Before ordering husband to pay wife's attorney and accountant fees, trial court must consider ability to pay and reasonableness of fees.
Cite as
1999 DJDAR 10699Published
Nov. 30, 1999Filing Date
Oct. 13, 1999Summary
The C.A. 2nd has determined, in the published portion of its opinion, that the trial court abused its discretion in ordering a husband to pay his wife's professional fees, in large installments, without considering his ability to pay or the reasonableness of the fees.
Richard Keech, a physician, was married for six years to Kristan Keech, a medical bookkeeper. The couple separated in 1992, when their children were six and two years old. While their divorce was pending, Richard filed an order to show cause to determine child and spousal support. Kristan requested that Richard pay her attorney and accountant fees. Richard's monthly gross income was $5,405 and his rent was $700 per month. Kristan claimed she earned only $500 per month. Kristan introduced some of her accountant's bills with an authenticating declaration from the accountant. To support the request for attorney fees, however, Kristan introduced only the statement in her declaration: " 'By the most recent bill I received . . . I owe approximately $31,000 to [counsel].' " Kristan obtained new counsel three months before the hearing on the order to show cause. At the hearing, Kristan's new attorney stated that she had incurred approximately $35,000 in fees. The trial court ordered Richard to pay, while the case was pending, child support of $1,468 per month, temporary spousal support of $800 per month, 90 percent of all uncovered medical expenses for the children, 50 percent of Kristan's uncovered medical expenses, $3,200 of her accountant fees, $25,000 of her attorney fees, as well as continuing monthly contributions to her professional fees.
The C.A. 2nd affirmed in part and reversed and remanded in part. Family Code Section 2030(a) provides that awards of attorney fees while a case is pending may be ordered after the trial court first determines that the spouse is able to pay. The trial court must consider both parties' needs and incomes, to make sure each " 'has access to legal representation.' " It may then order a party " 'to pay the amount reasonably necessary for attorney's fees and for the cost of maintaining or defending the proceeding.' " The trial court may make the award only " 'where the making of the award, and the amount of the award, are just and reasonable.' " After the monthly obligations for family support and rent, Richard would have only $1,093 per month. Moreover, there was no showing that the attorney fees sought were actually incurred, except for her unsupported statement, and no showing that they were "reasonably necessary." The trial court must be informed of the " 'extent and nature of the services rendered' " to determine their " 'reasonable value.' " To order Richard to pay them without looking into their reasonableness was an abuse of discretion. In the unpublished part of the opinion, the spousal support award was affirmed. In determining the amount of temporary spousal support, the trial court was not required to consider any factors other than the parties' needs and Richard's ability to pay. Given the disparity in their incomes, the amount was reasonable and furthered the goal of maintaining the status quo during the litigation.
— Brian Cardile
In re the Marriage of KRISTAN KEECH
and RICHARD C. KEECH.
KRISTAN KEECH,
Respondent,
v.
RICHARD C. KEECH,
Appellant.
No. B114366
(Super. Ct. No. BD 087439)
California Court of Appeal
Second Appellate District
Division Two
Filed October 14, 1999
CERTIFIED FOR PARTIAL PUBLICATION*
APPEAL from a order of the Superior Court of the County of Los Angeles,
James D. Endman, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Reversed in part and remanded.
Hindin & Abel, Robert Marc Hindin and Bruce David Abel for Appellant.
Friedman & Friedman, Ira M. Friedman and Gail S. Green for Respondent.
In a dissolution action between appellant Richard C. Keech ("husband") and Kristan Keech ("wife"), husband appeals from an order that determined, pendente lite, the amount of monthly spousal support and child support for which husband would be responsible, and the amount of wife's attorney and accountant's fees and costs husband was required to pay.
Husband's primary contention on appeal is that the court abused its discretion in ordering husband to pay $3,200 of wife's accountant's fees at the rate of $1000 per month for the first three months, and $25,000 of wife's attorney fees at a rate of $500 per month thereafter. According to husband the required monthly payments of wife's professional fees, in conjunction with the amount of child and spousal support he was ordered to pay, left him insufficient funds upon which to live. Husband further complains about the manner in which the court determined that he should pay those fees and costs. In the published portion of this opinion, we conclude that the manner in which the trial court ordered husband to pay a "contributive share" of wife's attorney fees and costs under Family Code section 2030, et seq. 1 was an abuse of discretion. Accordingly, we reverse that portion of the order which pertains to wife's attorney fees and costs, and remand for further proceedings consistent with this opinion.
Husband also asserts that the court, in making its order concerning temporary spousal support, "failed to take into account" wife's earning potential, the rental income she was receiving, and the short length of time the parties were married. In the unpublished portion of this opinion, we affirm the trial court's determination with regard to temporary spousal support.
I. FACTUAL AND PROCEDURAL BACKGROUND Husband and wife were married on December 27, 1986 and separated less than six years later in August 1992. Wife petitioned for dissolution later that same month. Husband is and was a physician; wife's employment, as a "medical bookkeeper," has been minimal and sporadic. The couple have two children, born in 1986 and 1990.
For undisclosed reasons the dissolution action did not proceed to judgment. In June of 1996, asserting he should not be required to, and could not in any event, further perform under a prior stipulation, husband filed an Order to Show Cause ("OSC") seeking, among other things, a determination of child support and spousal support. In July 1996 wife responded to the OSC, consenting to "guideline" child and spousal support, but asking that husband be ordered to pay her attorney and accountant fees.
Over the next several months the parties wrangled over wife's professed need for continuances and discovery, and filed multiple declarations of accountants and counsel in support of each party's arguments concerning the amounts of income and custody time properly attributable to husband and wife for purposes of guideline support calculations.
Wife contended her income was limited to approximately $500 per month. Husband's accountant eventually opined that husband's "gross cash flow available for support" was $5,405 per month. Husband argued that additional income should be imputed to wife on various grounds. Wife, on the other hand, disputed husband's reduced calculations of income, asserting that he had "hidden" sources of income and had artificially depressed the earnings of his medical corporation. The parties also disagreed over the percentage of time husband had custody of the children.
In support of her request that husband be responsible for payment of her accountant's and attorney fees, wife submitted a portion of the bills of her accountant, authenticated by the accountant's declaration. Wife did not, however, submit her attorneys' bills, or any declaration by her counsel of the amount of time spent, the nature of the work done, or the rate charged. Wife's only "evidence" in this regard was her declaration that: "By the most recent bill I received . . . I owe approximately $31,000 to [counsel]." 2
Husband contested wife's entitlement to professional fees, noting that there was no equity in the family home, and no other source of funds from which the fees could be paid. Husband's declaration filed for the April 1997 OSC hearing recited that husband then owed his own attorney over $18,000; his January 1997 "income and expense" declaration had stated that at that time husband had incurred attorney fees of over $25,000. Husband also argued that wife's attorney fees were unreasonable and excessive for reasons including that wife had changed attorneys midstream. 3 Husband asserted that the majority of the fees charged by wife's new counsel had been incurred in attempting to obtain the file from the predecessor attorney, reviewing the file, and seeking the "eighth and ninth continuances" of the OSC. Husband's counsel further argued: "Mr. Keech has incurred a total of approximately $25,000 in fees and costs with approximately half of that having been paid in drips and drabs over the entirety of the last year during which time I had represented [husband]. [¶] Certainly it would be a little farfetched to say that in three months or four months of representation [by wife's new counsel] that $35,000 has incurred [sic] in attorneys' fees to represent [wife] when [wife's] own statements before this court, a majority of that is spent in attempting to retrieve and reviewing files from previous counsel. Certainly [husband] should not be responsible to have to pay any fees and costs associated with retrieving files and/or reviewing files from predecessor counsel because [wife] can hire and fire counsel whenever she so pleases and that should not impose an obligation on [husband] to have to pay for that." (Emphasis added.)
