section 271 with prejudice. In its order, the court stated: “At the hearing, Bonnie’s counsel seemed to be arguing that, because Bonnie had won the appeal, Mark’s original request to terminate support was legally incorrect and therefore frivolous. [¶] It is true that the Court of Appeal[] found that there was no change in circumstances shown at the hearing and that the request to terminate should have been denied. However, this by no means proves that the original request for order was frivolous. Under [Bonnie]’s logic, anyone who wins an appeal should be entitled to attorney’s fees for the original case which led to the appeal. After examining Mark’s original declarations in support of his request, this court concludes that there were legitimate grounds to ask for the court to terminate support. Nine years had passed since the judgment. Bonnie had sold a home at great profit and had received an inheritance. She had bought a new home and was working in a hospital. The judgment clearly provided that spousal support would continue until, among other things, ‘further order of the court,’ implying a right to modify or terminate the amount. The fact that Commissioner Gassner found . . . grounds to terminate support is further evidence of the fact that Mark’s request was not made frivolously, or without legal basis, or as a means to harass Bonnie. Even though the Court of Appeal[] found legal error in that ruling, this does not mean that Mark should be sanctioned for bringing his request.”

Section 271 is intended to serve as a sanction against meritless actions in dissolution litigation that unnecessarily increase the cost of the litigation. (In re Marriage of Abrams (2003) 105 Cal.App.4th 979, 991 [section 271 sanction reversed, in part, because “although father’s argument regarding the burden of proof has failed, it was not so devoid of merit that no reasonable person would have pursued it”].) While in our earlier unpublished opinion we concluded that Mark had failed to offer substantial evidence in support of his OSC, we specifically concluded that the trial court had jurisdiction to modify the spousal support order if either party made a proper evidentiary showing. Even without the proper evidentiary support for his OSC, the trial court did not abuse its discretion in finding that Mark’s request to reduce spousal support, made nine years after the MSA was signed, was so lacking in legal justification that it should be sanctioned under section 271.

V. SECTIONS 2030 AND 2032

The purpose of need-based attorney fees under sections 2030 and 2032 is to “ensure that each party has access to legal representation” in marital dissolution matters. (§ 2030, subd. (a)(1).) To determine whether a party is entitled to fees under those statutes, the court must first make findings on “whether an award of attorney’s fees and costs under this section is appropriate, whether there is a disparity in access to funds to retain counsel, and whether one party is able to pay for legal representation of both parties.” (Id., subd. (a)(2).)

Once entitlement to fees has been determined, the court then proceeds to decide what amount of fees would be “just and reasonable under the relative circumstances of the respective parties.” (§ 2032, subd. (a).) This determination requires the court to consider the factors set forth in section 4320. (§ 2032, subd. (b).) “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.” (Ibid.)

In denying Bonnie’s request for need-based attorney fees, the trial court considered the request from on different issues, as we will also do on appeal.

A. No Waiver of Right to Request for Attorney Fees Incurred in Opposing Mark’s OSC to Terminate Support.

As to attorney fees incurred in opposing the OSC to terminate spousal support, the trial court made the following findings: “The court finds that [Bonnie] waived her right to re-litigate the issue of attorney’s fees for the original motion to terminate spousal support. As [Mark]’s counsel correctly points out, she did ask for attorney’s fees in her original responsive declaration, a request which the trial court denied. No appeal was filed from this ruling, and [Bonnie] argues now that, because the appeal was successful, she is able to start over in the appellate process and there is no waiver. The court rejects this argument. She never raised an issue on appeal regarding the propriety of the trial court’s ruling on her fees request. The fact that the appellate court reversed on other grounds does not then give her the right to open up another appeal on other issues which could have been raised in the first appeal. As [Mark]’s counsel correctly points out, the appellate court effectively ended the case by reversing with directions. This does not then allow [Bonnie] to raise an appellate issue she had no[t raised] before.”

In Bonnie’s opposition to Mark’s OSC regarding spousal support, Bonnie asked the court to order Mark to pay her reasonable attorney fees. In the order terminating Bonnie’s spousal support, the trial court ordered that “[e]ach party shall bear their own fees and costs in this proceeding.” In In re Marriage of McCallon, supra, G050252, our disposition read: “The postjudgment order is reversed. We direct the trial court to deny the application for an order to show cause regarding modification of spousal support. Appellant [Bonnie] to recover costs on appeal.”

