Opinion
B296823
06-04-2020
MICHELLE A. HEREDIA, Respondent, v. ALBERT HEREDIA, Appellant.
Holstein, Taylor and Unitt, and Brian C. Unitt; Howington & Associates, and Joseph W. Howington for Appellant. Gray Law Corporation, and Kerry Wallis; Jeff Lewis Law, Jeffrey Lewis, and Sean C. Rotstan for Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. YD063737) APPEAL from a judgment of the Superior Court of Los Angeles County, David S. Weinberg, Temporary Judge. Affirmed. Holstein, Taylor and Unitt, and Brian C. Unitt; Howington & Associates, and Joseph W. Howington for Appellant. Gray Law Corporation, and Kerry Wallis; Jeff Lewis Law, Jeffrey Lewis, and Sean C. Rotstan for Respondent.
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A wife sought dissolution of marriage from her husband. After the couple entered into a stipulated judgment that resolved most issues except attorney fees, the trial court ultimately ordered the husband to pay half of the wife's attorney fees pursuant to Family Code section 2030. Husband claims this was error. It was not, so we affirm.
All further statutory references are to the Family Code unless otherwise indicated.
FACTS AND PROCEDURAL BACKGROUND
I. Marriage and Family
Albert Heredia (Albert) and Michelle Heredia (Michelle) married in March 1991, and separated in June 2012. While married, they had two children who are now adults.
Because the parties share the same last name, we use first names for clarity. We mean no disrespect.
II. Dissolution and Stipulated Judgment
In September 2013, Michelle filed for dissolution of marriage. At the parties' request, the trial court signed an order appointing a temporary judge to adjudicate their case.
In August 2018, the parties entered into a stipulated judgment. Pursuant to the stipulated judgment, Michelle had primary physical custody of one of the children (who was, at the time, still a minor); Albert agreed to pay $1,770 in monthly child support and $2,000 in monthly spousal support; the former spouses split the balances in their shared checking and savings account, agreed to keep the jewelry and furnishings they possessed, and Albert got to keep a 2006 Chevy Tahoe, a 1979 Scout fishing boat, and a Yamaha dirt bike. The parties also agreed that the trial court would "retain[] jurisdiction over the issue of attorney's fees and costs."
The trial court entered the stipulated judgment on August 31, 2018, and specifically "reserved" jurisdiction over "[a]ll issues relating to attorney's fees and costs."
III. Litigation Over Attorney Fees
In mid-September 2018, Michelle filed a motion asking the temporary judge, pursuant to section 2030, to require Albert to pay all of the attorney fees she had incurred litigating the dissolution action. Michelle had incurred approximately $93,000 in attorney fees, and asked that Albert be ordered to pay $20,000 up front and $3,000 per month for another 24 months. Albert opposed the motion, and both former spouses filed replies.
Michelle also asked that attorney fees be awarded as a sanction under section 271, but the trial court found "no factual basis" for such a sanction and Michelle has not appealed that ruling.
The parties submitted the following evidence regarding their respective abilities to pay attorney fees:
• Michelle's ability to pay. Michelle has worked in a variety of relatively low-paying jobs (as a grocery store cashier, a receptionist at a chiropractic office, a sales consultant for Tupperware, and a guest logistics agent). In the Income and Expense Declaration Michelle filed in August 2018, she reported that her last month's income was $1,056 but her average monthly income was $177. Michelle reported having monthly living expenses of $5,000. She has no funds in her bank account, owes $6,500 in back taxes and has borrowed money from her mother. Michelle has not paid any of the $93,000 in attorney fees, and her attorney had deferred collection pending Michelle's motion.
Some of this information comes from statements in Albert's reply papers or from findings of the judge ruling on the motion. Albert seems to take issue with relying on such information, but he has not indicated that it is incorrect.