At the April 28, 1997 OSC hearing, the court announced its determination that husband had monthly gross wages, salary, and non-taxable income of $5,405, and that wife had monthly non-taxable income of $500. Combining those figures with the percentage of time husband was found to have had custody of the children (10%), the court determined (with the aid of the Dissomaster program) that husband would be required to pay, pendente lite, $1,468 per month in guideline child support and $800 per month in guideline spousal support. As "additional" child and spousal support husband was ordered to pay 90% of all uncovered medical expenses for the children, and 50% of all uncovered medical expenses of wife.
The court also determined that husband would be required to pay, as his "contributive share" of wife's accountant's fees, the sum of $3,200, at the rate of $1,000 per month commencing May 1, 1997, and a $25,000 "contributive share" of wife's attorney fees and costs, payable at $1,000 per month commencing August 1, 1997.
Although the court had not yet filed an order embracing its April 28 findings, on May 8 husband filed a motion for reconsideration. Husband argued that the award of attorney fees was not supported by the evidence, and that the monthly payments of those fees ordered by the court, on top of the amounts ordered for child and spousal support, were such that husband was left with insufficient funds on which to live. In a declaration in support of his motion for reconsideration, husband attacked "the outlandish professional fees ordered which [were] solely based upon the oral assertion of more than $35,000 having been billed within a three month period of representation and with no backup or bills or even the same in writing to substantiate. As indicated by the court file, those fees were not and could not have been properly billed for the advancement of this case. . . . I cannot afford to pay all of my own attorney's fees and costs as well as 80% of [wife's] attorney's fees and costs. The same is grossly unfair given that [wife] has [as a result of the support order] more than 70% of the income."
On June 3, 1997, the court denied husband's motion for reconsideration, although it did amend its proposed order so as to reduce husband's future payments of wife's attorney fees (not accountant's fees) to $500 per month starting August 1, 1997. The court's order, filed the same day, also provided that in the event any payment of the professional fees was more than 15 days late, the entire unpaid balance would then become due and payable.
II. DISCUSSION
[This Part Is Not Certified for Publication]
A. Appealability
Pendente lite support and attorney fee orders such as those at issue in this case are appealable orders. (In re Marriage of Skelley (1976) 18 Cal.3d 365, 368-369.) "[W]e [have] recognized that an order for payment of spousal support and attorney's fees possesses the essential elements of a final judgment and is therefore appealable. . . . An order for support is operative from the moment of pronouncement. And a final judgment excluding future support does not preclude recovery of all money due under a prior temporary support order. [Citations.] In addition, the retroactive effect of any modification or revocation of support is limited to the date of filing the notice of motion or order to show cause, or any date subsequent thereto. [Citation.]" (Ibid.)
B. Mootness Issues
Noting that the appeal was taken from a pendente lite order issued in June of 1997, and that trial was then set for August 1997, by letter we invited the parties to address whether any subsequent actions, orders or judgments modified directly or indirectly the order from which the appeal was taken, and whether such developments could properly be considered by this court.
Wife filed a letter brief on May 21, 1999 asserting that the appeal was "moot" due to a "Stipulation to Further Judgment on Reserved Issues" and order thereon, filed in the lower court on April 7, 1999. Husband argued in response that the stipulation and order did not moot the appeal, and that: "The settlement in the underlying case does not deal with the issues before the court." On July 13, 1999, wife finally filed in this court a "motion to augment" the record to include a certified copy of the stipulation.
Procedural improprieties in requesting "augmentation" of the record to include this document (filed nearly two years after the order which is the subject of the appeal) to one side, our review of the document does not establish that it renders the appeal moot. The stipulation contains a provision which specifically states: "Each party waives attorney fee [sic] against each other through this date except as to any fees previously ordered, specifically to Tina Schuchman [wife's counsel at the time of the attorney fee order at issue in this appeal.]" (Emphasis added.) While the stipulation does state that wife: "waives reimbursement claim on support arrearages to 4-7-99" and that "Each party waives all and any reimbursement claims against the other for any reason . . . ," the document also states that "Each party irrevocably waives spousal support from the other effective 4-7-99 . . . ." (Emphasis added.) From this document it does not appear that husband's appeal, either in regard to its challenge to the temporary spousal support award or its challenge to the pendente lite award of attorney fees, has been rendered moot.
C. The Trial Court Did Not Abuse its Discretion In Ordering Temporary Spousal Support
Section 3600 provides, in pertinent part: "During the pendency of any proceeding for dissolution of marriage . . . the court may order (1) the husband or wife to pay any amount that is necessary for the support of the wife or husband . . . ." The amount of temporary spousal support awarded by a court is a matter of discretion and will not be reversed absent a "clear showing" of abuse of discretion. (In re Marriage of Dick (1993) 15 Cal.App.4th 144, 165.)
The order from which the appeal is taken recites the court's findings that husband had monthly gross wages and salary of $4,935 and monthly non-taxable income of $470, for a gross total of $5,405, the precise income figure submitted by husband's accountant. The court found wife had non-taxable income of $500 per month. Husband was found to have 10 percent "visitation time." Based on those figures the court determined, with the aid of the Dissomaster program, that husband would be required to pay, pendente lite, $1,468 per month in "guideline" child support, ($918 for the younger child and $550 for the elder) retroactive to January 1, 1997 and continuing until further order of the court. The court further determined that husband would be required to pay $800 per month in "guideline" temporary spousal support, retroactive to January 1, 1997 and continuing until further order. As "additional child support," husband was ordered to pay 90% of all uncovered medical expenses of the minor children. As "additional spousal support," husband was ordered to pay 50% of all uncovered medical expenses of wife.
Husband argues on appeal that the trial court abused its discretion in awarding pendente lite spousal support because the court "did not consider" wife's earning potential or rental income, and did not consider the short length of the marriage. Neither the record nor the pertinent statutes and case authority support husband's position.
The court found that wife's income was limited to approximately $500 per month she received as "Indian reparations." The record establishes that the court did in fact consider husband's contentions that wife could have been earning some sum as some type of medical bookkeeper. Wife vigorously disputed husband's attempt to attribute income to her, introducing evidence of a sparse work history, minimal qualifications, and pointing out that she had been terminated from her last job as a bookkeeper in a medical office while still in her "probationary period." The record reflects wife's evidence that she had attempted to find employment but was not then working, and had been hampered in her efforts to find work by her limited skills, virtually exclusive custody of the two children, various medical conditions, and by husband's abusive conduct. From this record we cannot say that the court abused its discretion in determining, pendente lite, not to impute income to wife above that actually received.
The same is true with regard to "rental income." Wife presented evidence that although she had received some rent in the past, she was not in fact receiving cash from another occupant of the family home, but instead that the individual in question occasionally performed maintenance and contributed to utilities. Husband cites no authority for the proposition that rental income should have been imputed to wife for purposes of computing pendente lite guideline spousal support. On this record we perceive no abuse of discretion by the trial court in declining to do so.
Husband also argues that spousal support should have been terminated altogether in light of the relative brevity of the marriage, and the length of time husband had been making payments under the original stipulation and order in the domestic violence action. Husband acknowledged below that the payments which he now argues were "de facto" spousal support were not denominated as such in the original stipulation and order under which the parties had operated for over four years by the time of the hearing on the OSC. The trial court noted that the case was still at the "pendente lite" stage, and asked husband for authority supporting his insistence that temporary support be terminated prior to trial, which at that time was set to take place three months later. Husband presented no such authority, and presents none on appeal.