As a result of our disposition, the entire postjudgment order was reversed, including the trial court’s decision on attorney fees. (See Moore v. City of Orange (1985) 174 Cal.App.3d 31, 36-37 [reversal of judgment determining respondent was not entitled to any of the substantive relief sought in her petition for writ of mandate requires reversal of award of attorney fees to respondent]; see also Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1027; Allen v. Smith (2002) 94 Cal.App.4th 1270, 1284 [“‘An order awarding costs falls with a reversal of the judgment on which it is based’”].) Therefore, Bonnie was entitled to ask for fees on remand. She did not waive or forfeit that right.

The cases Mark cites in support of his argument that Bonnie waived her right to request attorney fees are inapposite, as they address the forfeiture of an issue on appeal by failing to raise the issue in the first instance in the trial court. (See Conservatorship of Joseph W. (2011) 199 Cal.App.4th 953, 968; Avalos v. Perez (2011) 196 Cal.App.4th 773, 776-777; K.C. Multimedia, Inc. v. Bank of America Technology & Operations, Inc. (2009) 171 Cal.App.4th 939, 948-949; In re Marriage of Hinman (1997) 55 Cal.App.4th 988, 1001-1002.) Bonnie did request attorney fees in the trial court in connection with Mark’s request for modification of support; the trial court denied the request for fees in the order terminating spousal support; and, on appeal, we reversed the entire order, including the denial of fees.

B. Failure to Request Attorney Fees Incurred on Appeal.

As to the attorney fees incurred in the first appeal, the court made the following findings: “As for fees incurred on appeal, the court notes that this could have been requested during the appeal. [Mark] correctly points out the Keech doctrine [from Marriage of Keech[, supra,] 75 Cal.App.4th 860 . . . ], which requires a fee request to be made during the pendency of a proceeding. The court considers that this issue has also been waived.”

The question is whether attorney fees must be requested before they are incurred to be recoverable under sections 2030 and 2032. We note that the In re Marriage of Keech case, on which the trial court relied, does not stand for the proposition that a party is barred from seeking attorney fees incurred on appeal under section 2030 after the appeal has been concluded. (See In re Marriage of Jovel (1996) 49 Cal.App.4th 575 [after success on appeal, husband requested section 2030 fees from a nonspouse party].) Indeed, the purposes of the statute would be frustrated by a rule that need-based fees could only be awarded if they were requested at a particular time. What if a matter appeared to be routine and could be handled with a minimal amount of billable attorney time, yet turned into a significant, lengthy matter?

An “action that transgresses the confines of the applicable principles of law” constitutes an abuse of discretion. (Orange County Water Dist. v. Alcoa Global Fasteners, Inc. (2017) 12 Cal.App.5th 252, 353.) The trial court erred in finding waiver.

C. Failure to Establish Need for Attorney Fees.

As to the attorney fees incurred in connection with the motion for attorney fees, the trial court found Bonnie had failed to establish a need under the relevant statutes. “As for fees for the present motion, the court finds the evidence insufficient to justify a needs-based award. While there may be some suspicions raised about the accuracy of [Mark]’s income statement, the fact is that the court’s original concern on this motion—a lack of evidence of [Bonnie]’s need for fees—has never been addressed. An examination of her Income and Expense Declaration shows assets of $84,000 and an outstanding bill to her attorney of $49,000. Moreover, she has been able to pay her fees from earnings, as indicated on page 3 of her declaration. Therefore, even if [Mark] has the ability to pay a share of her fees, she does not appear to have a need for this.”

Sections 2030 and 2032 require that the court consider both parties’ ability to pay and, further, to make an order that is just and reasonable in light of the parties’ relative circumstances. The trial court erred by making its determination based only on Bonnie’s ability to pay while acknowledging that Mark’s ability to pay was not clear from the evidence before it, but noting that it would deny Bonnie’s request anyway. On remand, an award of fees must be just and reasonable under both parties’ relative circumstances. The trial court should also consider all the attorney fees incurred, including those in connection with the motion for fees, the fees in opposing the OSC, and the fees incurred in pursuing the appeal.

DISPOSITION

The postjudgment order is reversed and the matter is remanded for reconsideration, pursuant to Family Code sections 2030 and 2032, of Appellant’s request for attorney fees incurred in opposing Respondent’s OSC to modify support, on appeal from the trial court’s order granting Respondent’s OSC, and in preparing the motion for fees underlying the present appeal. Our decision is without prejudice to any request by Appellant to request attorney fees incurred in connection with this appeal. Appellant to recover costs on appeal.

FYBEL, ACTING P. J.

WE CONCUR:

IKOLA, J.

THOMPSON, J.