Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Tulare County. No. VFL 08-229445 Jennifer Conn Shirk, Judge.
Dale J. Hatherley for Appellant.
Luke & Barron and Linda A. Luke for Respondent.
OPINION
Poochigian, J.
STATEMENT OF THE CASE
On August 25, 2008, respondent Timothy E. Dickey (Timothy) filed a petition for dissolution of marriage to appellant Cheryl Dickey (Cheryl) in Tulare County Superior Court. Timothy alleged a marriage of 40 years 1 month and the fact there were no minor children. He requested dissolution of marriage based upon irreconcilable difference (Fam. Code, § 2310, subd. (a)) and sought a determination of property rights.
On April 21, 2009, the court filed a judgment of dissolution effective that date. The court ordered a division of property as set forth in an attached marital settlement agreement (MSA) between Timothy and Cheryl.
The community estate consisted of an encumbered home, household furnishings, two vehicles, United States Savings Bonds, Timothy’s AT&T Retirement Savings and Security Plan, a community interest in Timothy’s AT&T Pension Benefit Plan, clothing, jewelry, and personal effects, an interest in several business enterprises, cash and accounts, an encumbered shed building, and 2008 state and federal income tax refunds.
On that same date, the court filed a qualified domestic relations order (QDRO) granting Cheryl a separate partial interest in Timothy’s vested accrued benefit in an AT&T Pension Benefit Plan.
On June 16, 2009, after her receipt of an explanatory letter from Fidelity but prior to receipt of a monetary distribution, Cheryl moved to compel compliance with the judgment and for attorney fees and costs. She specifically requested that Timothy pay her the sum of $4,686.27 to equalize the spousal support buyout set forth in the judgment upon MSA.
The letter, dated May 21, 2009, set forth the methodology and values used by Fidelity to calculate Cheryl’s QDRO award “using the marriage dissolution date of July 18, 2008 and a Benefit Commencement Date (BCD) of June 1, 2009.”
On July 21, 2009, Timothy filed a responsive declaration requesting an order that he be deemed in compliance with all terms of the judgment and that the parties bear their respective costs and attorney fees.
On July 31 and August 7, 2009, Cheryl filed a reply and supplemental declarations.
On August 7, 2009, the court conducted a contested hearing on the motion to compel compliance with judgment and continued the matter. The court ordered Cheryl’s counsel to contact Fidelity and obtain a Benefit Modeling Statement (BMS) for Timothy as of September 1, 2009.
According to Cheryl, “[t]he parties, the attorneys, and the mediator relied upon [Timothy’s] August 21, 2008 Benefit Modeling Statement [BMS] regarding his AT&T Pension Benefit Plan … in order to arrive at the contemplated additional $40,000.00 spousal support buyout. [Citation.] That statement showed [Timothy’s] Lump Sum payment option to be worth $405,208.10.” The statement also showed a single life annuity monthly payment of $2,604.12 to the Plan participant. The court subsequently ordered Cheryl’s counsel to obtain a BMS for Timothy’s pension as of September 1, 2009. The latter statement, dated August 25, 2009, reflected larger dollar amounts, i.e., a lump sum payment option of $424,456.80 and a single life annuity monthly payment of $2,644.65. At the August 7, 2009 hearing, Timothy advised the court he had contacted Fidelity prior to the judgment of dissolution and asked for their calculation of retirement benefits based on three potential retirement dates--December 31, 2008, April 1, 2009, and June 30, 2009. Timothy explained to the court: “[T]here was a definite difference, an actual improvement in my pension plan by staying in the year 2009.”
On October 13, 2009, the superior court filed a ruling denying Cheryl’s request to compel compliance noting: “The only evidence is that Wife made a poorly researched election which resulted in a significant loss to her. Wife’s actions were solely at her discretion.” Based upon a disparity of income between Timothy and Cheryl and the fact there was a legitimate issue with respect to the monetary discrepancy, the court ordered Timothy to pay Cheryl’s attorney the sum of $750 in fees at the rate of $75 per month.