Citing section 4320, however, husband argues that the trial court abused its discretion because in determining temporary spousal support the court "must" consider: "among other factors, the ability to pay of the supporting party, the employability of the supported party, and the duration of the marriage." Husband is incorrect. As the Law Revision Commission Comment to section 4320 makes clear: "[T]he court is only required to consider these factors when making an order for permanent spousal support." (Emphasis added.)
Reported decisions draw the same distinction: "An award of permanent spousal support made pursuant to [former] Civil Code section 4801 [now Family Code section 4320] requires the court to make specific factual findings. The same is not required for an award of pendente lite spousal support. The trial court has discretion to award spousal support pending a final judgment in the dissolution proceeding. [Citation.] The amount of support lies within the trial court's sole discretion based on the needs of the parties and their ability to pay. [Citations.]" (In re Marriage of Czapar (1991) 232 Cal.App.3d 1308, 1316.)
"The purpose of temporary spousal support is to maintain the status quo as much as possible pending trial. (In re Marriage of Olson (1993) 14 Cal.App.4th 1, 5-6, fn. 3 []; In re Marriage of Winter (1992) 7 Cal.App.4th 1926, 1932 [] ['temporary spousal support "is utilized to maintain the living conditions and standards of the parties in as close to the status quo position as possible pending trial and the division of their assets and obligations"'].) By contrast, permanent spousal support is supposed to reflect a complex variety of factors established by statute and legislatively committed to the trial judge's discretion, including several factors which tend to favor reduced support, such as the 'goal' that the supported spouse should become self-supporting within a reasonable period of time. [Citation.] [¶] Furthermore, not only are the legal bases for the two kinds of support different, there is also a disparity in practice. Because dissolution of marriage is, in the mathematical sense, a negative-sum game where each party will not have the same access to the whole of the marital property he or she had during the marriage, permanent support orders will usually be lower than temporary orders." (In re Marriage of Schulze (1997) 60 Cal.App.4th 519, 525.)
"Unlike 'permanent' spousal support orders which -- both in amount and duration -- must be based on a consideration and weighing of several codified factors [Fam. Code § 4320], temporary spousal support may be ordered in 'any amount' based on the moving party's need and the other party's ability to pay. [Citations.]" (Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 1999) § 5:152, p. 5-46-5-47.) "Most appropriately, trial courts look to the parties' accustomed marital lifestyle as the benchmark for a temporary spousal support award. This approach facilitates the purpose of pendente lite spousal support -- maintaining the parties' living conditions and standards in as close to their preseparation 'status quo position' as possible pending trial . . . . [Citations.]" (Id. at § 5:154, p. 5-47.) "In fixing a temporary spousal support amount, trial courts are not restricted by any set of statutory guidelines. Subject to the general yardstick of 'need' and 'ability to pay,' the amount of the award lies within the trial court's sound discretion and is reversible on appeal only on a showing of 'clear abuse of discretion.'" (Id. at § 5:153, p. 5-47.) "Because temporary spousal support serves an entirely different purpose than 'permanent' spousal support awarded by judgment after trial, the [section] 4320 factors are not controlling on the question of temporary spousal support awards. [Citation.]" (Id. at § 5:156, p. 5-48.)
In this case there was ample evidence that during the time in question wife had a significantly reduced income of approximately $500 a month (which stood in stark contrast to the standard of living enjoyed by the parties during the marriage), and that husband, a physician, had the ability to pay temporary spousal support of $800 per month. Indeed, husband specifically asked that the court calculate guideline child and spousal support using the $5,405 income figure supplied by husband's second accountant. 4 That is precisely what the court did, as revealed by the court's comments at the hearing, the Dissomaster printout the court supplied to counsel, and the court's order. The basic difference between that which husband asked for and that which he received is merely that the court found a custodial percentage for husband of 10% rather than 20% (a finding husband does not challenge on appeal), and that the court did not impute income to wife above the approximately $500 in monthly reparations.
In light of the purpose of pendente lite spousal support to maintain the status quo, the court's manifest consideration of husband's evidence and rejection of his argument in support of a lower amount of spousal support or outright termination of such support, and the broad discretion vested in the court in making temporary spousal support determinations, we find no abuse of discretion in the court's award of temporary spousal support in the amount of $800 per month.
[End of Part Not Certified for Publication]
D. The Trial Court Abused its Discretion in Awarding Attorney Fees and Costs.
During the pendency of a dissolution action, a court may order that one party pay some or all of the other party's legal fees and costs. (§ 2030, et seq.) "'California's public policy in favor of 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.'" (Droeger v. Friedman, Sloan & Ross (1991) 54 Cal.3d 26, 41, fn. 12.) "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.]" (In re Marriage of Cueva (1978) 86 Cal.App.3d 290, 296.)
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]." (In re Marriage of Hatch (1985) 169 Cal.App.3d 1213, 1219.) The trial court's discretion in this area is thus limited by the statutes which enable the exercise of that discretion.
Under section 2030, subdivision (a): "During the pendency of a proceeding for dissolution of marriage . . . , the court may, upon (1) determining an ability to pay and (2) consideration of the respective needs and incomes of the parties in order to ensure that each party has access to legal representation to preserve all of the party's rights, order any party . . . to pay the amount reasonably necessary for attorney's fees and for the cost of maintaining or defending the proceeding." (Emphasis added.) Under section 2032: "(a) The court may make an award of attorney fees and costs under Section 2030 . . . where the making of the award, and the amount of the award, are just and reasonable under the relative circumstances of the respective parties. (b) In determining what is just and reasonable under the relative circumstances, the court shall take into consideration the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the party's case adequately, taking into consideration, to the extent relevant, the circumstances of the respective parties described in Section 4320 [the factors for determination of "permanent spousal support"]. . . . 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." (Emphasis added.)
The trial court's decision here does not reflect consideration of husband's ability to pay wife's professional fees at the rate of $1000 per month (or indeed at $500 per month), does not reflect consideration of the respective litigation needs of the parties, and does not reflect consideration of whether the fees allegedly incurred were reasonably necessary. Accordingly we conclude the court abused its discretion with respect to the fee award.
The court found that husband's monthly income from all sources was $5,405. It then ordered husband to pay $1,468 per month in child support, and $800 per month in spousal support. Subtracting the required monthly payments of child and spousal support, and husband's monthly tax liability of $1,344 as indicated by the same Dissomaster report utilized by the court to arrive at the support figures, left husband $1,793 per month. Husband had previously declared that his monthly rent for a one bedroom apartment was $700, and there is no indication in the record that the court rejected husband's need to pay that moderate amount. Thus, after payment of child and spousal support, taxes, and rent, husband had $1093 a month remaining. From this, the court ordered husband to pay wife's previously incurred accountant fees at the rate of $1000 per month, leaving only $93.00 a month for husband to pay all of life's other expenses. On reconsideration, stating that it recognized the financial burden of the fee award, the court lowered the prospective payments for attorney fees to $500 per month.
Considering that the court also ordered husband to pay 90% of all uncovered medical expenses for the children, and 50% of all uncovered medical expenses for wife, the undisputed evidence of a lack of equity in the former marital residence, and the lack of any finding concerning any other source of payment, we can discern no justification for ordering husband to pay wife's accountant's fees at the rate of $1000 per month. Leaving husband $93.00 per month after payment of his court-ordered obligations and rent virtually speaks for itself. As to the prospective $500 monthly payments of wife's attorney fees, while it could perhaps be argued that leaving husband $593 a month after court-ordered obligations, taxes and rent might be equitable under the parties' strained circumstances, the record does not sufficiently reflect, for example, any consideration of the husband's needs to pay his own outstanding legal fees during that period. Yet the court in making the order was required to "take into consideration the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the party's case adequately." (§ 2032, subd. (b).)
