Opinion
NOT TO BE PUBLISHED
APPEAL from a post judgment order of the Superior Court of San Diego County No. PN29390, Richard G. Cline, Judge. Reversed with directions.
HUFFMAN, Acting P. J.
Petitioner and appellant Van Hazewinkel (Van), as successor trustee of an amended survivor's trust that was part of a trust established by his late father and mother, Ben and Betty Hazewinkel (the trust), appeals a post judgment order awarding attorney fees and costs to objector and respondent Wanda Hazewinkel, his father's surviving second wife (Wanda). (Prob. Code, § 1002.) The subject judgment respecting the parties' disputes about the assets of the trust was affirmed in part and reversed in part by this court's unpublished opinion Hazewinkel v. Hazewinkel (May 29, 2009, D053321) (our prior opinion), which was filed a few months after this attorney fees and costs award was made.
To avoid confusion, we refer to the various parties by their first names.
Briefly, in our prior opinion, this court upheld the determination by the probate court that a certain trust transfer deed was ineffective, for lack of Wanda's consent, by which Ben had attempted to transfer to the trust all of his community interest in the community residence formerly lived in by Ben and Wanda (the residence). However, the remainder of the judgment was reversed for retrial of discrete issues on Wanda's trust beneficiary status. The record does not show the status of the retrial proceedings.
As trustee, Van has appealed the post judgment order awarding $153,591 attorney fees and $15,347.65 costs to Wanda, on the basis that the statutory and procedural predicates for that award were not fully established, either before or after our prior opinion was issued. (Fam. Code, § 1101, subd. (g); all statutory references are to this code unless noted.) Van first contends the probate court erred or abused its discretion in awarding attorney fees and costs, because Wanda should not at this time be deemed to be a prevailing party on the present record, in view of the partial reversal.
Van further contends that Wanda cannot show the specific requirements of section 1101, subdivision (g) were met here, for an award based on Ben's breach of fiduciary duty, because the record does not disclose that her own one-half interest in the community residence was "detrimentally impacted" or "presently impaired" when she raised her claim. (See § 1101, subd. (g).) Van has several theories why the trust transfer deed that Ben executed before his death, concerning his half-interest in the residence, may not have created an effective transfer, even if Ben breached a duty in doing so. Van also argues that apportionment of attorney fees should have been considered or is now appropriate, in the discretion of the probate court, because of the alternative legal theories pursued by Wanda and the effect of the reversal in part that was ordered by our prior opinion.
Finally, Van contends that nonstatutory costs should not have been awarded, and more importantly, the probate court abused its discretion in refusing to consider his motion to tax costs on the merits, based on its unsupported finding of untimeliness. (Cal. Rules of Court, rule 3.1700(b)(1).)
We agree with Van's contentions that the current award of attorney fees and costs is not supported by the record, and the entire request must be returned to the probate court for further proceedings that are consistent with the views expressed in this opinion. The court must now be given an opportunity to exercise its informed discretion in applying the fee statute, section 1101, subdivision (g), together with fiduciary duty damages rules and apportionment principles. Moreover, it was an abuse of discretion for the court to resolve the costs issues solely upon its overly technical view of the untimeliness of the motion to tax costs. We reverse the order with directions.
FACTUAL AND PROCEDURAL BACKGROUND
A
Previous Proceedings
We need not repeat the basic general facts as set forth in our prior opinion. We granted Van's request to take judicial notice of the underlying record on which our prior opinion was issued, and Van has provided portions of that record as part of the current record. (Cal. Rules of Court, rules 8.155(a), 8.252.) In particular, the underlying revised statement of decision and judgment are now included in this record, as well as portions of the reporter's transcript.
Originally, Van, as successor trustee to Ben, filed this trust proceeding under Probate Code sections 850 and 17200, to seek instructions regarding the claim of Wanda to status as a lifetime beneficiary of the amended survivor's trust. Van also sought an order establishing the trust's ownership of one-half interest in the residence. (Prob. Code, § 850, subd. (a)(3).) Ben died in 2006, shortly after he amended the trust, executed the trust transfer deed, and filed a petition for legal separation from Wanda.
As an objector, Wanda contended that she was entitled to beneficiary status under the trust, and that the trust transfer deed was invalid, for lack of her consent. (§ 1102.) After prevailing at the probate trial, Wanda was allowed to seek attorney fees and costs through separate motion proceedings, based in part on allegations that Ben had breached his fiduciary duties to her and Van had engaged in financial elder abuse. (§ 1101, subds. (a), (g); Welf. & Inst. Code, §§ 15657.5, 15610.30.)
In our prior opinion regarding the trust beneficiary status issues, we agreed with Van "that the trial court abused its discretion in excluding the extrinsic evidence offered about the circumstances of the making and amendment of the trust, which is ambiguous regarding Wanda's beneficiary status, and therefore its interpretation of the trust documents is incomplete and reversal is required. The judgment will be reversed with directions to conduct further proceedings admitting the extrinsic evidence and to include it in the interpretation of the trust documents." We then noted that the probate court had granted Wanda's request for attorney fees and costs, and such underlying order had been appealed by Van and was being separately considered (and is now before us). We said: "The effect of this opinion, once it becomes final and further proceedings on remand have been conducted, is not yet clear on the attorney fees issues.... However, the validity of the trust transfer deed of Ben's community interest in the Vista property must be separately resolved in this appeal, as we next discuss."
