From Casetext: Smarter Legal Research

In re Marriage of Pitto

California Court of Appeals, First District, Third Division
Aug 25, 2009
No. A120858 (Cal. Ct. App. Aug. 25, 2009)

Opinion


In re the Marriage of J. RUSSELL PITTO and VALERIE BEHRENDT. J. RUSSELL PITTO, Respondent, v. VALERIE BEHRENDT, Appellant. A120858 California Court of Appeal, First District, Third Division August 25, 2009

NOT TO BE PUBLISHED

Marin County Super. Ct. No. FL062618

Jenkins, J.

This appeal arises from dissolution proceedings in the marriage of appellant Valerie Behrendt (“wife”) and respondent J. Russell Pitto (“husband”). Wife appeals from the trial court’s pendente lite order awarding her the tax-free amount of $18,000 per month in temporary spousal support and an interim payment of $60,000 for attorney fees. We affirm.

Facts and Procedural Background

Wife and husband were married on September 4, 1999. There are no children of the marriage. Wife is the primary parent of a teenage daughter. Husband has joint custody of two sons from the marriage to his first wife Sheila Pitto, which dissolved in 1999, and also shares custody of his step-daughter. On June 19, 2006, husband filed for dissolution of his marriage to wife.

On October 18, 2007, wife filed an Order to Show Cause (OSC) why spousal support and attorney fees should not be granted. In her statement in support of the OSC, wife disputed husband’s assertion that the date of separation was June 1, 2006. Wife asserted the couple continued to have marital relations after June 2006 and sought reconciliation until May 13, 2007.

In her supporting statement, wife stated she is unaware of husband’s true net worth and income because his real estate and development business is complex and involves numerous entities. Wife submitted financial statements showing the net worth of husband’s holdings to be over $39 million in June 2002, over $27 million in March 2003, over $33 million in April 2005, and over $13 million in May 2007. Wife asserted that husband’s taxable income in 2005, as reported in their joint tax return for that year, was $3,351,189. His taxable income in 2006, as reported in his separately filed tax return for that year, was $268,420. Based on these income tax returns, wife states she believes husband is suppressing his income since 2006 in order to deny her the temporary support to which she is entitled.

Further, wife stated she is currently unemployed and without income. According to wife, husband continues to claim her as an employee of his business (as she was before the marriage) and pay her $2,800 per month. Wife also asserted that according to a spreadsheet prepared by husband and attached to her statement, she spent approximately $350,000 from June 1, 2006 to June 1, 2007 (or about $30,000 per month), which husband paid on her behalf. Wife states that during this period she was very careful with her spending and the figure of $30,000 per month represents far less than the lifestyle she became accustomed to during the marriage.

According to wife’s supporting statement, she leased a 1,200 square foot house in Larkspur for herself and her daughter in August 2006 at a rent of $4,240 per month. Wife states that upon obtaining temporary support, she intends to lease a home more commensurate to her previous lifestyle with husband at an estimated cost of $15,000 per month. Her previous lifestyle with husband, as described by wife, included regular travel to Europe, Mexico, Hawaii and Colorado, hosting catered events at their home, frequent dining and entertaining outside the home, and significant charitable giving in excess of $100,000 per year.

In her supporting statement, wife requests temporary spousal support in the amount of $90,000 per month to maintain the lifestyle she was accustomed to during the marriage. Wife’s income and expense declaration filed in connection with the OSC showed no income. It listed $90,000 in monthly expenses, comprised of $15,000 for rent; $5,000 for groceries; $3,000 for dining out; $4,000 for clothes; $7,500 for education; $15,000 for savings and investments; $20,000 for credit card purchases; a health care policy deductible of $1,000; child care costs of $1,500; utilities of $1,500; telephone costs of $1,500; entertainment costs of $6,000; auto expenses of $2,500; charitable contributions of $4,000; membership dues in the Tiburon Peninsula Club of $1,500; life insurance costs of $500; and, laundry and cleaning costs of $500. In her supporting statement, wife declared that her request for temporary spousal support is also based on 40% of $217,512 (husband’s average monthly gross income from 2004-2006 according to wife), or $87,004.85, pending full financial disclosures by husband.

In addition, wife’s supporting statement asserts that she will need considerable funds to retain counsel and experts in order to ascertain the full extent of the community estate and protect her interests. In this regard, wife submitted in support of her OSC a declaration by her counsel Jon-Marc Dobrin. In his declaration, Dobrin states he anticipates husband will demand a trial on husband’s contention that all property acquired during the marriage is husband’s separate property, pursuant to a post-marital agreement (PMA) between husband and wife. Dobrin also states that a marital settlement agreement between husband and his first wife Sheila values husband’s half of the community property at $5,817,227 as of June 30, 1999, two months before husband’s marriage to his client. Dobrin further states that the PMA shows the value of husband’s assets to be over $33 million as of April 30, 2005. Dobrin states that the case is complex and will require extensive discovery as well as experts in estate appraisal, economics, and forensic accounting. Dobrin asserts the case is akin to a “complex real estate partnership dissolution action,” and requests a need-based advance of attorney fees in the amount of $250,000, plus an additional $75,000 for experts’ fees.