Wife argues that the record "demonstrates [husband] had the cash flow to support the order." We disagree. The court's express findings of husband's monthly gross income left little room for payment of attorney fees and costs after payment of the monthly support obligation. Even if, due to the income disparity between the parties and husband's presumably greater earning capacity, we were able to ascertain from the record that the trial court was within its discretion in ordering husband to pay $25,000 of wife's attorney fees and $3200 of the accountant's fees, this record would not support ordering husband to pay such sizeable monthly installments. The situation is somewhat similar to that in In re Marriage of Schulze, supra, 60 Cal.App.4th 519, where the reviewing court, although it found the total amount of fees husband was ordered to pay was appropriate, also found that the court erred in requiring the payment to be made "forthwith": "The family support order left Michael with less than $2,000 a month in actual cash. It is clear the trial judge presumed Michael would be able to obtain the $7,500 from his parents. This presumption was error. . . . Nothing showed that Michael had, or was reasonably likely to have, the 'ability to pay' the $7,500 forthwith except the notion that Michael's parents' generosity could be taken for granted. In light of the absence of any liquid assets, it was unreasonable not to have allowed Michael to pay the $7,500 attorney fee order in manageable installments, consistent with the income he had left after he paid the family support order." (Marriage of Schulze, supra, 60 Cal.App.4th at pp. 531-532, emphasis added.)
Wife points out that: "'[T]he cases have frequently and uniformly held that the court may base its decision on the [paying spouse's] ability to earn, rather than his [or her] current earnings . . . ' for the simple reason that in cases such as this, current earnings give a grossly distorted view of the paying spouse's financial ability. [Citation.]" (In re Marriage of Sullivan (1984) 37 Cal.3d 762, 769.) In this case there is no indication the trial court based its decision on husband's "ability" to earn. More significantly, perhaps, there is no indication the trial court considered the proper factors in determining whether the fees awarded were reasonable and necessary in the first place.
This case involves a relatively short marriage, with no substantial marital estate, and no child custody dispute. According to the court's findings, wife had almost no income; and husband was earning approximately $65,000 per year. Despite the relative dearth of issues and of assets, the parties allegedly incurred at least $60,000 in attorney fees; $35,000 of which was allegedly incurred by wife over the course of roughly three months immediately prior to the hearing on the OSC. Yet the court ordered husband to pay $25,000 of wife's fees on nothing more than wife's secondhand comment (albeit in a declaration) about what her latest "bill" stated, and on wife's counsel's unsworn representation that she was owed "approximately $35,000." 5
Assuming for purposes of argument that fees of that magnitude were actually incurred, still the court made no inquiry into whether the fees were, in the words of section 2030, "reasonably necessary." The court made no evaluation of the legal work done on wife's behalf despite husband's objection that, based on wife's own prior filings and requests for continuance of the OSC, it appeared much of the time was spent seeking to get file materials from prior counsel, "reinventing the wheel," or requesting additional continuances. Without ascertaining whether or at what hourly rate the work for which reimbursement was sought was actually done, much less that the work was "reasonably necessary" in light of the issues in the case, the trial court could not properly find that imposing upon husband approximately 70% of wife's legal bill was "just and reasonable under the relative circumstances of the respective parties" as required by section 2032.
Acknowledging the fact that it appears husband's own fees were represented to have approximated or exceeded $25,000 does little more than allow informed speculation that the court decided to require husband to pay at least as much for wife's attorney fees as he did for his own. That is not the standard by which the court was to determine the amount of the award. "The major factors to be considered by a court in fixing a reasonable attorney's fee [include] 'the nature of the litigation, its difficulty, the amount involved, the skill required and the skill employed in handling the litigation, the attention given, the success of the attorney's efforts, his learning, his age, and his experience in the particular type of work demanded [citation]; the intricacies and importance of the litigation, the labor and the necessity for skilled legal training and ability in trying the cause, and the time consumed. [Citations.]' [Citations.]" (In re Marriage of Cueva, supra, 86 Cal.App.3d at p. 296.) The record reflects no consideration of such issues.
Wife cites authority for the proposition that the court can determine the reasonable value of services based upon its own expertise. Yet, as pointed out by the court in In re Marriage of Cueva, supra, 86 Cal.App.3d at p. 300, such statements are "overbroad and incorrect." "Correctly stated, the rule is that when the trial court is informed of the extent and nature of the services rendered, it may rely on its own experience and knowledge in determining their reasonable value." (Ibid., emphasis added.) Moreover, "'The exercise of sound discretion by the trial court in the matter of attorney's fees includes also judicial evaluation of whether counsel's skill and effort were wisely devoted to the expeditious disposition of the case.' [Citation.]" (In re Marriage of Huntington (1992) 10 Cal.App.4th 1513, 1524.)
The court here was not apprised of the nature and extent of the services rendered, so it could not determine their reasonable value based upon its own expertise. Contrary to wife's assertion, the two-volume clerk's transcript in this case does not in and of itself reflect $35,000 worth of legal work in the approximately three- to four-month period since wife's "new" counsel first appeared in the action. The record also does not reflect "judicial evaluation of whether counsel's skill and effort were wisely devoted to the expeditious disposition of the case." (Huntington, supra, 10 Cal.App.4th at p. 1524.)
It was an abuse of discretion to order husband to pay wife's attorney fees without making any inquiry into the reasonableness of those fees. Neither the attorney for a party to a dissolution action nor the attorney's client is entitled to recover, from the opposing spouse, a contributive share of whatever fees the attorney chooses to charge. Although the attorney's right to recover from the attorney's own client may be limited only by the fee agreement and ethical limitations, there are additional limitations on recovery of fees from the opposing spouse -- including not only that the opposing spouse has the ability to pay, but also that the fees be "reasonably necessary," and that payment of the fees by the opposing spouse is "just and reasonable" under the relative circumstances of the respective parties. (§§ 2030, 2032.)
The record on appeal does not itself justify fees of this magnitude during the time frame in question. Although in this posture we do not determine such issues, the record on appeal as presently constituted is consistent with a relatively simple dissolution action, to which counsel either claims to have devoted an inordinate amount of time, or to have charged excessive rates, or a combination of the two, resulting in fee claims which at least facially appear out of proportion to the issues presented. Although there may be some legitimate reason for such large fees, it is not reflected in this record. Approval of claims of this type, without prior judicial scrutiny followed by appropriate findings and modification where necessary, is an abdication of the judicial function and an abuse of discretion. Accordingly, the order insofar as the payment of attorney fees and costs must be reversed and remanded to the trial court for the determinations required under sections 2030 and 2032.
III. DISPOSITION The order insofar as it directs payment of a contributive share of wife's attorney fees and accountant's fees, and insofar as it directs payment of that total in prescribed monthly amounts, is reversed and remanded to the trial court for the determinations required under Family Code sections 2030 and 2032. In all other respects the order is affirmed. Each party to bear their own costs on appeal.
We concur:
NOTT, Acting P.J.
MALLANO, J.*
* Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of parts, IIA, IIB and IIC.
1 All further statutory references are to the Family Code unless otherwise indicated.
2 The only other possible indication of the amount of wife's attorney fees came during the hearing on the OSC, when wife's attorney stated: "Issue of attorneys' fees -- I have not gotten paid anything -- anything by Dr. Keech. My fees to date are approximately $35,000. If I do not get a contribution I will have to get off of the case and [wife] will be left without legal representation. . . . THE COURT: Have you been paid anything? [Wife's counsel]: I have, as reflected on the income and expense declaration, gotten a $2,500 retainer in this case. THE COURT: And how much has been incurred to date by you? [Wife's counsel]: Approximately $35,000. . . . "
3 As far as the record on appeal shows, the attorney in question had not appeared in the action prior to January 21, 1997, roughly three months before the hearing on the OSC.