• Albert's ability to pay. Albert has been a firefighter for 31 years. Between 2010 and 2015, his annual income fluctuated between $111,086 and $193,565; between 2013 through 2015, it exceeded $173,000. His hourly wage, not including overtime, is $41.02 or $43.50 per hour. In the Income and Expense Declaration Albert filed in August 2018, he reported that his last month's income was $10,402.13 (consisting of $9,636 in wages and $766.13 in overtime) but his average monthly income was $13,132 (consisting of $10,090.72 in wages and $3,040.79 in overtime). He also reported monthly expenses of $5,503.15, which included a $200 clothing allowance, $49.95 for his mother's Life Alert subscription, and "real property" taxes of $93.33 (even though he elsewhere admitted that he no longer owns a home). A DissoMaster report run in September 2018 and using his average monthly income of $13,132 indicated that Albert had a "net spendable income" (that is, income after taxes) of $8,484 and estimated he could pay $3,819 in spousal support after subtraction of what it estimated to be reasonable monthly expenses. As of March 31, 2018, one of Albert's bank accounts had a balance in excess of $23,000, although as the parties neared settlement, he made several large cash withdrawals that left the account with a balance of about $3,000 by July 31, 2018. Albert incurred and was able to pay in full his attorney fees of somewhere between $40,000 and $51,000, and he paid somewhere between $32,000 and $38,000 of those fees by taking out a loan using his deferred compensation plan as collateral. There is no evidence that Albert used the money withdrawn from his bank account to pay the remaining balance.
"Net spendable income" refers to income after taxes. (E.g., Canavin v. Pac. Southwest Airlines (1983) 148 Cal.App.3d 512, 521; In re Marriage of Marx (1979) 97 Cal.App.3d 552, 562.)
In a minute order and in subsequent, written findings, the temporary judge ordered Albert to pay Michelle's attorney $45,000 of the outstanding $93,000 balance of attorney fees pursuant to section 2030. Relying upon the parties' Income and Expense Declarations as well as the support obligations that Albert had stipulated to make, the judge found a "demonstrated disparity between the parties in access to funds and the ability to pay for legal representation," a "demonstrated need by [Michelle]" for assistance in paying her fees, and an "established ability of [Albert]" to pay some of those fees. The judge also examined each of the factors set forth in section 4320, including that Albert's "income is appreciably more than [Michelle's], even after" his monthly spousal support obligation and that Albert has a "larger asset base" than Michelle. The judge specified that Albert should pay $20,000 up front and $1,000 a month for the next 25 months.
IV. Judgment and Appeal
Although the judge's minute order was dated September 25, 2018 and his findings dated November 13, 2018, the trial court did not enter judgment on the reserved issue of attorney fees until February 20, 2019. The court issued its notice of entry of judgment the same day.
Albert filed his notice of appeal on March 27, 2019.
DISCUSSION
Under section 2030, a trial court has the discretion to require one spouse in a dissolution proceeding to pay all or some of the attorney fees and costs incurred by the other spouse if (1) "there is a disparity in access to funds to retain counsel," such that the receiving spouse "needs" the money "to present [her] case adequately," (2) the paying spouse is "able to pay for legal representation of both parties," and (3) the resulting fee-shifting order is "just and reasonable under the relative circumstances of the respective parties." (§§ 2030, subds. (a)(1) & (a)(2), 2032, subds. (a) & (b).) In assessing "what is just and reasonable under the relative circumstances," a court is to "consider[], to the extent relevant, the circumstances of the respective parties described in Section 4320." (§ 2032, subd. (b).) The "relevant" section 4320 factors are those concerned with the "assets, debts and earning ability of both parties, ability to pay, duration of the marriage, and the age and health of the parties." (In re Marriage of Duncan (2001) 90 Cal.App.4th 617, 630 (Duncan).) The goal of a fee-shifting order is to create "parity" by "'apportion[ing] the overall cost of the litigation equitably between the [former spouses].'" (Alan S. v. Superior Court (2009) 172 Cal.App.4th 238, 251, 253, italics omitted.) Given this goal, the fact that the spouse receiving fees "could pay [her] own attorney's fees and costs is not itself a bar" to fee shifting. (§ 2032, subd. (b).)
Albert argues that the trial court (by incorporating the temporary judge's ruling) erred in requiring him to pay $45,000 of Michelle's attorney fees. Specifically, he argues that (1) he lacks the ability to pay the $20,000 lump sum payment or the subsequent $1,000 monthly payments, and (2) Michelle lacks the "need" for his assistance because she is cohabitating with someone else who is contributing to her support. We generally review a fee-shifting order under section 2030 for an abuse of discretion (Duncan, supra, 90 Cal.App.4th at p. 630; In re Marriage of Drake (1997) 53 Cal.App.4th 1139, 1166), and review any subsidiary findings of the trial court—which is what Albert is attacking on appeal—for substantial evidence (Tire Distributors, Inc. v. Cobrae (2005) 132 Cal.App.4th 538, 544).