In the prior opinion, we then concluded that Wanda's claim to the trust's residence interest was proper, because "the trust transfer deed regarding Ben's community interest in that residence was invalid under these circumstances and is voidable at her election. The trial court's ruling was a correct reading of... section 1102. However, the remaining awards in the judgment related to trust beneficiary issues (monetary relief, reimbursement of attorney fees and costs, and accounting) necessarily are vacated and those issues are to be resolved upon remand in accordance with the current circumstances found by the probate court." Thus, in our disposition in the prior appeal, with regard to the trust transfer deed, the directions given to the probate court, upon remand, were to "confirm" its order regarding its invalidity.
B
Motion for Attorney Fees; Opposition and Motion to Tax Costs; Rulings; Objections
Before our prior opinion was filed in May 2009, the court had before it Wanda's July 2008 motion for an award of attorney fees and costs, and Van's opposition, which ultimately included Van's separate motion to tax costs. The record has been augmented to include tentative rulings from October and December 2008 hearings on those matters.
As will further be discussed in part III, post, after the original hearing, the court continued the matter sua sponte and allowed Wanda to file an amended costs memorandum, and allowed Van to file further opposition on the issue of costs. Van responded by filing a motion to tax costs, which the court ultimately found was untimely and denied in its entirety.
We next set forth the reasoning in the probate court's order on attorney fees, insofar as it relied on the provisions of section 1101 (remedies for a breach of fiduciary duty by spouse). It is first important to note that the reversal of the judgment on the trust beneficiary issues completely undermines any current entitlement to attorney fees that would have been based on allegations of financial elder abuse under Welfare & Institutions Code sections 15657 and 15610.30 (e.g., that Van's actions since Ben's death amounted to the financial abuse of an elder). The parties seem to concede that basis for fees need not be discussed here.
As relevant here, Wanda argued in the probate court that she was entitled to attorney's fees and costs because Ben breached his fiduciary duties to her by executing the trust transfer deed for the residence, without her consent, in violation of section 1102. In its order, the court first took note that "Wanda was the prevailing party in this action. Whether Wanda is entitled to her fees depends upon whether her case falls within an exception to the general rule that attorneys' fees in probate matters are not part of costs. (Estate of Bevelle (1947) 81 Cal.App.2d 720, 722.)"
The court then relied on section 1101, subdivisions (a) and (g) as providing remedies when a spouse's breach of fiduciary duty "results in impairment to the [other] spouse's present undivided one-half interest in the community estate, including, but not limited to, a single transaction or a pattern or a series of transactions, which transaction or transactions have caused a detrimental impact to the [other] spouse's undivided one-half interest in the community estate." (§ 1101, subd. (a).) The court said, "These remedies hinge on whether the breach of fiduciary duty displays fraud, malice, or oppression within the meaning of Civil Code section 3294. In the absence of fraud, malice, or oppression, subdivision (g) of Family Code section 1101 provides that the remedies ' "shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney's fees and court costs." ' " (Italics added.) (It is not disputed that the court impliedly found no fraud, malice, or oppression was present that would justify remedies under section 1101, subdivision (h).)
With respect to whether the predicate conditions for awarding such statutory remedies were satisfied, the court interpreted its previous statement of decision as follows. (See In re Marriage of Hokanson (1998) 68 Cal.App.4th 987, 992-993 (Hokanson).) That is, on page 10, lines 24-26 of the statement of decision, the court had specifically found that Ben had violated section 1102 by transferring community property without the consent of Wanda. The court believed that these were sufficient as specific factual findings that supported an award of attorney's fees and costs to Wanda, based on Ben's breach of his fiduciary duty to her. "From the foregoing, the court finds that Wanda has met the requirements under Family Code sec. 1101g for an award of attorneys' fees."
In addition to the (currently inapplicable) elder abuse issues, the court discussed whether equitable principles should separately support an award:
"All else failing, Wanda appears to be asking the court to award her attorney's fees based on principles of equity. In view of the court's findings above that Wanda is entitled to attorneys fees under Family Code 1101g and [elder abuse statutes], it is unnecessary to discuss the potential entitlement to attorneys' fees under equitable principles."
As noted, we will postpone discussion of the probate court's stated reasons for denying the motion to tax costs and for awarding Wanda all of her costs. (Part III, post.) In conclusion, Wanda was awarded attorney fees in the sum of $153,591, and costs of $15,347.45. Van's objections were denied and additional findings were refused ("the court finds that its [previous] order speaks for itself").
In February 2009, Van appealed. Our prior opinion was filed in May 2009.