In his responsive declaration to wife’s OSC, husband related that he met wife in 1995, when she worked as a 26-year old administrative assistant at his real estate company, Simeon Commercial Properties. At that time, husband was 52 years old and separated from his first wife Sheila. Husband stated that due to the difference in age, education, and economic status between himself and wife, he wanted to enter a prenuptial agreement. Husband stated that because wife had worked for his company for years, she knew his circumstances and agreed to enter such a prenuptial agreement. Husband explained that they were unable to complete the premarital agreement before the marriage on September 4, 1999. The agreement was further delayed while husband continued to work out the terms of a marital settlement agreement with his first wife Sheila, which was not concluded until October 2001. Husband stated that the PMA with wife was finally executed on June 13, 2005, and that wife was represented by counsel during all discussions and negotiations concerning their PMA. Husband stated that pursuant to the terms of the PMA, wife is entitled, among other things, to $100,000 for each year of the marriage, and that all property acquired by husband during the marriage is his separate property.

Regarding his income and financial status, husband declared that since 1983 his principal business activity has been real estate development. According to husband, real estate development entails prospecting, planning and financing projects over a span of years before such projects come to fruition. His income varies significantly year to year depending upon the success or sale of individual development projects. Husband stated that the significant decrease in his income in the last two years is a direct consequence of the downturn in the real estate market. As a consequence of the downturn, his company is currently involved in only one development project and staff has been reduced from 26 to 18 employees with more cuts likely to follow. Husband declared that the financial information he provided to wife is accurate and her claim that he provided her with false financial information is disingenuous.

Husband asserts wife’s claim that she needs $90,000 a month to maintain the lifestyle to which she became accustomed during the marriage “is a complete fabrication.” In this regard, husband described the expenses incurred during the marriage for housing. Husband stated that after he separated from his first wife in July 1995 he rented a small home on the Belvedere Lagoon for about $3,300 per month to house himself and his two sons (then aged 9 and 2). Shortly before his marriage to wife in September 1999, he leased another Belvedere Lagoon house on Peninsula Road for about $3,800 per month. This 4-bedroom home of approximately 1,300 square feet became the marital home. In October 2000, husband exercised an option to purchase the Peninsula Road property with the idea of building a new home on it. In early 2003, he and wife moved into another 4-bedroom rental home on Bayview in Belvedere until construction was completed on the new house on Peninsula Road. The Bayview house also had four bedrooms, comprised about 1,300-1,400 square feet, and cost about $3,800-4,000 per month in rent over a two-year period. Husband stated that he and wife moved back to the new Peninsula Road home in February 2006, by which time they had decided their differences were irreconcilable. According to husband, wife’s claim of $15,000 per month for rent is unreasonable because Belvedere Lagoon properties similar to the ones he and wife shared during most of the marriage are currently available for rent in the range of $3,500-$5,000.

Husband also states wife’s claim that she needs $5,000 per month for groceries and $3,000 per month for eating out is excessive and considerably more than they spent as a family of five. In a similar vein, husband asserts that wife’s claim for utilities expenses is four to five times greater than they incurred during the marriage and that her cell phone expense should be closer to $100 per month than the $1,500 estimated. Further, according to husband, his records show wife’s clothing purchases during the marriage were no more than one-third of the $4,000 per month she now requests in her claim for temporary spousal support. Husband states most of the $7,500 per month requested by wife for education is accounted for by the estimated cost of $60,000 per year for wife’s daughter to attend boarding school. Husband states that his step-daughter expressed an interest in attending boarding school and it is something he has wanted to provide for, but it is not consistent with the family lifestyle because no one else in his family has attended boarding school. Husband also disputes the amounts claimed by wife for automobile expenses and charitable donations, as well as her claims that he has a full time Nanny, a full time housekeeper, and a hired chef.

In a declaration regarding attorney fees and costs, husband’s counsel Roger Lewis states that his firm is in the process of preparing a motion for bifurcation to request a separate trial on the issue of the validity and interpretation of the PMA. To this end, counsel estimates each party would conduct a limited deposition of the other followed by a trial of a day or less. Overall, counsel estimated 40-50 hours to adjudicate the PMA at a cost in the range of $18,000-22,500.