Albert does not otherwise challenge the amount of fees awarded or the temporary judge's findings regarding the disparity in income or the justness and reasonableness of the award. --------
As a threshold matter, Michelle asserts that we cannot entertain Albert's appeal because his notice of appeal, which he filed more than 60 days after the temporary judge (1) issued his minute order and (2) issued his factual findings, is untimely. This argument ignores that only judgments are appealable (Code Civ. Proc., § 904.1, subd. (a)), and that neither the temporary judge's minute order or his factual findings were ever filed or entered with the court. (Accord, Kinsler v. Superior Court (1981) 121 Cal.App.3d 808, 810 [no appeal lies from minute orders followed by a subsequent judgment].) It was not until the February 20, 2019 judgment on reserved issues was entered that the clock began ticking, and by that clock, Albert's notice of appeal was timely.
We now turn to the merits of Albert's appeal.
I. Albert's Ability to Pay the Fee-Shifting Award
The trial court did not abuse its discretion in ordering Albert to pay $45,000 of Michelle's unpaid attorney fees because substantial evidence supports the temporary judge's finding that Albert has the ability to (1) make the $20,000 lump sum payment, and (2) make the 25 subsequent $1,000 monthly payments.
A. The $20,000 lump sum payment
Substantial evidence supports the temporary judge's finding that Albert has the ability to make the $20,000 lump sum payment to Michelle. As of March 31, 2018, Albert had more than $23,000 sitting in his bank account; what is more, he was awarded a Chevy Tahoe, a dirt bike and a boat. The value of these items far exceeded $20,000.
Albert makes what boils down to two arguments in response.
First, he asserts that the balance of that account had been reduced to just $3,108.97 by July 31, 2018. This is true, but it is because he made large cash withdrawals totaling over $32,000 from the account in the months leading up to the stipulated judgment. The judge could reasonably infer from these cash withdrawals as well as the lack of any evidence as to whether or how those funds were spent that Albert still had possession and control over those withdrawn funds, and thus had the ability to pay the $20,000 lump sum with those funds. (In re Marriage of Dick (1993) 15 Cal.App.4th 144, 162, 164 [in assessing a husband's ability to pay, court may consider funds that husband transferred to others but over which he still maintained control]; see generally King v. State of California (2015) 242 Cal.App.4th 265, 278-279 [court may draw "reasonable inferences"].) Albert complains that Michelle is wrong to speculate that he put the withdrawn funds into some other account, yet what matters is not where Albert put the withdrawn funds, but that he withdrew them—and that fact is undisputed (and hence not speculative).
Second, Albert contends that Michelle is wrong to point to Albert's ability to borrow against the deferred compensation plan when she complained about his doing so before the temporary judge. We need not address this contention because, for the reasons noted above, substantial evidence supports the temporary judge's finding that he could afford the $20,000 lump sum payment even without considering this additional source of funds.
B. The $1,000 monthly payments
Substantial evidence also supports the temporary judge's finding that Albert has the ability to make $1,000 monthly payments for the ensuing 25 months. Albert's most recent Income and Expense Declaration (from August 2018) shows that he had an average monthly income of $13,132, monthly expenses of $5,503.15, and a monthly spousal support payment of $2,000. This leaves $5,628.85, which is more than $1,000. Even if we look to the DissoMaster report, that shows a post-tax monthly income of $8,484. Even if we were to accept Albert's reported monthly expenses of $5,503.15—which is far higher than what the DissoMaster would allocate for monthly expenses—that would leave $2,980.85. After paying the $2,000 monthly spousal support payment, that would leave $980.85 to pay the $1,000 payment. The trial court could have reasonably determined that the shortfall of $19.15 could be covered by reducing his $200 monthly clothing expense or disregarding his $93.33 real property tax expense when he owns no real property, such that Albert would have enough to make the $1,000 monthly payment.
Albert makes what boil down to five arguments in response.
First, he asserts that the temporary judge was required to look to his last month's income rather than his average income. We reject this assertion. Albert's income has fluctuated from month to month and year to year, such that the court's resort to average income was entirely reasonable. (See In re Marriage of Riddle (2005) 125 Cal.App.4th 1075, 1081-1082 [preference is to use an average where income fluctuates].)