DISCUSSION
To address Van's challenges to the order awarding Wanda all her attorney fees and costs, we first explain the legal effect of the disposition in our prior opinion, reversing in part for further proceedings. We then address the scope of the fees and costs issues that remain for decision, in light of Van's substantive and procedural arguments. We also set forth guidance for the exercise of discretion of the probate court in resolving these issues upon remand.
I
EFFECT OF PARTIAL REVERSAL ON AWARD OF FEES AND COSTS
When a judgment is reversed in full, the general rule is that all "incidental matters, proceedings, or claims based on the judgment are likewise nullified." (9 Witkin, Cal. Procedure (5th ed. 2005) Appeal, § 869, p. 929; Ryan v. California Interscholastic Federation-San Diego Section (2001) 94 Cal.App.4th 1048, 1082.) This includes prior awards of costs, which are considered to be incident to a judgment. (9 Witkin, Cal. Procedure, supra, at p. 929.)
However, this was not an unqualified reversal. A reviewing court may utilize Code of Civil Procedure section 43 to "direct a new trial or further proceedings to be had, " as to all or part of a judgment, thus reversing it in part and affirming it in part. "There is no definable limit to the directions that the court, within the scope of its appellate jurisdiction, may find convenient to the proper determination of the cause." (9 Witkin, Cal. Procedure, supra, Appeal, § 884, pp. 944-945.) As those authors further explain: "The test of partial reversal in an appeal from the whole judgment is the same as the test of the right to take a partial appeal, namely, severability. (See Gray v. Cotton (1913) 166 Cal. 130, 139..., ['[t]he practice of reversing a judgment in part only is well settled in this court... and should be followed where the error found to have been committed has affected the determination of but one or more of a greater number of distinct and severable issues or causes of action'....].)" (9 Witkin, Cal. Procedure, supra, Appeal, § 889, p. 950.)
In our case, we found the underlying judgment to be severable as to the separate theories on whether Wanda was entitled to beneficiary status under the trust, and whether the trust transfer deed was invalid. Our disposition severed the erroneously decided issues (the trust beneficiary questions) from the remainder.
In light of those principles, we evaluate our resolution of the previous appeal of the judgment, for purposes of analysis of the fees and costs award. We permitted "the trial court's determination of certain issues to stand but direct[ed] the retrial of a particular issue or issues. [Citation.]" (9 Witkin, Cal. Procedure, supra, Appeal, § 890, pp. 950-951.) We did not find the issue of the invalidity of the trust transfer deed to be so interwoven with the trust beneficiary issues that it could not be separately ruled upon, and upheld if correct, which it was. (Gonzales v. R. J. Novick Constr. Co. (1978) 20 Cal.3d 798, 805-806.) Thus, " '[in] order to be severable, and therefore [separately] appealable, any determination of the issues so settled by the judgment... must not affect the determination of the remaining issues whether such judgment on appeal is reversed or affirmed.... Perhaps another way of saying it would be that the judgment is severable when the original determination of those issues by the trial court and reflected in the judgment or any determination which could be made as a result of an appeal cannot affect the determination of the remaining issues of the suit....' [Citations.]" (Ibid.)
Although we directed the probate court to confirm its order that the trust transfer deed was invalid, and therefore precluded any retrial on that issue, the reversal essentially set the matter at large for retrial on the trust beneficiary issues (as well as elder abuse). The correct ruling on the invalidity of the trust transfer deed was severable from the portions of the judgment pertaining to the trust beneficiary issues, but that trust deed ruling, even though upheld, does not amount to an independently enforceable final judgment. Nor does it alone support the award of fees and costs, either procedurally or substantively, as we will further discuss in part II, post. Rather, the partial reversal sent the matter back for retrial on major issues in the case, and there is no existing final judgment. (Our record does not disclose the status of the retrial proceedings.) Therefore, Wanda cannot claim complete or partial prevailing party status for purposes of fees and costs, merely because the legal ruling on the trust transfer deed's invalidity survived Van's appeal, although further proceedings resulted.
Accordingly, the partial reversal on the merits has effectively caused the entire award of attorney fees and costs to fall, as incidental to the judgment. Since the probate court based its award on both of the major theories presented at trial, the trust beneficiary issue and the trust transfer deed issue, and its underlying resolution of one of those issues on the merits was reversed in part after the award was made, the entire award of attorney fees and costs is without legal support and has effectively been vacated. It was not possible for the probate court to make an informed exercise of discretion on entitlement to fees and costs, in light of the changed circumstances resulting from the partial reversal of the judgment.
As a practical matter, our next task is to provide guidance for the probate court in conducting further proceedings on Wanda's motion for attorney fees and costs, as opposed by Van, including his motion to tax her costs. We address those motions separately.
