Opinion
A157876
01-11-2021
IN RE the MARRIAGE OF Nancy G. ERNDT AND Michael A. TERHORST Nancy G. Erndt, Plaintiff and Appellant, v. Michael A. Terhorst Defendant and Respondent.
Codekas Family Law, Matthew J. Smith, Sacramento, for Plaintiff and Appellant. Beeson Terhorst, Jeffrey E. Beeson, for Defendant and Respondent.
Certified for Partial Publication.
Pursuant to California Rules of Court, rules 8.1105(b) and 8.1110, this opinion is certified for publication with the exception of the following portions of the Discussion: Section I. The Trial Court Rulings Regarding Division of Community Retirement Plan and Refusal to Set Aside Stipulation; and Section III. Husband's Motion for Sanctions on Appeal.
Codekas Family Law, Matthew J. Smith, Sacramento, for Plaintiff and Appellant.
Beeson Terhorst, Jeffrey E. Beeson, for Defendant and Respondent.
Petrou, J. Nancy G. Erndt (wife) and Michael A. Terhorst (husband) entered into a settlement agreement, in the form of a verbal stipulation, regarding the terms of their marital dissolution ("the stipulation"). The stipulation included an equal division of the community property portion of wife's retirement plan without any mention of the plan's survivor benefits. Thereafter, the parties could not agree as to whether husband had survivor benefits under wife's retirement plan and they asked the court to resolve their dispute; in the alternative, wife asked the court to vacate the stipulation.
The trial court ruled as follows: the survivor benefits were found to be an "omitted asset" ( Fam. Code, § 2556 ) subject to an equal division under section 2610, subdivision (a)(2); wife was not entitled to an order vacating the stipulation; and judgment was to be entered accordingly. The court also awarded husband $800 in attorney fees and $180 in costs in the nature of sanctions under section 271.
All further statutory references are to the Family Code unless otherwise specified.
On appeal, wife contends the court erred in treating the survivor benefits as an omitted asset as the stipulation provided husband would not receive a survivor benefit by virtue of its silence on the topic. Alternatively, she seeks to vacate the stipulation in its entirety based on there being no "meeting of the minds" concerning the division of survivor benefits. We see no merit to wife's contentions and, accordingly, we affirm that portion of the judgment that provides husband is to receive a survivor benefit related to his community property share of the retirement plan. We reverse, in part, that portion of the judgment and order awarding husband the sum of $800 in attorney fees as section 271 does not permit an award of fees to a self-represented party.
We deny husband's separate motion for sanctions for the filing of a frivolous appeal and to cause delay.
Factual and Procedural Background
The parties were married in 1986 and wife filed a petition for dissolution in 2010.
In January 2018, after a three-day settlement conference with the trial court, the parties entered into a stipulation to resolve the entire matter and the settlement terms were recited in open court. Relevant to this appeal, the stipulation included the following provisions:
Wife had certain retirement benefits through the federal government commonly known as FERS ... for Federal Employees Retirement System. The parties will be equally dividing the community property portion of Wife's FERS retirement, with the exception that Wife had purchased some additional retirement benefit of service years based on her prior service in the military. Several years of that prior service in the military [were] during the marriage.
Husband is waiving his right to receive, in his share of the FERS retirement, those service credits that were for community property years from the military service.
The stipulation did not mention the retirement plan's benefits (basic pension, survivor, death), specific exclusion of any benefit from the equal division of the "Wife's FERS retirement", or waiver of either party's right to receive their community property share of any plan benefit. The trial court confirmed the parties understood the terms of the stipulation, were entering into the stipulation freely and voluntarily, and had adequate time to consult with counsel. The parties also agreed the court would retain jurisdiction to resolve any disputes.
Husband was directed to prepare a stipulated judgment and, over the course of several months, the parties unsuccessfully attempted to agree on a stipulated judgment. Ultimately, husband submitted for wife's approval a proposed stipulated judgment that largely mirrored the stipulation (the parties "[would] be equally dividing the community property portion of Wife's FERS retirement" other than the additional retirement benefit based on wife's prior service in the military), but also included a sentence awarding each party "any survivor's benefits ... related to their share of the community interest awarded to them."
This sentence also provided for an award to each party of "any death benefits" related to their share of the community interest. However, wife made no separate argument directed at the award of a death benefit either in the trial court or on appeal. Consequently, we do not further mention the death benefit except to give context to our decision.