Second, Albert contends that the temporary judge was required to ignore all of his overtime pay. To be sure, a court may not consider a former spouse's "extraordinary work regimen" in calculating "earning capacity" and hence fixing support orders. (In re Marriage of Simpson (1992) 4 Cal.4th 225, 234.) But a court may consider that spouse's "objectively reasonable work regimen" even if that regimen includes overtime. (Id. at pp. 234-235; In re Marriage of Bardzik (2008) 165 Cal.App.4th 1291, 1312 [same]; In re Marriage of Smith (1990) 225 Cal.App.3d 469, 493, fn. 15 [rejecting notion that "income from overtime work . . . should [always] be disregarded in determining spousal support"].) The judge found that Albert has been working an average of four to six days of overtime per month, and this has been part of his "work regimen" for some period of time (given his average monthly overtime pay of $3,040.79) and Albert has offered no evidence that this longstanding regimen of his is "extraordinary." In the absence of such a showing, the judge was within his discretion to consider Albert's overtime pay.
Third, Albert seems to suggest that he should have no income attributed to him because, as a firefighter, he could have retired at age 55. Firefighters can retire at age 55 (In re Marriage of Shimkus (2016) 244 Cal.App.4th 1262, 1276 (Shimkus); Cal. Code Regs., tit. 2, § 586.1, subd. (a)(2)(D); Gov. Code, § 21363, subd. (a)), and courts may not "'compel[]'" a former spouse to "'work after the usual retirement age . . . in order to pay the same level of spousal support'" (Shimkus, at p. 1277; In re Marriage of Reynolds (1998) 63 Cal.App.4th 1373, 1377 (Reynolds)). But this limiting principle applies only if the former spouse "had indeed retired from active employment" (Reynolds, at p. 1377), and Albert has not retired.
Fourth, Albert posits that he only has $452.85 left over each month, which is not enough to pay the $1,000 monthly obligation. Albert does not explain how he has come up with this figure, and as far as we can tell, he appears to have reached it by mixing and matching the figures he prefers to be used (that is, the last month's income but not including any overtime, minus his arguably over-inflated monthly expense calculation). For the reasons noted above, the temporary judge's decisions on which figures to use was reasonable, such that the judge's decision not to use Albert's mix-and-match approach was not unreasonable.
Lastly, Albert notes that he was required to take out a loan to pay his attorney fees. This is true, but has nothing to do with whether he can pay $1,000 a month on a going-forward basis.
II. Michelle's "Need" For Assistance in Paying Attorney Fees
The trial court did not abuse its discretion in ordering Albert to pay $45,000 of Michelle's unpaid attorney fees because substantial evidence supported the temporary judge's finding that Michelle had a "demonstrated need" for those funds. That finding was supported by the evidence of Michelle's relatively small hourly wage and the absence of any assets she could liquidate to pay those unpaid fees. It is a little unclear, but Albert seems to contend that Michelle's cohabitation with another man eliminates her need for funds because the cohabitant can support her. Although a former spouse's cohabitation with another triggers a rebuttable presumption that there are changed conditions that warrant a change in spousal support (§ 4323, subd. (a); In re Marriage of Schroeder (1987) 192 Cal.App.3d 1154, 1159-1160), Albert has offered no authority indicating that this presumption applies in assessing a former spouse's need for a fee-shifting order under section 2030. And even if such a presumption applied, the temporary judge had ample basis to conclude that it was rebutted by the parties' stipulated judgment agreeing that Michelle still needed $2,000 per month in spousal support despite her cohabitation with someone else. Albert's attorney submitted a reply brief below that purported to double as a sworn declaration and stated that Michelle's "boyfriend . . . pays for her living expenses, [and thus] negate[s] her necessity to find employment to live the lifestyle she has always been accustomed to." But this is not evidence; it is argument masquerading as evidence. As such, it is entitled to no weight, especially where, as here, the statement lacks any foundation whatsoever (e.g., how does the attorney know this and if that knowledge is based on the statements of others (rather than personal observation) how are those statements not hearsay?). (Accord, In re Marriage of Heggie (2002) 99 Cal.App.4th 28, 30, fn. 3 ["The proper place for argument is in points and authorities, not declarations."].)
DISPOSITION
The judgment is affirmed. Michelle is entitled to her costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
/s/_________, J.
HOFFSTADT We concur: /s/_________, P. J.
LUI /s/_________, J.
CHAVEZ