II
SCOPE OF WANDA'S ENTITLEMENT TO ATTORNEY FEES AND COSTS; PRINCIPLES ESTABLISHED BY PRIOR OPINION
A. Introduction
When the retrial on the trust beneficiary issues is concluded and judgment issued, the post judgment motion for attorney fees and costs may again be brought before the probate court for an informed exercise of its discretion in that respect, including prevailing party determinations. (Code Civ. Proc., § 1032.) We have no information on the status of the proceedings, and express no opinion on the outcome of the proceedings on the merits regarding the trust beneficiary issues. However, it is necessary to establish, for purposes of application of law of the case, the extent of any existing resolution of Wanda's claims about the trust transfer deed, for purposes of her attorney fee entitlement only. That is, the parties are disputing whether the probate court's finding, that Ben violated the provisions of section 1102 when he executed the deed, also established conclusively that he breached his fiduciary duty to Wanda and that section 1101, subdivision (g) therefore provides a mandatory remedy that includes an entitlement to attorney fees/costs.
Originally, Wanda raised questions about whether any fees award should be paid by trust assets, or whether Van should personally pay them. (See Chatard v. Oveross (2009) 179 Cal.App.4th 1098 (Chatard); Rudnick v. Rudnick (2009) 179 Cal.App.4th 1328 [probate court has discretion to charge attorney fees to trust assets or to a trustee or beneficiary's future trust distributions].) Because of our reversal on the trust beneficiary issues, no issues about whether Van breached his fiduciary duties as trustee have been resolved or are before us. We accordingly will examine the prior opinion and the record only to determine whether Ben's activities in 2006, violating the standards of section 1102 in transferring real property, created liability of trust assets specifically for Wanda's attorney fees, under section 1101, subdivision (g).
We will first inquire whether our prior opinion conclusively established Wanda met all the criteria for attorney fees entitlement under section 1101, subdivision (g), based solely on the ruling on the trust transfer deed issue, as confirmed. We look to the basic elements of a breach of fiduciary duty claim, and the statutory language, in light of the rules regarding law of the case.
We then set forth basic guidelines for the probate court's consideration of applications for attorney fees awards where, as here, different theories have been brought to trial, only some of which may give rise to an attorney fee entitlement. In some cases, the probate court may have a separate, non statutory equitable basis to assess attorney fees or costs, to a party or the trust. (Hollaway v. Edwards (1998) 68 Cal.App.4th 94, 99.) In any case, we conclude the issue of apportionment of fees according to the substantive issue concerned is clearly presented by this record, and has not been waived by Van. Finally, we address the ruling on Van's motion to tax costs (pt. III, post).
B. Criteria of Section 1101, Subdivision (g); Elements of Statutory Claim
Wanda claims in her respondent's brief that she was not relying on section 1101, subdivision (a) to seek attorney fees, but instead was relying on subdivision (g) of that section. However, those subdivisions must be read together, and in light of the fiduciary duty statutes (§§ 1100, 721) expressly mentioned in section 1101, subd. (g), to determine if all the statutory conditions for an award of attorney fees have been met. In section 1100, subdivision (e), fiduciary duties are expressly imposed upon spouses in the management and control of community personal property. Likewise, in section 721, general fiduciary relationships between spouses are imposed, including but not limited to providing access to financial records, relevant information, and benefits or profits from the transactions.
However, section 1102, concerning the management and control of community real property, does not expressly contain fiduciary duty provisions, but only precludes one spouse from conveying or encumbering community real property without consent. It is also noteworthy that the remedy and attorney fees language of section 1101, subdivision (g) does not expressly incorporate section 1102, in the manner that it does incorporate sections 721 and 1100.
The party requesting the statutory relief, as the aggrieved party, generally has the burden to show all of the required elements under the statute. (In re Marriage of Feldner (1995) 40 Cal.App.4th 617, 625.) Wanda is contending that the provisions of section 1102 amount to a statutorily specified fiduciary duty, and that its breach brings into play the remedy and attorney fees provisions of section 1101, subdivision (g), which provides as follows:
"Remedies for breach of fiduciary duty by one spouse, including those set out in Sections 721 and 1100, shall include, but not be limited to, an award to the other spouse of 50 percent, or an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty plus attorney's fees and court costs. The value of the asset shall be determined to be its highest value at the date of the breach of the fiduciary duty, the date of the sale or disposition of the asset, or the date of the award by the court." (Italics added.)
As just mentioned, section 1101, subdivision (g), incorporates certain general rules governing fiduciary relationships, as applicable to interspousal transactions in the management and control of personal property community assets, as stated in section 1100, subdivision (e). Section 721 generally describes the fiduciary duties existing between spouses concerning transactions between themselves and with third parties, in pertinent part: "[I]n transactions between themselves, a husband and wife are subject to the general rules governing fiduciary relationships which control the actions of persons occupying confidential relations with each other...."
To analyze whether the breach of section 1102 duties by Ben, in conveying his community real property interest without spousal consent, on its face must justify an attorney fees award under section 1101, subdivision (g), we first look to tort principles to analyze the scope of the statutory duty imposed by section 1102. In general, the elements of a cause of action for breach of fiduciary duty have historically included the showing of an existing fiduciary relationship, its breach, and damage proximately caused by that breach. (Pierce v. Lyman (1991) 1 Cal.App.4th 1093, 1101.)
