Opinion
A148382
05-30-2018
In re the Marriage of STEVEN STUPP and ANNEMARIE SCHILDERS. STEVEN STUPP, Respondent, v. ANNEMARIE SCHILDERS, Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (San Mateo County Super. Ct. No. FAM0110799)
In this marital dissolution proceeding, Annemarie Schilders (Annemarie) asks us to reverse a family court order denying her request that Steven Stupp (Steven) pay $370,000 in attorney's fees under Family Code section 2030. The order rested on the family court's finding that the parties were essentially in the same financial position and that neither of them had the ability to pay attorney's fees going forward. Because we conclude that the finding is not supported by substantial evidence, we shall reverse.
Statutory references are to the Family Code unless otherwise stated.
FACTUAL AND PROCEDURAL BACKGROUND
Steven filed for dissolution of marriage in 2010. A stipulated judgment of dissolution was entered in March 2014, and litigation in the family court and the Court of Appeal continued unabated. Annemarie appealed the entry of the stipulated judgment (see Stupp v. Schilders (Mar. 25, 2016, A142302) [nonpub. opn.]), and since then has initiated more than a dozen additional appeals and submitted several writ petitions.
Here, Annemarie challenges an order denying her request under Family Code section 2030 for a total of over $370,000 in attorney's fees over an eight-month period: $331,228.78 in fees she incurred from June 9, 2015 until December 24, 2015 (representing about 700 hours at $475 per hour), and an additional $40,000 in fees that her counsel estimated she would incur between December 24, 2015 and January 31, 2016 (representing about 80 hours at $500 per hour).
In her income and expense declaration, Annemarie stated that her average monthly income over the past 12 months was $8,000, that her average monthly expenses were about $8,000, her assets were about $500, and she owed her accountant $300, she owed about $16,500 in student loans, and owed more than $170,000 to Al Lerner for a loan. She said she had paid about $241,000 in attorney's fees, including about $240,000 to a previous attorney, and owed her current attorney about $530,000.
Steven opposed the request for fees, characterizing it as "absurd and a problem of [Annemarie's] (and her attorney's) own creation." He filed an income and expense declaration stating that his average monthly income was close to $57,500, and his monthly expenses were close to $11,400, not including monthly spousal support payments to Annemarie of $7,000. He said his assets were about $15,000, and he owed his parents $70,000 for a loan. He said he had paid about $900,000 in attorney's fees, and owed his attorneys about $70,000.
Steven also filed a supplemental statement in which he claimed that he worked more than 60 hours per week, and stated that he was in the 39.6 percent federal tax bracket and paid 39.6 percent of his monthly income, or over $22,000, in taxes. He said that after taxes, in addition to his average monthly expenses of $11,400, he paid $7,000 in spousal support to Annemarie, plus about $19,000 in attorney's fees and costs. In all, he claimed that his monthly expenses exceeded his income by about $3,000. Steven's supplementary statement is problematic in at least two respects. First, he represents that all his income is taxable, including his spousal support payments to Annemarie, even though the parties' stipulated judgment specifies that spousal support is tax-deductible to him and taxable to Annemarie. Second, he represents that all his income is taxed at 39.6 percent, which we understand to be the marginal tax rate of his highest bracket.
Annemarie's request for fees was addressed along with other issues at a hearing in March 2016. During the hearing, the family court stated that Annemarie "gets $1,500 in child support, which all goes against her contribution to add-on expenses. But her income is $8,000 a month in spousal support. And so she has those funds. Husband's income certainly is very high. It is based on him working significantly more than 40 hours a week, and because of, as the Court has said, I can't just look at the relative gross incomes of both parties. I have to look at what their federal income is, and on the issue of attorneys fees at this time, at least when I look at what is net spendable income based upon the expenses that he necessarily has to [incur] he's in no better financial situation than she is."
In response to a statement from Annemarie's attorney that Steven "is choosing to spend his money on attorneys," the family court remarked, "Well, he's choosing to respond to the . . . appeals. That's not a choice. He either does that or throws away the hundreds of thousands of dollars that both parties spen[t] trying to get to this judgment and the orders and starting all over again. So I don't look at—I am sure if he had a choice he would much rather move forward and not spend $10,000 a month or whatever it is."
The family court denied the request for fees: "As I said, the net spendable amount of both parties I find that each party has at this point an equal ability, which is almost no ability, to pay their fees going forward. And so the request under 2030 for fees is also being denied without prejudice to raise that again." A written order was prepared and filed, stating that Annemarie's request for fees was denied and that, "The Court found that after looking at the parties' net spendable incomes, [Steven] is in no better position financially than [Annemarie]." Annemarie timely appealed.