4 Indeed only a few months earlier, husband had filed declarations representing that he had a much higher income. Husband filed an Income and Expense Declaration along with his June 1996 OSC, reporting net monthly disposable income of over $6900 per month and expenses of over $3800 per month, and attorney fees of nearly $6700. In July of 1996 husband submitted the declaration of his accountant, which concluded that husband's "average monthly cash flow" available for support for the preceding six months was $8,893. On January 3, 1997, husband filed another income and expense declaration. This time he declared net monthly disposable income of $7242.98, current net monthly disposable income of over $6900, and total monthly expenses of over $7800 per month. However, later that same month husband submitted the declaration of a different accountant, reciting that his monthly cash flow available for support was only $5,042, eventually revised slightly upward to $5,405.
5 Wife did present a portion of the accountant's bills, from which it might be argued we should infer in support of the order that the court found those fees reasonably necessary, and from the parties relative disparity in incomes we might also infer that requiring the husband to pay the vast majority of those bills might be a proper exercise of discretion. Yet the accountant fees husband was ordered to pay exceeded the balance reflected on the bills. In any event, even as to documented accountant's fees, as set forth above the court's order that husband pay those fees in installments of $1000 per month would still require reversal and remand.
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
APPEAL from a order of the Superior Court of the County of Los Angeles,
James D. Endman, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Reversed in part and remanded.
Hindin & Abel, Robert Marc Hindin and Bruce David Abel for Appellant.
Friedman & Friedman, Ira M. Friedman and Gail S. Green for Respondent.
In a dissolution action between appellant Richard C. Keech ("husband") and Kristan Keech ("wife"), husband appeals from an order that determined, pendente lite, the amount of monthly spousal support and child support for which husband would be responsible, and the amount of wife's attorney and accountant's fees and costs husband was required to pay.
Husband's primary contention on appeal is that the court abused its discretion in ordering husband to pay $3,200 of wife's accountant's fees at the rate of $1000 per month for the first three months, and $25,000 of wife's attorney fees at a rate of $500 per month thereafter. According to husband the required monthly payments of wife's professional fees, in conjunction with the amount of child and spousal support he was ordered to pay, left him insufficient funds upon which to live. Husband further complains about the manner in which the court determined that he should pay those fees and costs. In the published portion of this opinion, we conclude that the manner in which the trial court ordered husband to pay a "contributive share" of wife's attorney fees and costs under Family Code section 2030, et seq. 1 was an abuse of discretion. Accordingly, we reverse that portion of the order which pertains to wife's attorney fees and costs, and remand for further proceedings consistent with this opinion.
Husband also asserts that the court, in making its order concerning temporary spousal support, "failed to take into account" wife's earning potential, the rental income she was receiving, and the short length of time the parties were married. In the unpublished portion of this opinion, we affirm the trial court's determination with regard to temporary spousal support.
I. FACTUAL AND PROCEDURAL BACKGROUND Husband and wife were married on December 27, 1986 and separated less than six years later in August 1992. Wife petitioned for dissolution later that same month. Husband is and was a physician; wife's employment, as a "medical bookkeeper," has been minimal and sporadic. The couple have two children, born in 1986 and 1990.
For undisclosed reasons the dissolution action did not proceed to judgment. In June of 1996, asserting he should not be required to, and could not in any event, further perform under a prior stipulation, husband filed an Order to Show Cause ("OSC") seeking, among other things, a determination of child support and spousal support. In July 1996 wife responded to the OSC, consenting to "guideline" child and spousal support, but asking that husband be ordered to pay her attorney and accountant fees.
Over the next several months the parties wrangled over wife's professed need for continuances and discovery, and filed multiple declarations of accountants and counsel in support of each party's arguments concerning the amounts of income and custody time properly attributable to husband and wife for purposes of guideline support calculations.
Wife contended her income was limited to approximately $500 per month. Husband's accountant eventually opined that husband's "gross cash flow available for support" was $5,405 per month. Husband argued that additional income should be imputed to wife on various grounds. Wife, on the other hand, disputed husband's reduced calculations of income, asserting that he had "hidden" sources of income and had artificially depressed the earnings of his medical corporation. The parties also disagreed over the percentage of time husband had custody of the children.
In support of her request that husband be responsible for payment of her accountant's and attorney fees, wife submitted a portion of the bills of her accountant, authenticated by the accountant's declaration. Wife did not, however, submit her attorneys' bills, or any declaration by her counsel of the amount of time spent, the nature of the work done, or the rate charged. Wife's only "evidence" in this regard was her declaration that: "By the most recent bill I received . . . I owe approximately $31,000 to [counsel]." 2
Husband contested wife's entitlement to professional fees, noting that there was no equity in the family home, and no other source of funds from which the fees could be paid. Husband's declaration filed for the April 1997 OSC hearing recited that husband then owed his own attorney over $18,000; his January 1997 "income and expense" declaration had stated that at that time husband had incurred attorney fees of over $25,000. Husband also argued that wife's attorney fees were unreasonable and excessive for reasons including that wife had changed attorneys midstream. 3 Husband asserted that the majority of the fees charged by wife's new counsel had been incurred in attempting to obtain the file from the predecessor attorney, reviewing the file, and seeking the "eighth and ninth continuances" of the OSC. Husband's counsel further argued: "Mr. Keech has incurred a total of approximately $25,000 in fees and costs with approximately half of that having been paid in drips and drabs over the entirety of the last year during which time I had represented [husband]. [¶] Certainly it would be a little farfetched to say that in three months or four months of representation [by wife's new counsel] that $35,000 has incurred [sic] in attorneys' fees to represent [wife] when [wife's] own statements before this court, a majority of that is spent in attempting to retrieve and reviewing files from previous counsel. Certainly [husband] should not be responsible to have to pay any fees and costs associated with retrieving files and/or reviewing files from predecessor counsel because [wife] can hire and fire counsel whenever she so pleases and that should not impose an obligation on [husband] to have to pay for that." (Emphasis added.)
At the April 28, 1997 OSC hearing, the court announced its determination that husband had monthly gross wages, salary, and non-taxable income of $5,405, and that wife had monthly non-taxable income of $500. Combining those figures with the percentage of time husband was found to have had custody of the children (10%), the court determined (with the aid of the Dissomaster program) that husband would be required to pay, pendente lite, $1,468 per month in guideline child support and $800 per month in guideline spousal support. As "additional" child and spousal support husband was ordered to pay 90% of all uncovered medical expenses for the children, and 50% of all uncovered medical expenses of wife.
The court also determined that husband would be required to pay, as his "contributive share" of wife's accountant's fees, the sum of $3,200, at the rate of $1,000 per month commencing May 1, 1997, and a $25,000 "contributive share" of wife's attorney fees and costs, payable at $1,000 per month commencing August 1, 1997.
Although the court had not yet filed an order embracing its April 28 findings, on May 8 husband filed a motion for reconsideration. Husband argued that the award of attorney fees was not supported by the evidence, and that the monthly payments of those fees ordered by the court, on top of the amounts ordered for child and spousal support, were such that husband was left with insufficient funds on which to live. In a declaration in support of his motion for reconsideration, husband attacked "the outlandish professional fees ordered which [were] solely based upon the oral assertion of more than $35,000 having been billed within a three month period of representation and with no backup or bills or even the same in writing to substantiate. As indicated by the court file, those fees were not and could not have been properly billed for the advancement of this case. . . . I cannot afford to pay all of my own attorney's fees and costs as well as 80% of [wife's] attorney's fees and costs. The same is grossly unfair given that [wife] has [as a result of the support order] more than 70% of the income."