With respect to breaches of fiduciary duty that result in impairment to a spouse's present undivided half interest in the "community estate, " section 1101, subdivision (a) establishes the specific elements of a statutory claim to recover from the other spouse (or estate, etc.). (Hokanson, supra, 68 Cal.App.4th 987, 992-993.) Thus, to prove a claim under section 1101, subdivision (a), the claimant spouse must show the other spouse's conduct that violated a statutorily specified fiduciary duty, on one or more occasions, (1) caused (or will cause) a detrimental impact to the claimant spouse's undivided one-half interest in the community estate, and (2) has resulted in present impairment to such interest at the time the claim is asserted. (Ibid.) Next, limitations periods are established by the statute (not implicated here; nor are any punitive damages issues presented here under subdivision (h)). Section 1101, subdivision (g) sets forth the remedies for such a spouse's breach of fiduciary duty.
It is not entirely clear whether section 1102 amounts to the kind of statutorily specified fiduciary duty discussed by the leading case, Hokanson, supra, 68 Cal.App.4th 987. Section 1102 does not use that term. To the extent the interpretation of statutory language is required, we review those issues of law independently, under a de novo standard. (In re Marriage of Terry (2000) 80 Cal.App.4th 921, 928-929, 937-938, fn. 6; Hokanson, supra, at p. 992.) We look first to the words of the statute, respecting their plain meaning. Whenever possible, we must give effect to every word in the statute and avoid a construction making a statutory term surplusage or meaningless. (Ibid.)
In the context of section 1101, subdivision (a), impairment of a spouse's "present" interest means at the time the claim is brought. "Present" means "now existing" and "not past or future." (Webster's 3d New Internat. Dict. (1993) p. 1793.) Section 1101, subdivision (a)'s phrase "including, but not limited to a single transaction or a pattern or series of transactions" is a statutory phrase of enlargement. (Dyna-Med, Inc. v. Fair Employment & Housing Com. (1987) 43 Cal.3d 1379, 1389 (Dyna-Med).) But even if such a transaction resulted in detrimental impact, it should not suffice to establish a claim unless the claimant spouse also shows impairment to his or her present undivided one-half interest in the community estate. (§ 1101, subd. (a).) This raises another question, was Ben's transfer, even if amounting to a statutorily proscribed breach of fiduciary duty, effective to impair or impact Wanda's one-half interest in the same residence? Was this completely resolved in our prior opinion, for purposes of establishing Wanda's entitlement to attorney fees?
C. Application of Rules; Law of the Case
Rules for application of the law of the case doctrine are set out in Bovard v. American Horse Enterprises, Inc. (1988) 201 Cal.App.3d 832, 841-842 (Bovard): "[W]here an appellate court states in its opinion a principle of law necessary to its decision, the principle becomes the law of the case for later proceedings, including appeals. [Citation.] The general rule is that the doctrine applies only to issues which were both presented and determined in a prior appeal. [Citation.] 'Where the particular point was essential to the decision, and the appellate judgment could not have been rendered without its determination, a necessary conclusion in support of the judgment is that it was determined. With respect to such a point, the appellate decision is law of the case even though the point was not raised by counsel or expressly mentioned.' [Citation.]"
To apply these rules, we ask whether the subject issue was essential to a determination of the first appeal, such as whether the record contained sufficient information to decide it at that time. (Bovard, supra, 201 Cal.App.3d at p. 842.) If not, the court in the first appeal could not have decided it on that record, nor could it have considered or expressed any views on the particular question. (Ibid.)
Here, the parties continue to dispute whether Wanda's community interest in the residence was actually damaged by Ben's actions in creating the trust transfer deed, and whether our prior opinion somehow recognized that the trial court had issued a binding ruling on all the elements of breach of fiduciary duty. In effect, Van contends that Wanda has not carried her burden of proof on her statutory claim for fees, by showing she suffered damage or impairment within the meaning of section 1101, subdivision (a) (that the violation of fiduciary duty "(1) caused (or will cause) a detrimental impact to the claimant spouse's undivided one-half interest in the community estate, and (2) has resulted in present impairment to such interest at the time the claim is asserted"). (See Hokanson, supra, 68 Cal.App.4th at pp. 992-995.)
In our prior opinion, we summarized our holding on the trust transfer deed issues as follows. To review the determination of the probate court that the trust transfer deed regarding Ben's community interest in the residence was invalid, we treated it as a legal issue presented upon undisputed facts. We interpreted the document and the applicable statutory provisions de novo. (Ghirardo v. Antonioli (1994) 8 Cal.4th 791, 799-801.) We then interpreted section 1102, subdivision (a), as requiring the consent of Wanda, during Ben's lifetime, for such a transfer to the trust. We reasoned that while Ben still lived, "he would have the power only to dictate the disposal of his one-half community interest in the Vista property by making a testamentary disposition. Until he died, the community still existed, and the terms of Family Code section 1102 accordingly required a consent from Wanda before his community interest in the family residence could be converted into his separate property interest, to be held in his survivor's trust. Otherwise, he would be 'conveying' his expectancy interest to the trust, and thereby unilaterally recharacterizing the Vista property (effectively, all of it) during the marriage."