We deny Annemarie's request for judicial notice, which she filed the day before oral argument. --------
DISCUSSION
A. Applicable Law and Standard of Review
Sections 2030 and 2032 authorize the family court in a dissolution action to "award fees and costs between the parties based on their relative circumstances in order to ensure parity of legal representation in the action." (In re Marriage of Falcone and Fyke (2012) 203 Cal.App.4th 964, 974, fn. omitted (Falcone).) "When a request for attorney's fees and costs is made, the court shall 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. If the findings demonstrate disparity in access and ability to pay, the court shall make an order awarding attorney's fees and costs." (§ 2030, subd. (a)(2).) These findings need not be stated on the record, but the record "must reflect an actual exercise of discretion and a consideration of the statutory factors in the exercise of that discretion." (Alan S. v. Superior Court (2009) 172 Cal.App.4th 238, 254.)
The amount of fees is limited by a "reasonably necessary" standard. (§ 2030, subd. (a)(1).) Any award of fees and costs must be "just and reasonable under the relative circumstances of the respective parties." (§ 2032, subd. (a).) "In determining what is just and reasonable under the circumstances," section 2032, subdivision (b) directs the court to consider the circumstances listed in section 4320, which courts must consider in ordering spousal support, and which includes a catch-all that encompasses "[a]ny other factors the court determines are just and equitable." (§ 4320, subd. (n).) Accordingly, "[f]inancial 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." (§ 2032, subd. (b). The court may also consider the parties' trial tactics. (Falcone, supra, 203 Cal.App.4th at p. 975.)
We review the denial of Annemarie's request for section 2030 attorney's fees for abuse of discretion, and we review the factual findings on which the court based its exercise of discretion for substantial evidence. (In re Marriage of Sullivan (1984) 37 Cal.3d 762, 768-769.) Therefore, we must examine the evidence in the light most favorable to the prevailing party. (In re Marriage of Rossi (2001) 90 Cal.App.4th 34, 40.) B. Analysis
Annemarie advances several arguments to support her challenge to the family court's orders. We address just one: her claim that the family court erred in making the finding on which it based its decision, specifically the finding that Steven was in no better position financially than Annemarie. Neither party challenges the family court's finding that Annemarie's financial position is such that she has "almost no ability, to pay [her] fees going forward." The question before us, then, is whether the family court's finding that Steven is in the same financial position is supported by substantial evidence. We conclude that it is not.
The only evidence before the family court of the parties' relative financial positions were the parties' income and expense declarations. Annemarie's declaration shows monthly income of $8,000 that is about equal to expenses, $500 in assets, and debts of over $185,000, not including over $500,000 in attorney's fees she claims to have incurred but not paid. The comparable portion of Steven's declaration, leaving aside his supplementary statement, shows monthly income of $46,000 after expenses, $15,000 in assets, and debts of $140,000. That portion of the declaration does not account for Steven's monthly spousal support payment to Annemarie. If we consider that, allowing $8,000 per month to reflect the average that Annemarie claims, Steven has monthly income that is $38,000 more than his expenses, while Annemarie, with monthly income of $8,000, just covers hers. So far, then, the income and expense declarations are not substantial evidence to support a finding that the parties are in the same financial position.
We consider now Steven's supplemental statement, which was part of the evidence before the family court and which we must view in the light most favorable to the family court's finding. Even if the statement is accepted at face value, and its obvious discrepancies concerning taxes are ignored, the statement shows that Steven pays his attorneys about $19,000 a month. Annemarie, in contrast, pays hers nothing. In these circumstances, even if all Steven's fees are incurred in responding to Annemarie's appeals (as the family court apparently hypothesized), the declaration simply does not provide substantial evidence that the parties are in the same financial position, nor does it support the trial court's finding that, like Annemarie, Steven has "almost no ability" to pay his fees going forward.
Because we conclude that the family court's ruling relies on a finding of fact that is not supported by substantial evidence, we further conclude that the family court abused its discretion in denying Annemarie's request for fees, and we shall reverse and remand. We need not, and do not consider Annemarie's other arguments. On remand, the family court must determine what is "just and reasonable under the relative circumstances of the respective parties" (§ 2032, subd. (a)), taking into consideration the section 4320 factors. (§ 2032, subd. (b).) We do not suggest that on remand the family court must order Steven to pay any or all of the fees Annemarie has requested.
DISPOSITION
The order appealed from is reversed and the matter is remanded to the family court for further proceedings consistent with this opinion. Annemarie's request for judicial notice is denied. The parties shall bear their own costs on appeal.
/s/_________
Miller, J. We concur: /s/_________
Kline, P.J. /s/_________
Stewart, J.