Wife refused to sign the proposed judgment, and the parties proceeded to file separate requests asking the court to adjudicate their dispute regarding the survivor benefit and for entry of a stipulated judgment reflecting their respective views. Husband's proposed judgment included an award of a survivor benefit as an omitted asset under section 2556, which grants the court "continuing jurisdiction" to award community assets to the parties that have not been previously adjudicated by a judgment in the proceeding; if the court finds there was an omitted asset it is directed to "equally divide the omitted or unadjudicated community estate asset ..., unless the court finds upon good cause shown that the interests of justice require an unequal division of the asset." Wife asked the court to enter judgment based on the terms of the stipulation (thereby excluding any award for survivor benefits) and, in the alternative, sought an order setting aside the stipulation in its entirety. The parties lodged no objections when their requests were assigned to the same trial court judge who had conducted the settlement conference.
A. March 14 and April 3, 2019 Hearings
All further unspecified dates occurred in 2019.
On March 14, the trial court presided at a hearing concerning husband's request to award him a survivor benefit. Wife was represented by counsel and husband, an attorney, appeared in propria persona after the court granted his counsel leave to withdraw. Both parties testified concerning the settlement conference negotiations that led to the stipulation.
Husband testified that during negotiations no one – not the parties, either of their counsel, or the trial court – mentioned the issue of a survivor benefit. He was not aware of a survivor benefit or that there was any issue concerning a survivor benefit until his former counsel included it in the proposed stipulated judgment that wife then refused to sign. Wife never told him she wanted the survivor benefit solely for herself or that she wanted him to waive his right to a survivor benefit. Nor did husband's former counsel ever tell husband that wife wanted a survivor benefit "to go to ... [her] only."
Wife testified that she did not say anything during negotiations about a survivor benefit because she did not want husband to receive that benefit. During her private discussions with the trial judge, wife asked the court if husband had mentioned a survivor benefit. The judge replied she had not and asked if wife wanted the issue to be raised; she declined. Wife also did not tell her counsel to say that she wanted to keep the survivor benefit and did not want husband to share in that benefit. During the verbal recitation of the stipulation, wife did not mention anything about the survivor benefit. Wife believed that if the survivor benefit were not mentioned then husband's right to it would terminate upon entry of the judgment of dissolution.
Neither party lodged any objection to the wife's testimony concerning her ex parte discussion with the trial court during the settlement conference.
The trial court granted husband's request, directing that the judgment include a provision awarding each party a survivor and/or death benefit related to their community property share of the retirement plan under section 2610. The parties were directed to meet and confer and submit a stipulated judgment incorporating the terms of the agreement and the court's ruling regarding the survivor benefit (hereinafter "court-ordered stipulated judgment") at the next hearing on April 3.
On April 3, the trial court held a hearing to consider wife's alternative request to set aside the stipulation. The parties presented arguments but did not offer any additional evidence. The trial court denied wife's motion and wife was directed to sign and resubmit the court-ordered stipulated judgment within a few days.
B. May 15, 2019 Hearing
In early April, wife made handwritten changes to the court-ordered stipulated judgment and signed it as modified. Shortly thereafter, husband filed a motion for the court elisor to sign the court-ordered stipulated judgment, for $6,102 in attorney fees and $180 in costs, and for "section 271" sanctions for wife's repeated refusal to follow court orders and sign the court-ordered stipulated judgment. While the relevant Judicial Council forms direct a party requesting attorney fees to provide certain information concerning counsel's billing rates and the attorney's experience in the particular type of work, the record does not include any documents indicating husband provided such information to the court. Wife opposed husband's requests in full.
Both parties appeared in propria persona at the May 15 hearing. After the trial court found no basis to change its previous orders, wife complied with the court's direction that she sign the court-ordered stipulated judgment in open court. The court granted, in part, husband's request for attorney fees and costs, specifically awarding $180 (filing fees for two motions) in costs and $800 in reasonable "attorney fees" for husband's preparation for and attendance at that day's hearing. Wife made no objection to the award of attorney fees and costs.
The trial court entered a judgment of dissolution with several attachments, including the executed court-ordered stipulated judgment and a written order awarding husband the sum of $980 in attorney fees and costs "in sanctions." Wife's timely appeal ensued.
DISCUSSION
I. The Trial Court Rulings Regarding Division of Community Retirement Plan and Refusal to Set Aside Stipulation II. The Award of Attorney Fees was Improper
See footnote *, ante .
Section 271, subdivision (a), provides that "the court may base an award of attorney's fees and costs on the extent to which the conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys. An award of attorney's fees and costs pursuant to this section is in the nature of a sanction." " ‘ "Thus, a party who individually, or by counsel, engages in conduct frustrating or obstructing the public policy is thereby exposed to liability for the adverse party's costs and attorney fees such conduct generates ." ’ " ( Menezes v. McDaniel (2019) 44 Cal.App.5th 340, 348-349, 257 Cal.Rptr.3d 356 ( Menezes ), quoting In re Marriage of Tharp (2010) 188 Cal.App.4th 1295, [1318], 116 Cal.Rptr.3d 375 ; italics added.)