The trial court heard argument on wife’s OSC at a hearing on December 18, 2007. The day before the hearing, the trial court issued a tentative ruling. In its tentative ruling, the trial court noted that the complexity of husband’s business interests made it difficult to determine his actual income from tax returns alone without addressing “questions about expenses, deferred transactions, and other characterization issues [which] have not and cannot be resolved at this stage of the proceedings.” The trial court also noted “[t]his is a marriage of short duration with no children of the marriage” and that it had been provided with “two very different versions of the marital standard of living.” Nevertheless, the trial court stated that “[w]hat is undisputed is that except for the last 16 months of their marriage this couple lived in upscale rental properties, took vacations, entertained, and lived well.” Further, the trial court noted that although wife had submitted a statement showing her credit card expenses from June 2006 to June 2007 were approximately $350,000, she did not provide a “breakdown as to what the expenses actually were.” Given all this, the court stated it would “set support based on wife’s needs to maintain a semblance of the marital standard of living with the belief that husband has the ability to pay.” The court stated that since neither party had presented it “with any reliable determination of what the amount would be this court will use its own experience in family court in this county in setting same. Marriage of Hoffmeister (1987) 191 C.A.3d 351.” On that basis, the trial court in its tentative ruling awarded wife $25,000 per month “taxable to wife and deductible by husband.”

The trial court also addressed wife’s request for pendente lite attorney fees in its tentative ruling. In this regard, the trial court stated “[o]nly necessary fees will be awarded” and “[d]iscovery should be tailored to the relevant issues.” The trial court noted husband intended to file a motion to bifurcate the issue of enforceability of the PMA, and that the resolution of this issue would “determine the breadth of the litigation. Wife is awarded the sum of $50,000 in attorney fees up to and through those proceedings.”

The parties contested the trial court’s tentative ruling and the court entertained oral argument on December 18, 2007. Husband’s counsel proposed that the amount of spousal support be made non-taxable to wife and non-tax deductible to husband because husband’s current business operating losses meant he could not take the benefit of a tax deduction. Counsel referred to support tax calculations showing that non-taxable spousal support of $15,515 per month yielded the same net spending power as the court’s tentative ruling of taxable spousal support of $25,000 per month. Responding to wife’s claim for $90,000 per month to support the lifestyle she was allegedly accustomed to during the marriage, husband’s counsel pointed out that husband’s expenditures over the last twelve months for himself and two high school children ran to $20,000 per month, exclusive of housing costs. For purposes of spousal support, counsel argued that if wife’s expenses were proportional to husband’s non-housing expenditures, and in addition she was allowed $5,000 for rental housing, then that would yield a sum of about $12,000 per month in spousal support. Additionally, husband’s counsel rejected wife’s assertion husband was attempting to minimize his income, pointing out that in his support calculation he reported capital gains of $1,700,000 in 2007. Counsel argued that “on the income side of it,” the SupporTax calculation yielded the sum of $9,700 per month non-deductible spousal support based on husband’s average income for 2006-2007. In conclusion, husband’s counsel submitted that a reasonable and appropriate order would be spousal support in the amount of $10,000 per month.

The Marin County Superior Court “uses the Norton SupporTax program to calculate guideline... temporary spousal support” and also employs a presumption for temporary spousal support that in cases “where the recipient of spousal support is not receiving child support from the same payor, the presumed temporary spousal support will be 40% of the net income of the payor less 50% of the net income of the payee.” (Marin County Superior Court, Uniform Local Rules, Rule 6.19(A)-(B).)

Counsel for wife argued there were a “lot of unknowns” concerning husband’s income. In this regard, counsel noted that whereas husband’s income and expense declaration reported living expenses of $43,000 per month, husband’s profit and loss statement shows his net expenses at $78,000 per month, excluding payments to his former wife under their settlement agreement. Counsel also argued the court “would be well within its discretion to increase the tentative ruling of $25,000 a month to have it match” the $37,000 per month expenses husband reported he paid on behalf of wife in his profit and loss statement submitted to the court. Wife’s counsel argued husband sought “to dramatically decrease what the court has ordered in its tentative, whereas in fact if anything should happen there should be an adjustment upward based upon his own profit and loss statement.”

