Opinion
A156863
02-06-2020
In re the Marriage of TRACY HAYWARD and JOSE OSUCH. TRACY HAYWARD, Appellant, v. JOSE OSUCH, Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Napa County Super. Ct. No. 26-55470)
Tracy Hayward and Jose Osuch settled the dissolution of their marriage in 2017, signing a marital settlement agreement that was incorporated into the judgment of dissolution. The agreement provided that Tracy would pay Jose spousal support, and Jose, "at his sole cost and expense, may elect to obtain and maintain a life insurance policy insuring" Tracy's life. After an application for such life insurance was denied, Jose filed a request for a court order that Tracy provide an annuity or trust to secure the spousal support payments. Tracy objected to the request on the grounds that the marital settlement agreement precluded Jose from even making the request and that the request was an attempt to renegotiate spousal support without a showing of a material change in circumstances. The court bifurcated the issues, first considering whether the marital settlement agreement precluded it from considering Jose's request. It found that Jose's request for spousal support security was not barred by the agreement and entered an order to that effect. Tracy appeals that order. We dismiss her appeal, as the court's determination that Jose's request can proceed is a nonappealable order.
As is customary in marital dissolution actions, we refer to the parties by their first names.
BACKGROUND
This appeal arises out of a marital dissolution proceeding that commenced on February 16, 2011, with Tracy's filing of a petition for dissolution. In January 2017, Tracy and Jose reached a settlement, which they memorialized in a written marital settlement agreement (MSA). On January 24, the trial court entered judgment in the dissolution proceeding, incorporating the MSA into the judgment.
We are thoroughly familiar with the parties, their marriage, and the history of the proceeding, all of which we detailed in Hayward v. Superior Court (2016) 2 Cal.App.5th 10.
Section VII of the MSA—the section that governs spousal support—is at the heart of this appeal. As pertinent here, that section provides:
"A. Commencing January 1, 2017 and continuing on the first day of each month until June 30, 2018 or such time as all of the equalizing payments called for in Paragraph VI above have been paid in full, whichever occurs later, TRACY shall pay to JOSE as and for spousal support the sum of Twenty Thousand Dollars ($20,000.00) per month. Commencing July 1, 2018 or such time as all of the equalizing payments called for in Paragraph VI above have been paid in full, whichever occurs later, and continuing on the first day of each month thereafter, TRACY shall pay to JOSE as and for spousal support the sum of Fifteen Thousand Dollars ($15,000.00) per month. Nothing in this Agreement is intended to create or imply any finding under Family Code section 4320 and there shall be no presumption or inference in connection with any future modification proceedings that the amounts provided as spousal support in this paragraph are sufficient to allow JOSE to maintain the marital standard of living. [¶] . . . [¶]
"B. The amount of spousal support provided above shall be non-modifiable until July 1, 2018 or such time as all of the equalizing payments called for in Paragraph VI above have been paid in full, whichever occurs later. After July 1, 2018 or once the equalizing payment has been paid in full, whichever occurs later, the amount of spousal support provided for in this Agreement ($15,000 per month) shall be fully modifiable on showing of material change in circumstances. . . . Nothing in this paragraph is otherwise intended to change existing law concerning post-judgment modifications of spousal support. [¶] . . . [¶]
"D. TRACY's obligation to pay JOSE spousal support shall terminate upon the earlier of the death of either party or the remarriage of JOSE or further order of the court once support is modifiable as provided in Paragraph VII.B. . . . [¶] . . . [¶]
"E. As and for security for spousal support JOSE, at his sole cost and expense, may elect to obtain and maintain a life insurance policy insuring the life of TRACY. The policy is to be owned by JOSE. In the event JOSE elects to do so, TRACY shall reasonably cooperate with JOSE in order that he can obtain said life insurance policy."