On October 20, 2009, Cheryl filed a motion to set aside the judgment (Code Civ. Proc., § 473, subd. (b)) because the spousal support buyout was based upon an incorrect assumption. On October 30, 2009, Cheryl filed a new motion to set aside judgment (Fam. Code, §§ 2120, et seq.).
Wife’s first motion to set aside was based on Code of Civil Procedure section 473, subdivision (b) and second motion to set aside was based on Family Code section 2120 and companion statutes. This was apparently due to considerations of time. Under Code of Civil Procedure section 473, subdivision (b), application for relief “shall be made within a reasonable time, in no case exceeding six months, after the judgment … was taken.” Under Family Code section 2121, subdivision (a), a court in proceedings for dissolution of marriage may relieve a spouse from a judgment adjudicating support or division of property after the six-month time limit of Code of Civil Procedure section 473 has run. (In re Marriage of Rosevear (1998) 65 Cal.App.4th 673, 684-685.)
On November 10, 2009, Timothy filed a responsive declaration opposing the motion to set aside judgment and seeking reasonable attorney fees as sanctions (Fam. Code, § 271).
On November 17, 2009, Cheryl filed a reply declaration asserting that the parties, their counsel, and their mediator were all mistaken as to how Timothy’s pension plan would be divided.
On November 25, 2009, the court denied Cheryl’s motion to set aside judgment under Code of Civil Procedure section 473, subdivision (b) and motion to set aside judgment under Family Code sections 2120 et seq. The court also reduced the October 13, 2009, order of attorney fees to the sum of $150.
On December 11, 2009, Cheryl filed a timely notice of appeal from the rulings of October 13 and November 25, 2009.
An appeal may be taken from an order made appealable by the provisions of the Family Code. (Code Civ. Proc., § 904.1, subd. (a)(10)). Generally, a judgment that leaves no issue to be determined except the fact of compliance with its terms is appealable. (Sullivan v. Delta Air Lines, Inc. (1997) 15 Cal.4th 288, 304.) Here, Cheryl did not appeal from the judgment. Rather, she appealed the October 13, 2009, ruling on motion for modification of judgment and the November 25, 2009, ruling on submitted issues (Code Civ. Proc., 473, Fam. Code, §§ 2120 et seq.). As to the denial of modification, a postjudgment order which relates to the enforcement of a judgment is appealable so long as the appeal involves issues other than those decided by the judgment. (In re Marriage of Wilcox (2004) 124 Cal.App.4th 492, 497.) An order denying a statutory motion to vacate the judgment under Code of Civil Procedure, section 473 is appealable as an order after judgment. (Prieto v. Loyola Marymount University (2005) 132 Cal.App.4th 290, 294, fn. 4.) Generally, the denial of a motion to vacate a judgment in a family law matter is not an appealable order. However, exceptions have been recognized where the judgment appealed from is void. (In re Marriage of Brockman (1987) 194 Cal.App.3d 1035, 1040.) Similarly, appellate courts have reviewed orders on motions to vacate judgments under Family Code sections 2120 et seq. (E.g., In re Marriage of Rosevear, supra, 65 Cal.App.4th at p. 681; In re Marriage of Varner (1997) 55 Cal.App.4th 128, 138.)
STATEMENT OF FACTS
Cheryl and Timothy married on February 28, 1969, and separated on July 18, 2008. Timothy filed a petition for dissolution of marriage and attached a list of community assets and debts, including an AT&T Savings Plan and an AT&T Pension Plan. Timothy and Cheryl submitted the dissolution action to mediation and, with their attorneys, executed a preliminary settlement agreement (SA) on April 7, 2009. The agreement stated: “[T]his agreement is binding and final even though it may take several weeks for a formal judgment to be prepared. This is a full and complete settlement of this case.” An attachment to the SA stated in relevant part:
Cheryl states in her opening brief: “The parties attended mediation with retired Judge Howard Broadman on April 7, 2009 for the purpose of settling their dissolution of marriage action. [Citation.] The parties were able to reach a full agreement in mediation, which was then incorporated into a Marital Settlement Agreement (which itself was incorporated into the Judgment for Dissolution of Marriage filed on April 21, 2009.” In a declaration filed October 20, 2009, Cheryl’s counsel related certain statements and proposals made by all those who participated in the April 7, 2009, mediation with retired Judge Howard Broadman.