Following argument, the court ruled as follows: “I’m adopting the tentative ruling with the following medications [sic]. I think it does make sense for... him [husband] not to take the tax benefits since they don’t allow it and for you [wife] to get [spousal support as] non-taxable. I still think the $25,000 support figure is appropriate for reasons set forth in my tentative. [¶] And also, when I look at the statement of profit and loss and I take away things like the excessive amount for the interest income on the [Peninsula Road] property, and I look at how much the personal expenses of [wife] have been on a monthly basis throughout 2007 I’m really not that far off. [¶] As you know you can’t give each party the exact marital standard of living because you are dividing the pie, so I can’t give them both the same amount of money they had before. So... I’m going to adopt [] the second support tax summary [] presented to me [by husband’s counsel]... which has the total support at $15,516, which is non-taxable to you, resulting in net support to you of $17,710.” Upon a request by wife’s counsel to receive spousal support gross and “deal with her own taxes,” the trial court decided it would “simply make it a total support of $18,000 to you instead of the $17,000 and that puts you really in a better place than you are if you pay taxes on it.” Regarding pendente lite attorney fees, the trial court stated: “I understand your [wife’s] concern about the attorney’s fees, and I am [sic] to issue a level playing field. I will give you the amount of $60,000 of attorney’s fees at this point. [¶] And I’m going to take a look at this motion to bifurcate the trial. And I want to see any proposals that you have, concrete, regarding experts that you need and why, and I’ll entertain it at that time.” At the conclusion of the hearing, husband’s counsel stated he would prepare an order and submit it to counsel.

On December 26, 2007, the trial court filed its Order After Hearing (Order). On January 15, 2008, husband filed a motion to vacate the Order, alleging that wife had improperly submitted it to the court for signature ex parte and that it did not conform to the court’s ruling. On February 14, 2008, the trial court held a hearing on husband’s motion to vacate and thereafter issued the following ruling: “In light of the confusion created by the preparation of this order and [respondent’s counsel] Mr. Dobrin’s failure to comply with Local Rule 6.16, this court has simply vacated the order it signed on December 26, 2007, reviewed the transcript of the hearing on December 18, 2007 and now issues its own order.

“Order after Hearing December 18, 2007: Beginning October 18, 2007, Husband shall pay Wife monthly support in the amount of $18,000 payable on the first of each month. Said support shall be nontaxable to Wife and nondeductible by Husband. Said support to be paid immediately.

“Husband shall be given credit for amounts paid to Wife since October 18, 2007. Amounts paid by Husband for community obligations are not to be credited against wife’s monthly support but shall be the subject of apportionment at time of settlement or trial.

“Wife is awarded the sum of $60,000 in attorney fees at this time. This court shall award necessary and appropriate fees as the case progresses.

“Sanctions: This court has previously advised the parties that it will not accept papers filed after statutory deadlines. The Court reminds the parties that it simply will not review such papers. Furthermore, Local Rule 6.16 required [respondent’s counsel] Mr. Dobrin to approve or disapprove Mr. Lewis’s [petitioner’s counsel] proposed order in writing and to serve his objections upon Mr. Lewis. That did not occur, instead, Mr. Dobrin took it upon himself to come to the court, ex parte, with the dueling orders. Mr. Lewis was unavailable and unaware of Mr. Dobrin’s ex parte appearance. That was inappropriate and Mr. Dobrin is sanctioned in the amount of $1,000. Said sanction is payable to Mr. Lewis within five days.” Wife filed a timely notice of appeal on February 25, 2008.

In her Notice of Appeal (NOA) dated February 25, 2008, wife purports to appeal from the trial court’s Order filed on December 26, 2007. Further, the NOA states in pertinent part: “The appellate court is alerted that the written Order [of December 26, 2007] attached hereto as Exhibit ‘A’ was modified or revoked by the Marin Family Law Court, in a tentative ruling of the trial court dated February 13, 2008, and such revocation was affirmed following hearing on February 14, 2008.”

Discussion

A. Temporary Spousal Support

Temporary spousal support is authorized under Section 3600 of the Family Code, which provides that “[d]uring the pendency of any proceeding for dissolution of marriage... the court may order [] the husband or wife to pay any amount that is necessary for the support of the wife or husband,... as the case may be.” (Id.) The purpose of temporary spousal support is to maintain the parties’ living conditions and standards as close to the status quo position as possible pending trial and division of assets and obligations. (In re Marriage of Burlini (1983) 143 Cal.App.3d 65, 68; In re Marriage of Wittgrove (2004) 120 Cal.App.4th 1317, 1327.) Moreover, the purpose of a temporary support order is not to determine the merits but “ ‘solely to preserve the family and the wife’s separate property intact until the court eventually determine[s] the case on the merits.’ (Citations.)” (In re Marriage of Askmo (2000) 85 Cal.App.4th 1032, 1038.)

Further statutory references are to the Family Code unless otherwise noted.