We disagreed with a contrary argument by Van, that before the death of Ben, there was no meaningful or actual "transfer" of interest that adversely affected Wanda's community property rights in the residence. However, we noted that there were some unresolved issues of law remaining about possible theories that might be pursued at the retrial by Wanda to establish the nature of her interest in the residence. These included Wanda's intention to raise issues about a probate homestead, under Probate Code section 6250 et seq. (These issues are again briefed here.)
We also said, "[w]e question whether the body of law (not briefed by the parties), dealing with nonprobate community property transfers effective upon death, might conceivably apply to these undisputed facts. (§ 5010 et seq.) [¶] Although this point was apparently not litigated below, we could discuss it here as a pure issue of law on undisputed facts. However, the theory of trial should prevail, and the only issues before us concern the applicability of Family Code section 1102." We concluded that "Ben's unilateral provision for a nonprobate transfer of his community interest effective upon his death, by means of transfer to his survivor's trust, was ineffective for lack of Wanda's consent. As explained above, the issues regarding the trust beneficiary are subject to further proceedings upon remand. However, the trial court was correct in ruling as a matter of law that the trust transfer deed was ineffective without consent of Wanda, under Family Code section 1102, and that ruling may stand." (Italics added.)
Therefore, the disposition in the prior opinion reversed the judgment with directions to conduct further proceedings on the trust beneficiary issues including the interpretation of the trust documents; however, "with regard to the trust transfer deed, the trial court is directed to confirm its order regarding its invalidity." The remaining awards in the judgment that were related to the trust issues (monetary relief, reimbursement of attorney fees and costs, and accounting) were vacated, to be resolved upon remand in accordance with the current circumstances found by the probate court.
In a comparable situation, Hokanson, supra, 68 Cal.App.4th 987, such actual impairment of a spouse's community interest was found, justifying an award of attorney fees under section 1101, subdivision (g). There, the underlying issue was whether the wife's actions constituted a breach of fiduciary duty under section 1101. Those parties' judgment of dissolution had awarded to the wife a partial separate property interest in the couple's residence, and ordered her to sell it as soon as possible. (Id. at p. 990.) However, for more than a year, the wife refused to list the house at a realistic price in light of current market analyses, and she refused to drop the price. She also took the house off the market for periods of time and otherwise imposed constraints on the agent that made showing the house more difficult. (Id. at pp. 990-991.) The trial court concluded that the wife's conduct, contrary to the judgment's express directive that the house "be sold as expeditiously as possible for the best price reasonably obtainable, " constituted a breach of her fiduciary duties. (Ibid.) On appeal, that finding was not challenged, and the appellate court found that the trial court erred when it refused to award the husband attorney fees as a result of the wife's breach of fiduciary duty. (Id. at pp. 992-993.) The reason was that there was a proven monetary loss to the community, based on the wife's delay in selling the house. (Ibid.)
Hypothetically, a breach of fiduciary duty through an unconsented-to transfer could cause a detrimental impact to a spouse's undivided one-half interest in the community estate by reducing the value of the property as collateral, or by depriving the spouse of any profits from the property. An impairment of such an interest might result in costs incurred to void the encumbrance on the asset. (§§ 1101, subd. (a), 1102, subd. (a).) (See In re Marriage of Brooks and Robinson (2008) 169 Cal.App.4th 176, 183-192 [discusses section 1102 on title issues; no fiduciary duty issues raised].)
For purposes of a statutory fees entitlement under section 1101, subdivision (g), we do not read the above-quoted portions of our prior opinion as conclusively establishing all the elements of a breach of fiduciary duty cause of action, such as damage (or in the terms of section 1101, subdivision (a), that Wanda's own real property interests were "impair[ed]" and "detrimental[ly] impact[ed]"). Possibly, only a technical violation occurred, although it cannot be denied that much litigation expense has been incurred because of it. In any case, at this stage of the proceedings, there are still several unresolved issues of law about the actual impact upon Wanda's interests in the residence, through Ben's ineffective trust transfer deed. Other than incurring litigation expenses, it is not clear how Wanda's damages were sustained, as an element of a breach of fiduciary duty claim, as presented in this statutory cause of action.
We accordingly conclude that the subject issue, entitlement to fees under section 1101, subdivision (g), was not essential to a determination of the first appeal, because the record was not dispositive of that issue at that time. (Bovard, supra, 201 Cal.App.3dat p. 842.) It was not fully litigated or established within the criteria of section 1101, subdivision (a), regarding detrimental impact and present impairment of Wanda's interest, and awaits resolution upon remand. Whether statutory criteria have been met on undisputed facts is a question of law, but not all factual and legal issues have been resolved here. (See Walker v. Countrywide Home Loans, Inc. (2002) 98 Cal.App.4th 1158, 1169; People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 432.)