“4) In addition to her 1/2 of Tim’s AT&T Pension, Cheryl to receive an additional $40,000.00 from Tim’s 1/2 of his Pension, calculated as [of] July 18, 2008, date of separation.
“5) Both parties permanently and irrevocably waive the right to receive spousal support in this matter, effective March 31, 2009.”
In a pleading filed in the superior court, Cheryl explained the reasoning behind this arrangement:
“8. Since [Timothy] and I did not have savings sufficient to enable him to make [a spousal support] buyout, we agreed that I would take a disproportionate amount of his retirement plan through AT&T. Both of our attorneys calculated the disproportionate amount of his retirement by determining what percentage of his retirement would be necessary in order to provide me with an additional $40,000.00. AT&T had provided us with [an August 21, 2008] valuation of [Timothy’s] retirement which reflected a value of $405,208.10 as of approximately the date of separation.… Dividing the retirement in half would have resulted in each of us being awarded $202,604.05. In order to award me $40,000.00 more, or $242,604.05, the attorneys increased my percentage of [Timothy’s] retirement plan from 50% to 60%. 60% of $405,208.10 is $243,124.86, which would have been sufficient to provide me with the $40,000.00 buyout.”
In April 2009, Cheryl, Timothy, and their respective counsel executed a formal MSA. Pursuant to that agreement, Cheryl and Timothy each received a one-half interest in Timothy’s AT&T Retirement Savings and Security Plan. Cheryl received 60 percent of the community interest in Timothy’s AT&T Pension Benefit Plan (Plan) and Timothy received 40 percent of the community interest in the Plan.
The MSA explained the unequal distribution of interests in the Plan as follows:
“EIGHTH: Each party acknowledges that he or she is under no obligation to waive his or her right to receive spousal support in this matter. Husband, however, is possessed of sufficient skills and work experience to be self supporting. Accordingly, Husband hereby agrees to waive and does hereby waive his right to receive spousal support in this matter.
“In consideration for receipt of Forty Thousand Dollars ($40,000.00) from Husband’s share of his AT&T pension, calculated as of the parties’ July 18, 2008, date of separation, Wife agrees to waive and does hereby waive her right to receive spousal support in this matter, effective March 31, 2009. Said sum shall be paid to her by an unequal division of the AT&T pension by a Qualified Domestic Relations Order.
“Each party acknowledges that he or she understands that his or her waiver of spousal support in this matter is permanent and irrevocable. That is, neither party may, at any time, under any circumstances, apply to the Court for an order granting him or her spousal support in this matter. The Court shall be without jurisdiction to award spousal support to either party in this matter. [¶] … [¶]
“THIRTEENTH: The parties have agreed to this Marital Settlement Agreement based on appraisals obtained by them, or their own best judgment as to values. Both parties agree that the division as set forth in this Agreement may not be substantially an equal division of the property, but that this stipulated Marital Settlement Agreement is a fair and equitable distribution of the property and a fair and just settlement of this matter. Each party releases his or her attorney from liability for not obtaining appraisals. Each party waive[s] the right to receive a mathematically equal one-half of the community estate.”
The MSA was attached to the judgment of dissolution filed April 21, 2009, and incorporated into the judgment by reference.
Cheryl, Timothy, and their counsel signed the QDRO referenced in their MSA during the month of April 2009. The court signed and filed the QDRO on April 21, 2009, the same filing date as that of the judgment of dissolution. The QDRO stated, in pertinent part:
“7. This Order is intended to award [Cheryl] the Alternate Payee a separate interest in the Participant’s [Timothy’s] vested accrued benefit [in the AT&T Pension Benefit Plan].