An award of temporary spousal support is “based on ‘a showing of two conditions: the moving party’s needs, and the other party’s ability to pay....’ (Citation.)” (In re Marriage of Dick (1993) 15 Cal.App.4th 144, 159; In re Marriage of Murray (2002) 101 Cal.App.4th 581, 594 [noting temporary spousal support awards are discretionary and may be ordered in any amount “subject only to the moving party’s needs and the other party’s ability to pay,” whereas permanent support “is constrained by numerous statutory factors set out in section 4320 (Citations)”].) In exercising its broad discretion to fix the amount of temporary spousal support, the trial court is “not restricted by any set of statutory guidelines... [and] [¶]... may properly consider the ‘big picture’ concerning the parties’ assets and income available for support in light of the marriage standard of living.” (In re Marriage of Wittgrove, supra, 120 Cal.App.4th at p. 1327.) In calculating temporary support, however, the court is free to use standardized temporary support guidelines as “a valuable tool.” (Ibid.) “Subject only to the general ‘need’ and ‘the ability to pay,’ the amount of a temporary spousal support award lies within the court’s sound discretion, which will only be reversed on appeal on a showing of clear abuse of discretion.” (Ibid.)

Wife contends that, for several reasons, the trial court ’s temporary spousal support award of $18,000 per month tax-free was an abuse of discretion. Wife asserts the award was too low because it ignored evidence she presented showing that husband “had earned many millions of dollars during the marriage” and that “[m]illions of dollars of cash were on hand and the parties lived an opulent lifestyle.” Wife claims this evidence was “not only unrebutted by husband, but also adopted by the Trial Court.” Wife further suggests the trial court overlooked husband’s alleged failure to produce financial information and relied on Marriage of Hoffmeister (1987) 191 Cal.App.3d 351 (Hoffmeister) to simply “make up a number.” Further, wife asserts the trial court ignored evidence, including her income and expense declaration, support calculations, and extensive declarations, demonstrating “the wealthy life style of the parties,” and that the award was “inadequate as a matter of law” because it did not maintain the status quo of the “accustomed marital lifestyle.”

Wife’s claims and assertions mischaracterize the record and are not persuasive. As noted above, the trial court’s discretion in awarding temporary spousal support is circumscribed by the supported spouse’s needs and the supporting spouse’s ability to pay (In re Marriage of Murray, supra, 101 Cal.App.4th at p. 594), and on this record we cannot say the trial court abused its discretion in assessing either wife’s needs or husband’s ability to pay in setting an amount of temporary spousal support at $18,000 per month tax free in order to approximate the marital standard of living.

Regarding wife’s needs, the trial court’s award approximates the expenses incurred by wife during the time period from June 2006, when the petition for dissolution was filed, until October 2007, when wife filed her OSC. A spreadsheet of wife’s expenditures reportedly prepared by husband (attached by wife as Exhibit 3 to her OSC) shows that between June 1, 2006 and June 12, 2007, wife incurred personal expenses, shown mainly as charges to various credit cards, and additional expenses, for such items as clothing, medical insurance, auto insurance and cell phone, totaling in sum around $169,000. The same spreadsheet also shows “Advances” in the amount of $103,565 and $36,108.71 attributed to expenses for her daughter. Adding all these together, wife’s total expenditures amounted to $345,247.58, which is less than $30,000 per month. Additionally, husband’s profit and loss statement dated December 4, 2007 lists wife’s expenses at $206,705 for a ten-month period from January-October 2007, or approximately $20,000 per month. Despite wife’s protestations to the contrary, there is no evidence that the expenditures shown in these documents represent a restrained or pinched level of spending on wife’s part. In fact, the documents provide substantial evidence for the trial court’s determination that wife’s needs were adequately addressed by the amount of temporary spousal support awarded. (In re Marriage of Dick, supra, 15 Cal.App.4th at p. 160 [trial court’s determination of wife’s needs reviewed for the existence of substantial evidence].) By contrast, wife offers no documentation in support of the raw numbers set forth in her income and expense declaration claiming total expenses of $90,000 per month.

Husband’s non-housing expenses for the ten months ended October 31, 2007 were around $20,500 per month according to the table of “Normalized Expenses” which husband submitted with his Income and Expense declaration. Such levels of expenditure do not suggest husband is enjoying a lifestyle far in excess of what wife would experience on $18,000 per month.

In short, the evidence presented by the parties on the “needs” side of the temporary spousal support equation presented the court with expenditures ranging from $20,000 to $30,000 per month. The court’s interim support order in the amount of $18,000 per month, non-taxable to wife, is consistent with the non-housing expenses disclosed in husband’s profit and loss statement for the ten-month period from January to October 2007 ($20,000 per month) and with the spousal support sum of $24,277 per month taxable to the payee shown in husband’s October 2007 SupporTax guideline submitted as an exhibit to wife’s Support Calculation. Moreover, in exercising its considerable discretion in determining the appropriate interim spousal support award, the trial court clearly rejected wife’s uncorroborated assertion that $90,000 per month reflected her needs under the marital standard of living. Accordingly, on this record, wife cannot establish abuse of discretion on the basis that the trial court set temporary spousal support at a level that did not meet her needs in approximating the marital lifestyle.