Wife argues the trial court erred in awarding attorney fees as a section 271 sanction since husband, while an attorney himself, had not in his role as litigant incurred any attorney fees related to the May 15 hearing. While this specific issue was not raised in the trial court, we address the issue on appeal as it is a question of law based on undisputed facts. ( Ward v. Taggart (1959) 51 Cal.2d 736, 742, 336 P.2d 534.)
We have not found a case that directly addresses whether a self-represented attorney litigant may recover attorney fees in the nature of sanctions under section 271. However, we agree with those courts that have concluded section 271 mandates that sanctions be "tethered" to attorney fees and costs. ( Menezes , supra , 44 Cal.App.5th at p. 350, 257 Cal.Rptr.3d 356 ; Sagonowsky v. Kekoa (2016) 6 Cal.App.5th 1142, 1153, 212 Cal.Rptr.3d 94 ( Sagonowsky ).) " ‘The plain language of section 271 authorizes the court to impose "attorney fees and costs" as a sanction for conduct frustrating settlement or increasing the cost of litigation.’ ... ‘Here, the words "attorney fees and costs" are not ambiguous.... Section 271 "means what it says" – sanctions available under the statute are limited to "attorney fees and costs." ’ " ( Menezes , supra , at p. 350, 257 Cal.Rptr.3d 356, quoting in part Sagonowsky , supra , at p. 1153, 212 Cal.Rptr.3d 94 ; see Menezes , supra , at p. 351, 257 Cal.Rptr.3d 356 [section 271 sanctions could not be awarded to a party for travel expenses to attend court hearings and vacation time, used for relief from work obligations, where expenses were not tethered to attorney fees and costs]; Sagonowsky , supra , at pp. 1153 fn. 9, 1156, 212 Cal.Rptr.3d 94 [section 271 sanctions could not be awarded to a party to punish the opposing party for relentless and culpable conduct, where monetary sum bore "no relationship" to attorney fees and costs].) The courts have similarly interpreted "attorney fees" – that it means exactly what it says – in the context of sanctions under Code of Civil Procedure section 128.7 and in the context of contractual attorney fees awarded under Civil Code section 1717. ( Musaelian v. Adams (2009) 45 Cal.4th 512, 515, 87 Cal.Rptr.3d 475, 198 P.3d 560 [Code of Civil Procedure " section 128.7 does not authorize sanctions in the form of an award of attorney fees to self-represented attorneys"]; Trope v. Katz (1995) 11 Cal.4th 274, 292, 45 Cal.Rptr.2d 241, 902 P.2d 259 ["an attorney who chooses to litigate in propria persona and therefore does not pay or become liable to pay consideration in exchange for legal representation cannot recover ‘reasonable attorney's fees’ under [Civil Code] section 1717 as compensation for the time and effort he expends on his own behalf or for the professional business opportunities he forgoes as a result of his decision"].)
Husband's sole assertion in opposition is that the trial court did not abuse its discretion in ruling that wife's conduct warranted a sanction. We do not reach that issue as the award of attorney fees as section 271 sanctions is not tethered to any attorney fees and hence cannot stand, irrespective of wife's conduct. Therefore, we shall reverse that portion of the judgment and order awarding $980 in sanctions and on remand direct the trial court to enter a new order awarding solely $180 in costs as sanctions.
While the trial court awarded $800 in attorney fees and $180 in costs at the May 15 hearing, its written order directed payment of $890 in attorney fees and $90 in costs. On remand the court will be able to correct its written order to reflect an award of $180 in costs as sanctions. (See In re Merrick V. (2004) 122 Cal.App.4th 235, 249, 19 Cal.Rptr.3d 490 ["[c]onflicts between the reporter's and clerk's transcripts are generally presumed to be clerical in nature and are resolved in favor of the reporter's transcript unless the particular circumstances dictate otherwise"].).
III. Husband's Motion for Sanctions on Appeal
See footnote *, ante .
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DISPOSITION
The portion of the judgment and order awarding $980 in attorney fees and costs as sanctions against Nancy G. Erndt and payable to Michael A. Terhorst is reversed. On remand the trial court is directed to enter a new order awarding $180 in costs as sanctions against Nancy G. Erndt and payable to Michael A. Terhorst. In all other respects the judgment is affirmed. Michael A. Terhorst's motion for sanctions on appeal is denied. Each party is directed to bear their own costs on appeal.
WE CONCUR:
Siggins, P.J.
Fujisaki, J.