“8. The Alternate Payee is entitled to 60% of the Participant’s accrued benefit between the date of marriage and the date of separation/divorce.
“9. The Alternate Payee may select from the forms of benefit available in the Plan (other than a joint survivor annuity with his or her subsequent spouse) at the time that the Alternate Payee is eligible and elects to commence the benefit.
“10. The payments to the Alternate Payee may commence at the Earliest Time Permitted by the Plan. [¶] … [¶]
“14. Pursuant to the terms of the Plan, the Participant’s benefit is calculated based on the Participant’s normal retirement age. The Alternate Payee’s award will be adjusted for the Alternate Payee’s age and life expectancy at commencement of the benefit, and the applicable benefit form option, in accordance with the actuarial assumptions set forth in the Plan. If the Alternate Payee elects to start receiving benefits before the Participants normal retirement age, the Alternate Payee’s award will be [actuarially] reduced to account for such early commencement.
“15. The Alternate Payee is not entitled to any early retirement subsidy.
“16. The Alternate Payee is not entitled to a share of cost of living adjustments. [¶] … [¶]
“18. The Court shall retain jurisdiction with respect to this Order to the extent required to maintain its qualified status and the original intent of the parties as stipulated herein.
“19. In case of a conflict between the terms of this QDRO and the terms of the Plan, the terms of the Plan will prevail.”
On May 5, 2009, Fidelity Investments Institutional Operations Company, Inc. (Fidelity), acting on behalf of the Pension Plan Administrator, issued a letter finding the court’s order to be “ ‘qualified’ ” under the Internal Revenue Code. The letter indicated Cheryl had been assigned 60 percent of Timothy’s benefit accrued between February 28, 1969, and July 18, 2008. The letter confirmed that Cheryl’s award would commence no earlier than Timothy’s “earliest retirement age” as defined by the Plan and that she would receive that benefit for the duration of her lifetime.
On May 21, 2009, Fidelity transmitted a letter to Cheryl explaining the methodology and values used to calculate her QDRO award, using the marriage dissolution date of July 18, 2008, and a Benefit Commencement Date (BCD) of June 1, 2009. According to Fidelity’s calculations, Cheryl was entitled to a BCD lump sum of $211,882.39, rather than the lump sum of $243,124.86 she had originally anticipated.
On June 16, 2009, Cheryl moved to compel compliance with the judgment of dissolution, alleging:
“6. On April 7, 2009, [Timothy] and I and our attorneys attended formal mediation with Retired Judge Howard Broadman. During mediation, we agreed on a final and complete settlement of our case, which is contained in the Marital Settlement Agreement attached to the Judgment.
“7. One of the provisions we agreed to was a spousal support buyout. Since we had been married for nearly 40 years and I had never worked outside the home on a full-time basis, [Timothy] could reasonably have been expected to pay to me spousal support until either one of us died or I remarried. However, he wanted to buyout spousal support so that he no longer had any financial ties to me.
“8. Accordingly, I agreed that [Timothy] could buyout the spousal support for the sum of $40,000.00, which was calculated to provide me with enough support until such time as I could draw derivative Social Security Benefits based upon [Timothy’s] contributions to such program.
“9. Since [Timothy] and I did not have savings sufficient to enable him to make such buyout, we agreed that I would take a disproportionate amount of his retirement plan through AT&T. The attorneys based the disproportionate amount of his retirement by determining what percentage of his retirement would be necessary in order to provide me with $40,000.00 extra. AT&T had provided us with a valuation of Petitioner’s retirement in the amount of $405,208.10.… In order to award me $40,000.00 more, or $242,604.05, the attorneys increased the percentage of ownership from 50% to 60%. 60% of $405,208.10 is $243,124.86, or enough to provide me with the $40,000.00 buyout.
“10. Unfortunately, the amount of [Timothy’s] retirement when it was actually awarded to me was not $405,208.10, but substantially lower. In reality, the amount of his retirement was $353,137.32.… So, 60% of $353,137.32 is $211,882.39. Subtracting $176,568.66 [fifty percent of $353,137.32] from $211,882.39 results in $35,313.73.