On June 3, 1997, the court denied husband's motion for reconsideration, although it did amend its proposed order so as to reduce husband's future payments of wife's attorney fees (not accountant's fees) to $500 per month starting August 1, 1997. The court's order, filed the same day, also provided that in the event any payment of the professional fees was more than 15 days late, the entire unpaid balance would then become due and payable.
II. DISCUSSION
[This Part Is Not Certified for Publication]
A. Appealability
Pendente lite support and attorney fee orders such as those at issue in this case are appealable orders. (In re Marriage of Skelley (1976) 18 Cal.3d 365, 368-369.) "[W]e [have] recognized that an order for payment of spousal support and attorney's fees possesses the essential elements of a final judgment and is therefore appealable. . . . An order for support is operative from the moment of pronouncement. And a final judgment excluding future support does not preclude recovery of all money due under a prior temporary support order. [Citations.] In addition, the retroactive effect of any modification or revocation of support is limited to the date of filing the notice of motion or order to show cause, or any date subsequent thereto. [Citation.]" (Ibid.)
B. Mootness Issues
Noting that the appeal was taken from a pendente lite order issued in June of 1997, and that trial was then set for August 1997, by letter we invited the parties to address whether any subsequent actions, orders or judgments modified directly or indirectly the order from which the appeal was taken, and whether such developments could properly be considered by this court.
Wife filed a letter brief on May 21, 1999 asserting that the appeal was "moot" due to a "Stipulation to Further Judgment on Reserved Issues" and order thereon, filed in the lower court on April 7, 1999. Husband argued in response that the stipulation and order did not moot the appeal, and that: "The settlement in the underlying case does not deal with the issues before the court." On July 13, 1999, wife finally filed in this court a "motion to augment" the record to include a certified copy of the stipulation.
Procedural improprieties in requesting "augmentation" of the record to include this document (filed nearly two years after the order which is the subject of the appeal) to one side, our review of the document does not establish that it renders the appeal moot. The stipulation contains a provision which specifically states: "Each party waives attorney fee [sic] against each other through this date except as to any fees previously ordered, specifically to Tina Schuchman [wife's counsel at the time of the attorney fee order at issue in this appeal.]" (Emphasis added.) While the stipulation does state that wife: "waives reimbursement claim on support arrearages to 4-7-99" and that "Each party waives all and any reimbursement claims against the other for any reason . . . ," the document also states that "Each party irrevocably waives spousal support from the other effective 4-7-99 . . . ." (Emphasis added.) From this document it does not appear that husband's appeal, either in regard to its challenge to the temporary spousal support award or its challenge to the pendente lite award of attorney fees, has been rendered moot.
C. The Trial Court Did Not Abuse its Discretion In Ordering Temporary Spousal Support
Section 3600 provides, in pertinent part: "During the pendency of any proceeding for dissolution of marriage . . . the court may order (1) the husband or wife to pay any amount that is necessary for the support of the wife or husband . . . ." The amount of temporary spousal support awarded by a court is a matter of discretion and will not be reversed absent a "clear showing" of abuse of discretion. (In re Marriage of Dick (1993) 15 Cal.App.4th 144, 165.)
The order from which the appeal is taken recites the court's findings that husband had monthly gross wages and salary of $4,935 and monthly non-taxable income of $470, for a gross total of $5,405, the precise income figure submitted by husband's accountant. The court found wife had non-taxable income of $500 per month. Husband was found to have 10 percent "visitation time." Based on those figures the court determined, with the aid of the Dissomaster program, that husband would be required to pay, pendente lite, $1,468 per month in "guideline" child support, ($918 for the younger child and $550 for the elder) retroactive to January 1, 1997 and continuing until further order of the court. The court further determined that husband would be required to pay $800 per month in "guideline" temporary spousal support, retroactive to January 1, 1997 and continuing until further order. As "additional child support," husband was ordered to pay 90% of all uncovered medical expenses of the minor children. As "additional spousal support," husband was ordered to pay 50% of all uncovered medical expenses of wife.
Husband argues on appeal that the trial court abused its discretion in awarding pendente lite spousal support because the court "did not consider" wife's earning potential or rental income, and did not consider the short length of the marriage. Neither the record nor the pertinent statutes and case authority support husband's position.
The court found that wife's income was limited to approximately $500 per month she received as "Indian reparations." The record establishes that the court did in fact consider husband's contentions that wife could have been earning some sum as some type of medical bookkeeper. Wife vigorously disputed husband's attempt to attribute income to her, introducing evidence of a sparse work history, minimal qualifications, and pointing out that she had been terminated from her last job as a bookkeeper in a medical office while still in her "probationary period." The record reflects wife's evidence that she had attempted to find employment but was not then working, and had been hampered in her efforts to find work by her limited skills, virtually exclusive custody of the two children, various medical conditions, and by husband's abusive conduct. From this record we cannot say that the court abused its discretion in determining, pendente lite, not to impute income to wife above that actually received.
The same is true with regard to "rental income." Wife presented evidence that although she had received some rent in the past, she was not in fact receiving cash from another occupant of the family home, but instead that the individual in question occasionally performed maintenance and contributed to utilities. Husband cites no authority for the proposition that rental income should have been imputed to wife for purposes of computing pendente lite guideline spousal support. On this record we perceive no abuse of discretion by the trial court in declining to do so.
Husband also argues that spousal support should have been terminated altogether in light of the relative brevity of the marriage, and the length of time husband had been making payments under the original stipulation and order in the domestic violence action. Husband acknowledged below that the payments which he now argues were "de facto" spousal support were not denominated as such in the original stipulation and order under which the parties had operated for over four years by the time of the hearing on the OSC. The trial court noted that the case was still at the "pendente lite" stage, and asked husband for authority supporting his insistence that temporary support be terminated prior to trial, which at that time was set to take place three months later. Husband presented no such authority, and presents none on appeal.
Citing section 4320, however, husband argues that the trial court abused its discretion because in determining temporary spousal support the court "must" consider: "among other factors, the ability to pay of the supporting party, the employability of the supported party, and the duration of the marriage." Husband is incorrect. As the Law Revision Commission Comment to section 4320 makes clear: "[T]he court is only required to consider these factors when making an order for permanent spousal support." (Emphasis added.)
Reported decisions draw the same distinction: "An award of permanent spousal support made pursuant to [former] Civil Code section 4801 [now Family Code section 4320] requires the court to make specific factual findings. The same is not required for an award of pendente lite spousal support. The trial court has discretion to award spousal support pending a final judgment in the dissolution proceeding. [Citation.] The amount of support lies within the trial court's sole discretion based on the needs of the parties and their ability to pay. [Citations.]" (In re Marriage of Czapar (1991) 232 Cal.App.3d 1308, 1316.)
"The purpose of temporary spousal support is to maintain the status quo as much as possible pending trial. (In re Marriage of Olson (1993) 14 Cal.App.4th 1, 5-6, fn. 3 []; In re Marriage of Winter (1992) 7 Cal.App.4th 1926, 1932 [] ['temporary spousal support "is utilized to maintain the living conditions and standards of the parties in as close to the status quo position as possible pending trial and the division of their assets and obligations"'].) By contrast, permanent spousal support is supposed to reflect a complex variety of factors established by statute and legislatively committed to the trial judge's discretion, including several factors which tend to favor reduced support, such as the 'goal' that the supported spouse should become self-supporting within a reasonable period of time. [Citation.] [¶] Furthermore, not only are the legal bases for the two kinds of support different, there is also a disparity in practice. Because dissolution of marriage is, in the mathematical sense, a negative-sum game where each party will not have the same access to the whole of the marital property he or she had during the marriage, permanent support orders will usually be lower than temporary orders." (In re Marriage of Schulze (1997) 60 Cal.App.4th 519, 525.)