On May 17, 2018, Jose filed a request for order (RFO), requesting that, pursuant to Family Code section 4360, the court order Tracy "to either (1) purchase an annuity for [Jose] or (2) establish a trust to provide for the support of [Jose], so that [Jose] will not be left without means of support in the event that the spousal support is terminated by" Tracy's death. In a supporting memorandum of points and authorities, Jose explained that section VII.E of the MSA authorized him to obtain a life insurance policy on Tracy's life, "based on the assumption that Tracy's life is insurable at a reasonable cost." As it turns out, he submitted, "Tracy's life is either not insurable or may be insurable but only at a prohibitive cost." Accordingly, he had attempted to communicate with Tracy to discuss possible alternative solutions for obtaining security for her spousal support obligation, including an offer "to solve the issue by amending the spousal support order so it is payable after Tracy's death, which would give Jose a claim for support against her estate," a solution that, he claimed, "would resolve the issue at virtually no cost to Tracy or Jose, unlike the alternatives that are authorized by the Family Code . . . ." According to Jose, however, his efforts had been met with "complete silence." He was therefore requesting that the court order Tracy to secure his spousal support by one of the means authorized by section 4360, as purportedly contemplated by the judgment. He also sought attorney fees pursuant to sections 271 and 2030.
Section 4360 provides:
"(a) For the purpose of Section 4320, where it is just and reasonable in view of the circumstances of the parties, the court, in determining the needs of a supported spouse, may include an amount sufficient to purchase an annuity for the supported spouse or to maintain insurance for the benefit of the supported spouse on the life of the spouse required to make the payment of support, or may require the spouse required to make the payment of support to establish a trust to provide for the support of the supported spouse, so that the supported spouse will not be left without means of support in the event that the spousal support is terminated by the death of the party required to make the payment of support.
"(b) Except as otherwise agreed to by the parties in writing, an order made under this section may be modified or terminated at the discretion of the court at any time before the death of the party required to make the payment of support."
All undesignated statutory references are to the Family Code.
Jose's RFO was supported by a declaration of his attorney Vanessa K. Wills, who testified to the following: Wills sent Tracy's attorney Keith Dolnick a life insurance application for a USAA policy, which application Tracy submitted directly to USAA. After Jose received a denial letter from USAA, Wills reached out to Dolnick requesting that they meet and confer about Jose's need for security for spousal support. Dolnick did not respond to that communication or two subsequent ones making the same request.
On July 5, Jose filed another request for order, this one seeking to compel Tracy to provide further responses to a request for production of documents (motion to compel). The request for production sought documents relating to Tracy's personal and business finances, including her personal financial and tax records and financial records for two businesses. Jose claimed the documents were relevant to the issues raised in his RFO and complained that rather than responding to the document request, "Tracy chose to shirk her discovery obligations with an objection-only response and did not produce a single document." He thus sought an order directing Tracy to produce the requested documents and sanctioning her in the amount of $8,025 pursuant to Code of Civil Procedure section 2031.310, subdivision (h).
On July 31, Tracy filed opposition to Jose's motion to compel. She objected that his discovery request was "unnecessary and improper" for multiple reasons, including that it was premature because he was "seeking information that is not relevant to the Court's interpretation of whether spousal support security is mandated," and "the language of the MSA and judgment unambiguously say that spousal support security is not mandatory, and to the extent Jose pursues it, he is required to pay, not Tracy . . . ." She urged the court to defer discovery until after it determined whether the MSA permits Jose to seek spousal support security. Lastly, Tracy sought attorney fees, costs, and sanctions under Code of Civil Procedure section 2023.030, subdivision (a).
In a reply filed on August 6, Jose disputed that his discovery request was premature, arguing that "it would be improper for a court to condition a litigant's discovery rights on the likelihood that they will prevail on the very issue for which discovery is sought." And, he reiterated, the requested discovery was relevant to the issue of spousal support security since "Tracy's wealth—which is many times over than that of Jose—is needed to evaluate the options for security." Jose further submitted it was relevant because the court was required to consider Tracy's financial circumstances when ruling on his request for fees and sanctions.
On August 15, Jose's motion to compel came on for hearing. After lengthy argument, the court deferred ruling on the motion until after the spousal support security issue had been decided. And as to that issue, the court ordered a bifurcated proceeding, with the first phase to address whether the MSA precluded the court's consideration of Jose's RFO. As the court put it, "[T]his is an unusual situation given the marital settlement agreement, and, for that reason, the Court will defer ruling on [the motion to compel] until after the hearing. [¶] The hearing will be to determine whether or not the settlement agreement precludes the court from making an order under [section] 4360 and what other arguments you all want to make with respect to that, whether—the Court may, nonetheless, may still make a ruling under [section] 4360."