“11. By reference to the above arithmetic, it is obvious that 60% of the lower amount of [Timothy’s] retirement did not result in me being awarded the $40,000.00 spousal support buyout I was supposed to receive. I actually only received the sum of $35,313.73, which is $4,686.27 less than what was awarded me [$40,000]. [¶] … [¶]
“14. I bargained for the spousal support specifically to enable me to have sufficient support until such time as I was able to draw upon my portion of [Timothy’s] Social Security Benefits through the Derivative Social Security program. I do not have sufficient earnings to pay for the most basic of necessities (I am talking mortgage, utilities, and food payments) unless I have financial support from [Timothy], which was specifically bargained for and agreed upon in the Marital Settlement Agreement. Quite simply, $4,686.27 may not be a significant sum for [Timothy], who I understand continues to earn in excess of $8,000.00 each month, not including his new wife’s income of over $6,000.00 per month, but to me it is the difference between paying my mortgage or eating for 3 months.”
Cheryl requested the court to order Timothy to pay her the sum of $4,686.27 “to make up the spousal support buyout shortfall, at which time the Savings and Security Plan can be divided equally, or award me that percentage of the Savings and Security Plan in excess of 50% which will result in me receiving $4,686.27 extra.”
Timothy stated in a responsive declaration:
“My AT&T pension has been outsourced to Fidelity. They provided to me both an actuarial valuation of the cash out and the monthly single life annuity amount. A copy of that document is attached hereto as Exhibit ‘A.’ The actuarial value was $405,208.10. By Qualified Domestic Relations Order, I paid to Wife her one half of the Plan, plus an additional ten percent, worth $40,520.81.
“If Wife received a dollar amount less than she expected, it is because of the method by which she elected to receive her sixty percent of the pension. The option was solely of her choosing.... [¶]... [¶]
“Additionally, Wife was on notice [pursuant to paragraph 14 of the MSA] that taking a lump sum distribution would be calculated on actuarial data peculiar to her, not my data.…
“I admit that these are complex issues. Prior to resolution of this matter, I consulted with a qualified financial advisor, Steven Leoni. Mr. Leoni was more than willing to speak with Wife, and his name and telephone number was provided to Wife through her counsel. Reportedly, he received no contact from Wife or her counsel until after she discovered that her election had resulted in the reduced Benefit she describes.
“The value of the one-half of my pension I received has been reduced by $40,520.81. Any reduction in the amount actually received by Wife is a result of actions by her which were solely her decision.”
Cheryl stated in a reply declaration:
“[Timothy] suggests that the amount received from the division of his pension plan was due to the way in which it was distributed to me. He is simply incorrect; I am not asking for monies that were deducted due to actuarial calculations. He was to pay me $40,520.81 [an additional ten percent of the lump sum payment option of $405,208.10] for spousal support. He has not. The Settlement contemplated those funds were to come from his pension. He will need to access other funds that he has access to to make up the difference.”
In a subsequent supplemental declaration, Cheryl maintained the Plan Administrator used federal law in dividing Timothy’s pension, thereby resulting in an incorrect division. She cited to an analysis by Forensic Economist Ronald G. Reddall of the Santa Maria firm, Pension Values, which stated in pertinent part:
“It appears that the MSA’s addition of another 10% to Ms. Dickey’s 50% community half-interest in the AT&T Pension Benefit Plan retirement benefits was based upon the BMS [Benefit Modeling Statement] obtained by Mr. Dickey on August 28, 2008. Using the BMS’s December 31, 2008 Benefit Commencement Date … Ms. Dickey’s share of Mr. Dickey’s $405,208.10 estimated 12/31/08 Lump Sum benefit would have been $200,282 (49.427%: one-half of 39.146 during-coverture AT&T employment years, divided by 39.600 total AT&T employment years through December 30, 2008, times one-hundred). The addition of ten percentage points to her 50%-of-community share would have increased Ms. Dickey’s share by $40,521 … a figure very close to the MSA’s $40,000.00 spousal-support-waiver award to her.