"Unlike 'permanent' spousal support orders which -- both in amount and duration -- must be based on a consideration and weighing of several codified factors [Fam. Code § 4320], temporary spousal support may be ordered in 'any amount' based on the moving party's need and the other party's ability to pay. [Citations.]" (Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group 1999) § 5:152, p. 5-46-5-47.) "Most appropriately, trial courts look to the parties' accustomed marital lifestyle as the benchmark for a temporary spousal support award. This approach facilitates the purpose of pendente lite spousal support -- maintaining the parties' living conditions and standards in as close to their preseparation 'status quo position' as possible pending trial . . . . [Citations.]" (Id. at § 5:154, p. 5-47.) "In fixing a temporary spousal support amount, trial courts are not restricted by any set of statutory guidelines. Subject to the general yardstick of 'need' and 'ability to pay,' the amount of the award lies within the trial court's sound discretion and is reversible on appeal only on a showing of 'clear abuse of discretion.'" (Id. at § 5:153, p. 5-47.) "Because temporary spousal support serves an entirely different purpose than 'permanent' spousal support awarded by judgment after trial, the [section] 4320 factors are not controlling on the question of temporary spousal support awards. [Citation.]" (Id. at § 5:156, p. 5-48.)
In this case there was ample evidence that during the time in question wife had a significantly reduced income of approximately $500 a month (which stood in stark contrast to the standard of living enjoyed by the parties during the marriage), and that husband, a physician, had the ability to pay temporary spousal support of $800 per month. Indeed, husband specifically asked that the court calculate guideline child and spousal support using the $5,405 income figure supplied by husband's second accountant. 4 That is precisely what the court did, as revealed by the court's comments at the hearing, the Dissomaster printout the court supplied to counsel, and the court's order. The basic difference between that which husband asked for and that which he received is merely that the court found a custodial percentage for husband of 10% rather than 20% (a finding husband does not challenge on appeal), and that the court did not impute income to wife above the approximately $500 in monthly reparations.
In light of the purpose of pendente lite spousal support to maintain the status quo, the court's manifest consideration of husband's evidence and rejection of his argument in support of a lower amount of spousal support or outright termination of such support, and the broad discretion vested in the court in making temporary spousal support determinations, we find no abuse of discretion in the court's award of temporary spousal support in the amount of $800 per month.
[End of Part Not Certified for Publication]
D. The Trial Court Abused its Discretion in Awarding Attorney Fees and Costs.
During the pendency of a dissolution action, a court may order that one party pay some or all of the other party's legal fees and costs. (§ 2030, et seq.) "'California's public policy in favor of 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.'" (Droeger v. Friedman, Sloan & Ross (1991) 54 Cal.3d 26, 41, fn. 12.) "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.]" (In re Marriage of Cueva (1978) 86 Cal.App.3d 290, 296.)
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]." (In re Marriage of Hatch (1985) 169 Cal.App.3d 1213, 1219.) The trial court's discretion in this area is thus limited by the statutes which enable the exercise of that discretion.
Under section 2030, subdivision (a): "During the pendency of a proceeding for dissolution of marriage . . . , the court may, upon (1) determining an ability to pay and (2) consideration of the respective needs and incomes of the parties in order to ensure that each party has access to legal representation to preserve all of the party's rights, order any party . . . to pay the amount reasonably necessary for attorney's fees and for the cost of maintaining or defending the proceeding." (Emphasis added.) Under section 2032: "(a) The court may make an award of attorney fees and costs under Section 2030 . . . where the making of the award, and the amount of the award, are just and reasonable under the relative circumstances of the respective parties. (b) In determining what is just and reasonable under the relative circumstances, the court shall take into consideration the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the party's case adequately, taking into consideration, to the extent relevant, the circumstances of the respective parties described in Section 4320 [the factors for determination of "permanent spousal support"]. . . . 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." (Emphasis added.)
The trial court's decision here does not reflect consideration of husband's ability to pay wife's professional fees at the rate of $1000 per month (or indeed at $500 per month), does not reflect consideration of the respective litigation needs of the parties, and does not reflect consideration of whether the fees allegedly incurred were reasonably necessary. Accordingly we conclude the court abused its discretion with respect to the fee award.
The court found that husband's monthly income from all sources was $5,405. It then ordered husband to pay $1,468 per month in child support, and $800 per month in spousal support. Subtracting the required monthly payments of child and spousal support, and husband's monthly tax liability of $1,344 as indicated by the same Dissomaster report utilized by the court to arrive at the support figures, left husband $1,793 per month. Husband had previously declared that his monthly rent for a one bedroom apartment was $700, and there is no indication in the record that the court rejected husband's need to pay that moderate amount. Thus, after payment of child and spousal support, taxes, and rent, husband had $1093 a month remaining. From this, the court ordered husband to pay wife's previously incurred accountant fees at the rate of $1000 per month, leaving only $93.00 a month for husband to pay all of life's other expenses. On reconsideration, stating that it recognized the financial burden of the fee award, the court lowered the prospective payments for attorney fees to $500 per month.
Considering that the court also ordered husband to pay 90% of all uncovered medical expenses for the children, and 50% of all uncovered medical expenses for wife, the undisputed evidence of a lack of equity in the former marital residence, and the lack of any finding concerning any other source of payment, we can discern no justification for ordering husband to pay wife's accountant's fees at the rate of $1000 per month. Leaving husband $93.00 per month after payment of his court-ordered obligations and rent virtually speaks for itself. As to the prospective $500 monthly payments of wife's attorney fees, while it could perhaps be argued that leaving husband $593 a month after court-ordered obligations, taxes and rent might be equitable under the parties' strained circumstances, the record does not sufficiently reflect, for example, any consideration of the husband's needs to pay his own outstanding legal fees during that period. Yet the court in making the order was required to "take into consideration the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the party's case adequately." (§ 2032, subd. (b).)
Wife argues that the record "demonstrates [husband] had the cash flow to support the order." We disagree. The court's express findings of husband's monthly gross income left little room for payment of attorney fees and costs after payment of the monthly support obligation. Even if, due to the income disparity between the parties and husband's presumably greater earning capacity, we were able to ascertain from the record that the trial court was within its discretion in ordering husband to pay $25,000 of wife's attorney fees and $3200 of the accountant's fees, this record would not support ordering husband to pay such sizeable monthly installments. The situation is somewhat similar to that in In re Marriage of Schulze, supra, 60 Cal.App.4th 519, where the reviewing court, although it found the total amount of fees husband was ordered to pay was appropriate, also found that the court erred in requiring the payment to be made "forthwith": "The family support order left Michael with less than $2,000 a month in actual cash. It is clear the trial judge presumed Michael would be able to obtain the $7,500 from his parents. This presumption was error. . . . Nothing showed that Michael had, or was reasonably likely to have, the 'ability to pay' the $7,500 forthwith except the notion that Michael's parents' generosity could be taken for granted. In light of the absence of any liquid assets, it was unreasonable not to have allowed Michael to pay the $7,500 attorney fee order in manageable installments, consistent with the income he had left after he paid the family support order." (Marriage of Schulze, supra, 60 Cal.App.4th at pp. 531-532, emphasis added.)