Moreover, we disagree with the probate court's interpretation of its previous statement of decision, as found in its order on fees and costs. In that order, the probate court said that page 10, lines 24 through 26 of the statement of decision was a specific factual finding that Ben had violated section 1102 by transferring community property without Wanda's consent, so that attorney's fees must be ordered for her under section 1101, subdivision (g). However, this statement of decision itself merely rules that the transfer was voidable at the election of Wanda, due to Ben's failure to obtain her consent. Although the probate court noted that hypothetically, the transferee could be a third person, rather than the trust, that was not the case here. (See In re Estate of Mitchell (1999) 76 Cal.App.4th 1378, 1390.) The ruling that the statute was "violated" does not amount to a specific finding on how Wanda's own real property interests were presently impaired and detrimentally impacted, such that damage resulted and fees must be ordered. (§1101, subds. (a), (g).)
Because of the nature of this dispute and the particular sequence of events here, including some unresolved factual and legal issues, we think it is necessary to return the whole attorney fee entitlement question under section 1101, subdivision (g) to the probate court, for the exercise of its discretion upon the requirements of the statute as shown under all the current circumstances.
D. Guidelines for Fees Motions upon Remand
We have interpreted this record to plainly establish that the trust transfer deed issue is severable from the remanded trust beneficiary issues (including elder abuse), for attorney fees purposes. In such a case, apportionment of any attorney fees award, by issue, should be appropriately available in the exercise of the probate court's discretion, as already requested by Van. This court in Bell v. Vista Unified School Dist. (2000) 82 Cal.App.4th 672, 686-687, set forth rules regarding apportionment, which should be considered in these further proceedings on either statutory or non statutory theories:
" 'When a cause of action for which attorney fees are provided by statute is joined with other causes of action for which attorney fees are not permitted, the prevailing party may recover only on the statutory cause of action. However, the joinder of causes of action should not dilute the right to attorney fees.' [Citation.]... [A]pportionment of fees and costs similarly rests within the sound discretion of the trial court [on statutory grounds]. [Citation.] " 'A trial court's exercise of discretion is abused only when its ruling " 'exceeds the bounds of reason, all of the circumstances before it being considered.' " [Citation.]' " [Citation.] Such fees need not be apportioned when incurred for representation on an issue common to both causes of action in which fees are proper and those in which they are not. [Citation.] Apportionment is not required when the claims for relief are so intertwined that it would be impracticable, if not impossible, to separate the attorney's time into compensable and non compensable units." (Ibid.)
Further, prevailing party determinations are appropriate when there is a statutory entitlement to fees, such as section 1101, subdivision (g). Here, it is as yet unclear whether Wanda will again prevail on the trust beneficiary issues, upon remand, or on her statutory fees theory, depending on her showing of damage. As explained in Heather Farms Homeowners Assn. v. Robinson (1994) 21 Cal.App.4th 1568, 1574, the trial courts need not utilize any rigid interpretations of the term " 'prevailing party' " but instead should analyze "which party had prevailed on a practical level." Such a ruling on prevailing party issues will normally be affirmed on appeal, absent an abuse of discretion. (Ibid.; Villa De Las Palmas (2004) 33 Cal.4th 73, 94 [to determine the identity of the prevailing party, the trial court may look to whether, on a "practical level, " that party "achieved its main litigation objective"].) Half of this overall dispute was remanded for retrial.
Whether a statutory fees and costs entitlement under section 1101, subdivision (g) is proven or not, the probate court may have the power to award attorney fees in the exercise of its broad equitable powers over a trust within its jurisdiction. (Estate of Ivey (1994) 22 Cal.App.4th 873, 883-885 [court exercises equitable powers pursuant to trust supervision to exempt prevailing beneficiaries from provisions of Code of Civil Procedure that would undermine their recovery of attorney fees].) As explained in Hollaway v. Edwards, supra, 68 Cal.App.4th 94, 99:
"This discretion derives not simply from judicial gloss, but from the Probate Code itself. For example, although Code of Civil Procedure section 1032, subdivision (b) entitles a prevailing party in ordinary civil litigation to costs as a matter of right, the probate court retains discretion to decide not only whether costs should be paid, but also, if they are awarded, who will pay and who recover them. (Prob. Code, § 1002.)"
At this time, we are dealing only with the consequences of Ben's actions, not Van's, because Wanda's claims against Van as trustee have been returned to the probate court for retrial. There are no issues before us concerning whether any attorney fees Wanda may be able to recover may be charged to the trust or to Van's interests in it. (See Chatard, supra, 179 Cal.App.4th 1098, 1113-1114: probate court may enforce an order, in an exercise of its equitable supervision over the trust, " 'independent of the statutory procedures applicable to ordinary judgment creditors.' [Citation.]"; see Rudnick v. Rudnick, supra, 179 Cal.App.4th 1328, 1334 [probate court can charge attorney fees to trust distributions or to the trust as a whole, in exercise of its equitable discretion].)