“Qualified Domestic Relations Orders represent a remedy, under federal law … for disposing of, inter alia, spousal interests in retirement benefits earned under IRS-qualified retirement plans. The rights of the Alternate Payee ex[-]spouses are clearly determined under the substantive ‘local’ (state) law … in this case California community-property and spousal-support law. In this case, plan administration, using a June 1, 2009 Benefit Commencement Date for the Alternate Payee’s Pension Plan interest, arrived at $211,882.39, some $28,921 ($200,282 + $40,521 = $240,803, less $211,882.39), or 12.01% short of her as-of-12/31/08 expectation upon which both the SA [settlement agreement] and MSA both appear to have been based. [T]he federal QDRO remedy has accomplished only a partial disposition of Ms. Dickey’s interest contemplated by the parties … under substantive California law. The primary reason for this is that, under federal law, Alternate Payees [such as Cheryl] are not entitled to benefit from a defined-benefit retirement plan’s actuarial subsidies in situations in which the Plan Participant [such as Timothy] has elected to continue employment.…”
Reddall suggested three alternative approaches to make Cheryl whole: (1) amend the QDRO to provide her with a greater percentage of the pension lump sum buyout; (2) prepare a new QDRO to give her the difference owed; or (3) award her one hundred percent of the remaining funds in appellant’s AT&T Retirement Savings and Security Plan.
On October 9, 2009, the court conducted a contested hearing on Cheryl’s motion to compel compliance with the judgment. The court heard the arguments of counsel, took the matter under submission, and filed a ruling on October 13, 2009, denying Cheryl’s request to compel compliance with the judgment. The court noted that Cheryl had the right and responsibility to select from the forms of benefit available in Timothy’s plan and that she chose a lump sum distribution which resulted in a benefit substantially less than the amount she expected. The court noted there was no evidence that Timothy had been unjustly enriched by Cheryl’s election. Rather, the court observed: “… Wife made a poorly researched election which resulted in a significant loss to her. Wife’s actions were solely at her discretion.”
On October 20, 2009, Cheryl moved to set aside the judgment of dissolution under Code of Civil Procedure section 473, arguing:
“On or about July 3, 2009, [Cheryl] received a check for $211,882.39. Such sum was deposited into an IRA account for [her]. The following calculations represent what the parties contemplated in reaching their stipulated agreement:
“Stated Value of Pension Buy Out = $405,208.10
“[Timothy’s] One-Half Interest = $202,604.05
“[Cheryl’s] One-Half Interest = $202,604.05
“Contemplated Spousal Support Buyout = $40,000.00
“[Timothy’s] Reduced 40% Interest = $162,083.24
“[Cheryl’s] Increased 60% Interest = $243,124.86
“Amount Actually Received by [Cheryl] = $211,882.39
“The amount [Cheryl] received from Fidelity was some $31,242.47 short of the amount everyone involved in this matter expected: the parties, the attorneys, and the mediator. The mistake in the present matter was that Fidelity would divide [Timothy’s] Pension pursuant to his actuarial table when, unbeknownst to everyone involved (the parties, the attorneys, and the mediator), Fidelity would actually divide [Timothy’s] pension pursuant to [Cheryl’s] actuarial table. Due to absolutely no fault of [Cheryl], she did not received the bargained-for spousal support buy out. In reality, she received far less than the contemplated spousal support buyout.”
We note this sum is not the same as the sum of $35,313.73 referenced in Wife’s June 16, 2009, motion to compel compliance with the judgment of dissolution.
On October 30, 2009, Cheryl filed a separate motion to set aside the judgment pursuant to Family Code section 2120 et seq. In addition to the points raised in her October 20, 2009, motion under Code of Civil Procedure section 473, Cheryl added:
“It is anticipated [Timothy] will argue that [Cheryl] should not have sought a lump sum distribution of his Pension, or that she should have known that Fidelity would use her actuarial table and not his. This court should not accept any such argument. The language of the stipulated mediation agreement and the Judgment makes it clear that the parties calculated the 10% disproportionate share by reference to [Timothy’s] lump sum[] distribution amount, and not [Cheryl’s]. Upon further research, the only way [Cheryl] would have received any portion of [Timothy’s] Pension was by way of a lump sum distribution.