Nor do we find any abuse of discretion by the trial court in its determination of husband’s ability to pay. In this regard, wife contends that husband essentially depressed his actual ability to pay temporary spousal support by hiding the true extent of his income within his various business entities. Husband provided to the court under seal personal income tax returns for 2001, 2004, 2005, and 2006. The returns for 2004 and 2005 were filed jointly by wife and husband. The 2004 return showed an adjusted gross income of $4,210,830, and the 2005 return showed an adjusted gross income of $3,351,189. By contrast, the individual income tax return filed by husband for 2006 shows an adjusted gross income of $268,240. In his declaration of December 2007, however, husband acknowledged that his income was “down significantly in the last two years,” and explained this was due to a downturn in the real estate market.

The parties presented declarations by financial experts in support of their respective positions on the question of husband’s income. Husband’s expert, Richard Wilkolaski, stated in a declaration dated December 4, 2007, that in order to determine the income available to husband for payment of temporary spousal support he reviewed and relied upon husband’s 2006 Individual Income Tax Return and the Tax Plan/Projection for 2007 prepared by husband’s accounting firm. For purposes of determining husband’s estimated current annual income, Wilkolaski averaged the income amounts from the 2006individual return and the 2007 tax plan projection and arrived at a figure of $433,221 per annum.

Wife’s financial expert, William Stewart stated in his declaration of December 11, 2007, that the two year comparison (2006 actual and 2007 projected) prepared by Wilkolaski did not include $308,712 of tax-exempt interest income on the 2006 return. Further, Stewart stated that as a real estate professional, husband “is able to take advantage of tax strategies not available to the average taxpayer” and therefore his tax returns are not necessarily a true guide to his earnings. Stewart suggested that a better methodology is to “analyze cash flow” from husband’s business entities. Employing the cash flow methodology, Stewart calculated that in 2006 husband received cash distributions from K-1’s [K-1 Schedule is IRS Form 1065] and other interest income totaling $5,094,013 ($424,501 per month). If that amount is offset by capital contributions to K-1’s, then total income for 2006 falls to $3,382,441 ($281,870 per month).

In a subsequent declaration filed on December 14, 2007, Wilkolaski opines that Stewart’s calculations do not accurately capture 2006 income. Wilkolaski states he excluded the $308,712 of tax exempt interest income because he was focused on reportable taxable income. Wilkolaski added that the distributions shown on the K-1’s greatly exceed husband’s actual net 2006 income from the various partnerships because they represent net income from prior years and/or return of invested capital. Wilkolaski adds that a proper calculation of 2006 income based on the information in husband’s K-1 Schedule would include income and losses, not just distributions. According to Wilkolaski, under this approach husband would show a net loss of income for 2006.

Thus, as was the case in regard to the “needs” side of the spousal support determination, the parties presented the trial court with two widely differing estimates regarding husband’s income for purposes of the “ability to pay” side of the spousal support determination. The trial court recognized the difficulty inherent in determining husband’s true income. The trial court stated both in its tentative ruling and the order issued after the hearing on December 18, 2007, that the complexity of husband’s business interests made his income difficult to determine from tax returns alone and that an accurate determination of his true income would require analysis of issues that “cannot be resolved at this stage of the proceedings.” Nevertheless, based on all the evidence presented on husband’s income, the trial court found that “husband has the ability to pay” the court’s award of spousal support. Wife has failed to establish any basis upon which we could find that the trial court abused its discretion in making this finding. (See Williams v. Russ (2008) 167 Cal.App.4th 1215, 1224 [under abuse of discretion standard it is “appellant’s burden to affirmatively demonstrate error and where the evidence is in conflict, we will affirm the trial court’s findings”].)

Nor do we agree, as contended by wife, that the trial court ignored her evidence and relied solely on its own experience, under Hoffmeister, supra, to simply make up a number for temporary spousal support. In Hoffmeister, husband appealed the trial court’s order increasing an award of permanent spousal support. The appellate court reversed the trial court’s order. The appellate court ruled that an increase in permanent spousal support could not be based solely on husband’s increased ability to pay: Rather, wife also had to show that “she had a standard of living at the time of separation of the parties that was higher than that provided” by the initial award of permanent spousal support. (Hoffmeister, supra, 191 Cal.App.3d at pp. 363-364.) Remarking on the trial court’s failure to find that wife had made this necessary showing, the appellate court stated: “While certainly a trial court can rely on its own experience in family law matters to aid in evaluating the legitimacy of expenses, that experience cannot be utilized to provide evidence which is otherwise absent.” (Hoffmeister, supra, 191 Cal.App.3d at p. 363.)