III
COSTS
A. Orders on Appeal
In the probate court's ruling regarding costs, it first stated that under the statement of decision, Wanda was deemed entitled to costs, but in her motion, she was seeking more than the costs ordinarily recovered under Code of Civil Procedure sections 1032 and 1033.5 (such as costs in connection with expert witness fees and "other" costs). She relied on Probate Code section 1002 to do so. Probate Code section 1002 states that "[u]nless it is otherwise provided by this code or by rules adopted by the Judicial Council, either the superior court or the court on appeal may, in its discretion, order costs to be paid by any party to the proceedings, or out of the assets of the estate, as justice may require."
The court then stated, "Wanda provides no authority for her apparent position that Probate Code § 1002 expands the list of allowable costs... set forth in CCP § 1033.5 nor was this court independently able to locate any." The main problem was that under Code of Civil Procedure section 1033.5, subdivision (b)(1), "[f]ees of experts not ordered by the court" are "not allowable as costs, except when expressly authorized by law."
The court next stated that contrary to Wanda's argument that Probate Code section 1002 provides an authorization for expert fees, etc., "§ 1002 simply authorizes a discretionary allocation of costs; it does not generally define allowable costs or specifically authorize an award of expert fees as costs in probate proceedings. Code of Civil Procedure section 1033.5, on the other hand, specifically defines costs to encompass only those expert witness fees of court-appointed experts." Thus, the court decided that "no costs can be awarded pursuant to Probate Code § 1002 which could not have been awarded [under] CCP § 1033.5(a)."
Nonetheless, the probate court proceeded to award all of the costs set forth in Wanda's separate amended memorandum of costs, on the separate basis that Van's motion to tax costs was denied for lack of timely filing. The court reasoned that California Rules of Court, rule 3.1700(b)(1), required Van's motion to tax costs to be served and filed within 15 days after service of the cost memorandum, but here, Van was a few days late, based on the date that Wanda had served and filed her amended memorandum of costs on September 23, 2008. The court overruled Van's later objections, and concluded that "Wanda is entitled to attorneys' fees in the sum of $153,591.00. Wanda is also entitled to costs in the sum of $15,347.45."
B. Discretion of Court; Analysis
The problem with the probate court's analysis is found in the exact sequence of events that took place after Wanda filed her original motion for fees and costs in July 2008. In August 2008, Van filed opposition to it. Pursuant to the probate court's September 4, 2008 tentative ruling, now provided in the record, the matter was continued on the court's own motion for about six weeks, with Wanda required to file an amended memorandum of costs and a worksheet, to more accurately reflect the amount of costs she was requesting. The court noted there were several defects in her original summary of her memorandum of costs (no amount indicated under "other costs" and no worksheet included, and some were not apparently allowable).
Thus, Wanda was given until September 25, 2008 to file her amended costs memo and worksheet. Van was given until October 9, 2008 to file any supplemental opposition on costs. However, Van responded with his motion to tax costs (served by mail on October 15 and filed October 17, 2008). It is not disputed that his same points and authorities on costs were filed at that time as he had previously filed in connection with the original motion. This procedure does not amount to any waiver of Van's substantive arguments on costs. Nor has Wanda shown prejudice to her that would warrant disposing of the motion on procedural grounds. (See Holloway v. Edwards, supra, 68 Cal.App.4th 94, 98-99 [special concerns in probate allow flexibility in handling costs matters].)
Under all the circumstances, we think it was not unreasonable for Van to frame his supplemental opposition as a motion to tax costs, in light of the previous court ruling that allowed Wanda to file an amended costs memorandum. Thus, the matter of costs was essentially trailing, and the court did not lack jurisdiction to set the next hearing for October 23 or to continue it to December 11, when the matter was actually heard. The probate court was already familiar with the substance of Van's opposition to costs, which raised statutory grounds and had previously been brought before the court, resulting in the filing of Wanda's amended memorandum of costs and leave for Van to file supplemental opposition on costs. Therefore, it was an abuse of discretion for the probate court on December 11 to deem untimely Van's motion to tax costs. It was not a new matter when filed, but amounted to supplemental opposition as allowed by the court, within the time granted for the next hearing, even though it was presented a few days later than requested. This was essentially a failure by the probate court to exercise discretion upon an adequate record provided to the court on a trailing matter, and a failure of this sort may be viewed as an abuse of discretion. (See In re Marriage of Gray (2007) 155 Cal.App.4th 504, 515.)
Based on this sequence of events, the probate court must be directed to hear and resolve the motion to tax costs on its merits, including consideration of not only Probate Code section 1002 but also the applicable Code of Civil Procedure rules on any prevailing party status, and allowable costs, following resolution of the matters remanded for retrial. (Code Civ. Proc., §§ 1032, 1033.5, subd. (a).)
DISPOSITION
The order awarding attorney fees and costs to Wanda is reversed in its entirety and the probate court is directed to hold appropriate further proceedings to resolve the statutory issues on the motions, in accordance with the views expressed in this opinion and the current circumstances of the case, including any resolution of the retrial on the trust beneficiary issues. Each party to bear its own costs on appeal.
WE CONCUR: HALLER, J. IRION, J.