On November 14, Jose filed an amended RFO, adding an additional form of relief to that requested in his initial RFO. Specifically, he requested that if the court denied the relief requested in his initial RFO (an annuity or a trust to secure the spousal support), then it should order Tracy to complete a " 'Time Saver' " form and return it to a third party, who would then notify Tracy's and Jose's counsel "whether any life insurance carriers have invited [Tracy] to submit a formal application for life insurance in response to the Time Saver form." Jose went on to suggest details governing how he would then procure life insurance, noting that the third party would be subject to HIPAA laws to protect Tracy's private and confidential information.
The third party was a wealth advisory firm that provides insurance services in addition to financial planning services. --------
On November 27, Tracy filed opposition to Jose's RFO. She argued that the MSA did not require spousal support security, as it merely provided that Jose " 'may elect to obtain' " a policy on her life and required her to " 'reasonably cooperate' " with him in the event he attempted to obtain such a policy; his inability to procure a life insurance policy was "a product of his own greed" by seeking a policy in the "staggering amount" of $2,000,000; and his RFO was an attempt to renegotiate the MSA's spousal support provision without a showing of a material change in circumstances. In a supporting declaration, Tracy stated that she had complied with the terms of the MSA and corresponding judgment by completing a life insurance application at Jose's request more than a year earlier. Finally, she requested that, pursuant to section 271, the court order Jose to pay at least $35,000 of the more than $70,000 in attorney fees she had already incurred in connection with this dispute.
On December 7, Jose filed a reply in support of his RFO. He disputed he was attempting to renegotiate the MSA and contended that his inability to obtain an insurance policy on Tracy's life was a change in circumstances that warranted modification of the spousal support provision in the MSA. He argued that without a court order providing the requested relief, he would have no security for the spousal support he is due, which would be contrary to the judgment and the purpose of section 4360. He urged the court to order an annuity or trust to secure his spousal support, noting that Tracy would not "cooperate with the process necessary to determine whether or not she is insurable at a reasonable cost," and had ignored his alternative proposal that "the Judgment be modified so that Tracy's obligation to pay support would not be terminable upon her death, which would enable him to seek support from Tracy's estate."
Jose also reiterated his request for attorney fees, which had now reached over $55,535. As to Tracy's request for fees under section 271, he argued the court should defer ruling on the request until it had resolved the issues raised in his RFO and his section 2030 fee request.
On February 8, 2019, the court heard lengthy argument on the preliminary question of whether the MSA precluded Jose from bringing his request for spousal support security. At the conclusion of the hearing, the court ruled that Jose's RFO could proceed under section 4360, and on March 19, it entered its findings and order after hearing, which in pertinent part provided:
"[Jose's] Request for Order, filed May 17, 2018 and amended November 14, 2018, requested, among other items of relief, that [Jose] be provided with security for spousal support pursuant to Family Code § 4360.
"At a hearing on [Jose's] Motion to Compel Discovery, which took place on August 15, 2018, the Honorable Cynthia Smith ordered a preliminary issue to be determined first: Whether or not the Marital Settlement Agreement, which was incorporated into the Judgment filed January 24, 2017, precludes the Court from making an order for security for spousal support under Family Code § 4360.
"The Court having reviewed the moving, responding and reply papers, and after considering the arguments of counsel at the time of the hearing issues the following Order:
"1. The language and provisions of the Marital Settlement Agreement incorporated into the Judgment filed January 14, 2017, does not preclude the Respondent, Jose Osuch, from seeking, nor does it preclude the Court from issuing, an order for security for spousal support under Family Code § 4360.
"2. The Court's determination of the issue in paragraph 1 above is without prejudice to either parties' position on whether or not the Court should modify the provisions of the Judgement filed January 24, 2017 with respect to security for spousal support or make any other orders requested by either party, which issues are reserved for further hearing."
On March 26, Tracy filed a notice of appeal.
THE ORDER IS NONAPPEALABLE
By this appeal, Tracy seeks reversal of the trial court's order allowing Jose to pursue an order for spousal support security under section 4360. Jose contends, among other things, that Tracy's appeal is premature and should be dismissed because the court's March 19 order that his RFO was not barred by the MSA is an interlocutory order and is thus nonappealable. He is correct. In re Marriage of Ellis (2002) 101 Cal.App.4th 400 (Ellis) is on point and compels us to dismiss the appeal.