Wife points out that: "'[T]he cases have frequently and uniformly held that the court may base its decision on the [paying spouse's] ability to earn, rather than his [or her] current earnings . . . ' for the simple reason that in cases such as this, current earnings give a grossly distorted view of the paying spouse's financial ability. [Citation.]" (In re Marriage of Sullivan (1984) 37 Cal.3d 762, 769.) In this case there is no indication the trial court based its decision on husband's "ability" to earn. More significantly, perhaps, there is no indication the trial court considered the proper factors in determining whether the fees awarded were reasonable and necessary in the first place.
This case involves a relatively short marriage, with no substantial marital estate, and no child custody dispute. According to the court's findings, wife had almost no income; and husband was earning approximately $65,000 per year. Despite the relative dearth of issues and of assets, the parties allegedly incurred at least $60,000 in attorney fees; $35,000 of which was allegedly incurred by wife over the course of roughly three months immediately prior to the hearing on the OSC. Yet the court ordered husband to pay $25,000 of wife's fees on nothing more than wife's secondhand comment (albeit in a declaration) about what her latest "bill" stated, and on wife's counsel's unsworn representation that she was owed "approximately $35,000." 5
Assuming for purposes of argument that fees of that magnitude were actually incurred, still the court made no inquiry into whether the fees were, in the words of section 2030, "reasonably necessary." The court made no evaluation of the legal work done on wife's behalf despite husband's objection that, based on wife's own prior filings and requests for continuance of the OSC, it appeared much of the time was spent seeking to get file materials from prior counsel, "reinventing the wheel," or requesting additional continuances. Without ascertaining whether or at what hourly rate the work for which reimbursement was sought was actually done, much less that the work was "reasonably necessary" in light of the issues in the case, the trial court could not properly find that imposing upon husband approximately 70% of wife's legal bill was "just and reasonable under the relative circumstances of the respective parties" as required by section 2032.
Acknowledging the fact that it appears husband's own fees were represented to have approximated or exceeded $25,000 does little more than allow informed speculation that the court decided to require husband to pay at least as much for wife's attorney fees as he did for his own. That is not the standard by which the court was to determine the amount of the award. "The major factors to be considered by a court in fixing a reasonable attorney's fee [include] 'the nature of the litigation, its difficulty, the amount involved, the skill required and the skill employed in handling the litigation, the attention given, the success of the attorney's efforts, his learning, his age, and his experience in the particular type of work demanded [citation]; the intricacies and importance of the litigation, the labor and the necessity for skilled legal training and ability in trying the cause, and the time consumed. [Citations.]' [Citations.]" (In re Marriage of Cueva, supra, 86 Cal.App.3d at p. 296.) The record reflects no consideration of such issues.
Wife cites authority for the proposition that the court can determine the reasonable value of services based upon its own expertise. Yet, as pointed out by the court in In re Marriage of Cueva, supra, 86 Cal.App.3d at p. 300, such statements are "overbroad and incorrect." "Correctly stated, the rule is that when the trial court is informed of the extent and nature of the services rendered, it may rely on its own experience and knowledge in determining their reasonable value." (Ibid., emphasis added.) Moreover, "'The exercise of sound discretion by the trial court in the matter of attorney's fees includes also judicial evaluation of whether counsel's skill and effort were wisely devoted to the expeditious disposition of the case.' [Citation.]" (In re Marriage of Huntington (1992) 10 Cal.App.4th 1513, 1524.)
The court here was not apprised of the nature and extent of the services rendered, so it could not determine their reasonable value based upon its own expertise. Contrary to wife's assertion, the two-volume clerk's transcript in this case does not in and of itself reflect $35,000 worth of legal work in the approximately three- to four-month period since wife's "new" counsel first appeared in the action. The record also does not reflect "judicial evaluation of whether counsel's skill and effort were wisely devoted to the expeditious disposition of the case." (Huntington, supra, 10 Cal.App.4th at p. 1524.)
It was an abuse of discretion to order husband to pay wife's attorney fees without making any inquiry into the reasonableness of those fees. Neither the attorney for a party to a dissolution action nor the attorney's client is entitled to recover, from the opposing spouse, a contributive share of whatever fees the attorney chooses to charge. Although the attorney's right to recover from the attorney's own client may be limited only by the fee agreement and ethical limitations, there are additional limitations on recovery of fees from the opposing spouse -- including not only that the opposing spouse has the ability to pay, but also that the fees be "reasonably necessary," and that payment of the fees by the opposing spouse is "just and reasonable" under the relative circumstances of the respective parties. (§§ 2030, 2032.)
The record on appeal does not itself justify fees of this magnitude during the time frame in question. Although in this posture we do not determine such issues, the record on appeal as presently constituted is consistent with a relatively simple dissolution action, to which counsel either claims to have devoted an inordinate amount of time, or to have charged excessive rates, or a combination of the two, resulting in fee claims which at least facially appear out of proportion to the issues presented. Although there may be some legitimate reason for such large fees, it is not reflected in this record. Approval of claims of this type, without prior judicial scrutiny followed by appropriate findings and modification where necessary, is an abdication of the judicial function and an abuse of discretion. Accordingly, the order insofar as the payment of attorney fees and costs must be reversed and remanded to the trial court for the determinations required under sections 2030 and 2032.
III. DISPOSITION The order insofar as it directs payment of a contributive share of wife's attorney fees and accountant's fees, and insofar as it directs payment of that total in prescribed monthly amounts, is reversed and remanded to the trial court for the determinations required under Family Code sections 2030 and 2032. In all other respects the order is affirmed. Each party to bear their own costs on appeal.
ZEBROWSKI, J.
We concur:
NOTT, Acting P.J.
MALLANO, J.*
* Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of parts, IIA, IIB and IIC.
1 All further statutory references are to the Family Code unless otherwise indicated.
2 The only other possible indication of the amount of wife's attorney fees came during the hearing on the OSC, when wife's attorney stated: "Issue of attorneys' fees -- I have not gotten paid anything -- anything by Dr. Keech. My fees to date are approximately $35,000. If I do not get a contribution I will have to get off of the case and [wife] will be left without legal representation. . . . THE COURT: Have you been paid anything? [Wife's counsel]: I have, as reflected on the income and expense declaration, gotten a $2,500 retainer in this case. THE COURT: And how much has been incurred to date by you? [Wife's counsel]: Approximately $35,000. . . . "
3 As far as the record on appeal shows, the attorney in question had not appeared in the action prior to January 21, 1997, roughly three months before the hearing on the OSC.
4 Indeed only a few months earlier, husband had filed declarations representing that he had a much higher income. Husband filed an Income and Expense Declaration along with his June 1996 OSC, reporting net monthly disposable income of over $6900 per month and expenses of over $3800 per month, and attorney fees of nearly $6700. In July of 1996 husband submitted the declaration of his accountant, which concluded that husband's "average monthly cash flow" available for support for the preceding six months was $8,893. On January 3, 1997, husband filed another income and expense declaration. This time he declared net monthly disposable income of $7242.98, current net monthly disposable income of over $6900, and total monthly expenses of over $7800 per month. However, later that same month husband submitted the declaration of a different accountant, reciting that his monthly cash flow available for support was only $5,042, eventually revised slightly upward to $5,405.
5 Wife did present a portion of the accountant's bills, from which it might be argued we should infer in support of the order that the court found those fees reasonably necessary, and from the parties relative disparity in incomes we might also infer that requiring the husband to pay the vast majority of those bills might be a proper exercise of discretion. Yet the accountant fees husband was ordered to pay exceeded the balance reflected on the bills. In any event, even as to documented accountant's fees, as set forth above the court's order that husband pay those fees in installments of $1000 per month would still require reversal and remand.
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
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