Here, the trial court stated in its tentative ruling that wife’s professed needs as set forth in her income and expense declaration did not “conform to her actual expenses or present a credible claim for anticipated expenses.” Accordingly, the trial court stated it would “set support based on wife’s needs to maintain a semblance of the marital standard of living with the belief that husband has the ability to pay. Since neither party has presented this court with any reliable determination of what the amount would be this court will use its own experience in family court in this county in setting same. Marriage of Hoffmeister (1987) 191 CA3d 351.” The trial court’s statement, however, merely reflects the fact that, as noted above, the parties presented conflicting evidence on the marital standard of living, wife’s needs and expenses, and husband’s income. Nothing in Hoffmeister prohibits a trial court from using its experience to help resolve such conflicts in the evidence.

Moreover, the trial court’s statement about using its experience in determining temporary spousal support was rendered in its tentative opinion. After the trial court issued its tentative opinion, it held a hearing at which the parties argued the issue of temporary support at length. At the hearing, the trial court stated it was going to adopt husband’s SupporTax summary, adjusted to account for the award as tax-free to wife and non-deductible to husband, for total spousal support of $18,000 per month. The record shows that, before issuing its final order regarding temporary spousal support, the trial court read and considered the papers filed in connection with wife’s OSC, issued a thoughtful tentative ruling thereon, conducted oral argument at the request of the parties, and reviewed the transcript of oral argument again after wife’s counsel submitted an improper ex parte order. All this belies any suggestion that the trial court abused its discretion by simply ignoring wife’s evidence or utilizing its experience “to provide evidence which [was] otherwise absent.” (Hoffmeister, supra, 191 Cal.App.3d at p. 363.)

In sum, wife has failed to carry her burden of showing an abuse of discretion on the question of spousal support. The ruling therefore must stand.

B. Pendente Lite Fees

A need-based award of attorney fees and costs is authorized by statute to “ensure that each party has access to legal representation” during the dissolution proceeding (§ 2030, subd. (a)(2)), backed by “sufficient financial resources to present the party’s case adequately.” (§ 2032, subd. (b); In re Marriage of Keech (1999) 75 Cal.App.4th 860, 866 [stating that the “expeditious and final resolution of marital dissolution actions is best accomplished by providing at the outset of litigation, consistent with the financial circumstances of the parties, a parity between spouses in their ability to obtain effective legal representation”].) Such an award is permitted where “just and reasonable under the relative circumstances of the respective parties.” (§ 2032, subd. (a).) The key considerations are the payee-spouse’s need for the award and the payor-spouse’s ability to pay. (§ 2030, subd. (a)(1)-(2).) On the question of ability to pay, relevant factors include assets and earning capacity. (In re Marriage of Drake (1997) 53 Cal.App.4th 1139, 1167; see §§ 2032, subd. (b), 4320, subds. (a), (e).)

The trial court, however, retains broad discretion to award attorney fees. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 314.) “ ‘The need of a spouse for an award of attorney’s fees and the amount of that award are matters addressed to the sound discretion of the trial court. [Citation.] The exercise of this discretion will not be disturbed on appeal “without a clear showing of abuse.” ’ [Citation.]” (In re Marriage of Schaffer (1984) 158 Cal.App.3d 930, 935-936.) “ ‘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.]” (In re Marriage of Keech, supra, 75 Cal.App.4th at p. 866.)

Wife contends the trial court abused its discretion by rejecting her request for $250,000 in attorney’s fees and $75,000 in fees to retain an appraiser and economist, and instead awarding her the sum of $60,000. We disagree.

The trial court awarded wife “the sum of $60,000 in attorney fees at this time,” adding that it would “award necessary and appropriate fees as the case progresses.” At the time of the trial court’s award, the dissolution proceedings were at an early stage. The OSC regarding temporary spousal support had just concluded. A temporary support hearing is intended to be a quick, early hearing near the outset of dissolution proceedings whose purpose is to protect the parties’ interests and any community assets pending final dissolution (In re Marriage of Askmo, supra, 85 Cal.App.4th at p. 1038), and it does not require the same expenditure of legal resources as a permanent support order, which may involve a trial on the merits to determine the respective parties’ future needs, divide property, determine the supporting party’s ability to pay, and appraise the obligations and assets of each party. (See § 4320.) Furthermore, the trial court recognized that the breadth of future litigation in the matter, and the legal expenditures appropriate to that litigation, were dependent on the validity of the PMA. Thus, the trial court’s initial award of $60,000 in attorney’s fees for the OSC proceeding and litigation of the validity of the PMA, with further “necessary and appropriate fees [to be awarded] as the case progresses,” was a reasonable exercise of the trial court’s discretion.