In Ellis, supra, 101 Cal.App.4th 400, the trial court entered a final judgment on dissolution of a marriage, reserving jurisdiction over whether there was a community property interest in a medical subsidy available to the husband upon his retirement. After the wife later requested a hearing on this reserved issue, the court ordered a bifurcated proceeding, with the issue of whether there was a community property interest in the subsidy to be decided first, and the issue of its amount, which would require discovery and expert witnesses, to be decided second. After a hearing, the court found there was a community property interest in the subsidy and set a date for a hearing on the value of that interest. The husband appealed that order. (Id. at pp. 402-403.)
The Court of Appeal held that the order was nonappealable. (Ellis, supra, 101 Cal.App.4th at p. 403.) Its explanation is fully applicable here:
"Although Code of Civil Procedure section 904.1, subdivision (a)(2) makes appealable 'an order made after a judgment made appealable by paragraph (1),' this does not literally mean that any order after a previous judgment is appealable. To be appealable, a postjudgment order must meet certain requirements. (Lakin v. Watkins Associated Industries (1993) 6 Cal.4th 644, 651-652.) Some postjudgment orders are not appealable because, 'although following an earlier judgment, [they] are more accurately understood as being preliminary to a later judgment, at which time they will become ripe for appeal. [¶] . . . [¶] . . . [Such postjudgment orders lack] finality in that they [are] also preparatory to later proceedings.' (Id. at pp. 652, 653.) This rule was applied in a marital dissolution context in In re Marriage of Levine (1994) 28 Cal.App.4th 585. After a judgment of dissolution, a dispute arose concerning compliance with a guarantee in the judgment that the husband would receive a certain amount from the sale of various assets. In a postjudgment order the trial court held it had authority to do certain acts to resolve that dispute. The husband appealed, but the Court of Appeal dismissed the appeal because, pursuant to Lakin, supra, the order was not sufficiently final and was merely preliminary to the actual resolution of the dispute. (In re Marriage of Levine, supra, 28 Cal.App.4th at p. 589.)
"Similarly here, the order determines that the trial court has authority to evaluate and divide the medical subsidy, but it is only preliminary to actually doing so. The order could be reviewed upon appeal from the subsequent final judgment on reserved issue that actually divides the asset. In other words, this purported appeal is an 'interlocutory' appeal, which normally is not permitted." (Ellis, supra, 101 Cal.App.4th at p. 403; accord, In re Marriage of Olson (2015) 238 Cal.App.4th 1458, 1462 (Olson); see generally Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2019) ¶¶ 2:153.2-2:153.8, pp. 2-95 to 2-96.)
As in Ellis, supra, 101 Cal.App.4th 400, the cases cited there, and Olson, supra, 238 Cal.App.4th 1458, the court's order here that the MSA did not preclude its consideration of Jose's RFO is preliminary to the court deciding the merits of the RFO. As such, the order is not "sufficiently final" and is nonappealable. (Olson, supra, 238 Cal.App.4th at p. 1462; see also Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs, supra, ¶ 2:153.2, p. 2-95 ["order itself must be 'sufficiently final' "].)
As Jose notes, and as the Ellis court also recognized (Ellis, supra, 101 Cal.App.4th at pp. 403-404), the Family Code sets forth a limited exception to the above-discussed rule. Section 2025 provides: "Notwithstanding any other provision of law, if the court has ordered an issue or issues bifurcated for separate trial or hearing in advance of the disposition of the entire case, a court of appeal may order an issue or issues transferred to it for hearing and decision when the court that heard the issue or issues certifies that the appeal is appropriate. Certification by the court shall be in accordance with rules promulgated by the Judicial Council." California Rules of Court, rule 5.392 then sets forth very detailed procedures for obtaining appellate review of a bifurcated issue, including the trial court's issuance of a certificate that there exists probable cause for immediate appellate review of the issue (id., (b), (c)) and the Court of Appeal's granting of a party's motion to appeal the bifurcated issue. (Id., (d)-(f).) These procedures were not followed here.
Finally, while we have the discretion to treat the appeal as a petition for an extraordinary writ (see, e.g., Ellis, supra, 101 Cal.App.4th at p. 404; Olson, supra, 238 Cal.App.4th at p. 1462), we believe that is unwarranted under the circumstances here and decline to do so.
DISPOSITION
The appeal is dismissed as taken from a nonappealable order. Jose shall recover his costs on appeal.
/s/_________
Richman, J. We concur: /s/_________
Kline, P.J. /s/_________
Stewart, J.