Relying on In re Marriage of Hatch (1985) 169 Cal.App.3d 1213 (Hatch), wife argues the trial court’s fee award failed to “level the playing field” between the parties in terms of legal representation. In Hatch, the trial court denied wife’s request for pendente lite attorney fees after telling her counsel, “Spare yourself that kind of motion. I never grant attorney fees around here... because... in the family-law area an attorney normally carries the client until the time of trial.” (Hatch, supra, 169 Cal.App.3d at p. 1217.) Unsurprisingly, the appellate court held that the trial court’s failure to exercise discretion in denying wife’s motion for pendente lite attorney fees was an abuse of discretion. (Id. at p. 1222.) Here, by contrast, the trial court exercised its discretion to grant pendente lite attorney fees in an amount designed to carry wife through the initial stages of litigation in the dissolution proceeding.

Wife complains that the trial court’s incremental approach to awarding pendente lite fees was an abuse of discretion because the trial court was overly concerned with minimizing the expense of the litigation rendering the fees awarded “grossly disproportionate to those actually expected to be incurred by the party.” This contention is meritless. In exercising its discretion in the matter of attorney’s fees, the trial court may “ ‘evaluate [] whether counsel’s skill and effort were wisely devoted to the expeditious disposition of the case’ ” and may also “ ‘rely on its own experience and knowledge in determining’ ” the reasonable value of the nature and extent of the services rendered. (In re Marriage of Huntington (1992) 10 CalApp.4th 1513, 1524 [no abuse of discretion where trial court opined “this case should have cost no more than $10,000 for attorney’s fees” and denied additional request of almost $50,000 for attorney’s fees after $19,000 had already been awarded]; In re Marriage of Lopez (1974) 38 Cal.App.3d 93, 112-113, disapproved on another ground by In re Marriage of Morrison (1978) 20 Cal.3d 437, 453 [ no abuse of discretion where trial court opined wife “could have been well and properly represented... with a fee reasonably incurred in the sum of $5,000” and denied request for $15,345.32 in costs and attorney’s fees].)

Disposition

The trial court’s pendente lite orders for temporary spousal support and attorney fees are affirmed.

We concur: McGuiness, P. J., Pollak, J.

Wife’s NOA was filed after February 14, 2008, the date on which the trial court vacated its Order of December 26, 2007, and in its place issued the ruling quoted above, ante at pp.9-10. Thus, wife cannot appeal the Order of December 26, 2007, because “[a] judgment, when vacated, cannot be effective for any purpose. [Citations.]” (Levy v. Drew (1935) 4 Cal.2d 456, 459.) Nevertheless, because the NOA advised this court that the order of December 26, 2007, had been “modified or revoked” by the trial court’s order of February 14, 2008, we shall overlook wife’s attempt to appeal the December 2007 order vacated by the trial court. Rather, we shall liberally construe the NOA as an appeal from the trial court’s ruling of February 14, 2008 (see California Rules of Court, rule 8.100(a)(2)), on the grounds that a notice of appeal which erroneously designates a non-appealable order or ruling may be construed to refer to an appealable order or judgment if there is no confusion as to the challenged ruling and no prejudice to the opposing party. (See Vibert v. Berger (1966) 64 Cal.2d 65, 68-69 [construed notice of appeal from order sustaining a demurrer as appeal from the judgment]; Norco Delivery Service, Inc. v. Owens-Corning Fiberglas, Inc. (1998) 64 Cal.App.4th 955, 960-961 [construed notice of appeal from an order denying motion challenging good faith settlement as an appeal from the order granting a good faith settlement determination].)

In this case, there is no confusion that the ruling challenged is the trial court’s temporary support and attorney fee order issued in connection with wife’s OSC filed on October 18, 2007. Nor is husband prejudiced in any way if we construe the NOA as an appeal of the trial court’s ruling of February 14, 2008, because he has fully briefed the issues raised by appellant concerning the trial court’s temporary support and attorney fee ruling of that date. In sum, we reiterate that the December 2007 order vacated by the trial court has no legal force (Levy v. Drew, supra, 4 Cal.2d at p. 459), and the order subject to appeal is the order quoted in pertinent part above.


Summaries of

In re Marriage of Pitto

California Court of Appeals, First District, Third Division
Aug 25, 2009
No. A120858 (Cal. Ct. App. Aug. 25, 2009)
Case details for

In re Marriage of Pitto

Case Details

Full title:In re the Marriage of J. RUSSELL PITTO and VALERIE BEHRENDT. J. RUSSELL…

Court:California Court of Appeals, First District, Third Division

Date published: Aug 25, 2009

Citations

No. A120858 (Cal. Ct. App. Aug. 25, 2009)

Citing Cases

In re Marriage of Pitto

We now address the remaining issues on appeal in accordance with our order of September 2, 2009. In the prior…