“It is equally anticipated that [Timothy] will point to the language of Fidelity’s QDRO, which contains a paragraph toward the end of the document referencing the fact that the plan would divide the pension pursuant to [Cheryl’s] actuarial table. Such language is directly counter to the language of the Judgment and the agreement of the parties. It may satisfy the Federal requirements under ERISA [Employment Retirement Income Security Act], but it does not satisfy California community property law. (See Family Code §§ 2550 et seq. and 2610).
“[Cheryl] could have been made whole by revising the language of the QDRO to divide same pursuant to [Timothy’s] actuarial table. On the other hand, [Cheryl] could have been made whole by receiving all of the value of an as-yet-undivided community asset. Or [Timothy] could have simply paid [Cheryl] the amount of the deficiency. [Timothy] has refused all such avenues. [¶] Accordingly, the only equitable solution remaining is to set aside the Judgment based upon [Cheryl’s] mistake.”
On November 25, 2009, the court filed a ruling summarily denying Cheryl’s October 20, 2009, motion to set aside the judgment under Code of Civil Procedure section 473, subdivision (b) and the October 30, 2009, motion to set aside the judgment under Family Code sections 2120 et seq.
DISCUSSION
I. THE TRIAL COURT DID NOT ABUSE ITS DISCRETION BY DENYING WIFE’S REQUEST TO SET ASIDE THE JUDGMENT IN THE ABSENCE OF CONTRADICTORY FACTS
Cheryl contends the superior court abused its discretion in denying her motion to set aside the judgment pursuant to Code of Civil Procedure section 473, subdivision (b). She contends Timothy failed to file a responsive declaration effectively contradicting the facts set forth in her attorney’s moving declaration.
Code of Civil Procedure section 473, subdivision (b) states, in part:
“[¶] … [¶]
“Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect. The court shall, whenever relief is granted based on an attorney’s affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.…”
In a declaration filed October 20, 2009, Cheryl’s counsel stated in pertinent part:
“I participated as the attorney of record for [Cheryl] in the mediation of her dissolution proceedings with [Timothy’s] attorney of record … and Retired Judge Howard Broadman (hereinafter ‘Mediator’) on April 7, 2009.
“During the mediation … the parties agreed that [Timothy’s] AT&T Pension Benefit Plan and [Timothy’s] AT&T Retirement Savings and Security Plan would be divided in half between the parties.
“The issue of spousal support still had to be addressed as this was a marriage of long duration - having lasted almost 40 years. Throughout the proceedings, [Timothy] had expressed a desire not to have to pay [Cheryl] monthly spousal support.… Armed with this knowledge, the Mediator suggested [Timothy] consider a buyout of spousal support. Since [Cheryl] had two more years before she could begin receiving her derivative Social Security Benefits based upon [Timothy’s] employment history, [Cheryl] and I determined how much support she would need for those two years. The sum we calculated was $40,000.00.
“[Timothy], however, did not have $40,000.00 readily available to effectuate a spousal support buy out. Furthermore, [Timothy] absolutely did not want to make monthly payments to [Cheryl].
“Faced with this set back, I, [Timothy’s] attorney, and the mediator tried to come up with a way by which [Cheryl] could receive her $40,000.00 buyout without [Timothy] having to take out a loan with which to provide such funds. We concluded that the only available asset to effectuate such a buyout was [Timothy’s] pension plan with AT&T. We relied upon a document dated August 21, 2008, from [Timothy’s] AT&T Pension Benefit Plan administrator, Fidelity. This document … showed that the Lump Sum value of his pension was $405,208.10.
“The mediator, [Timothy’s] attorney, and I thought that if we divided [Timothy’s] AT&T Pension Benefit Plan disproportionately by giving [Cheryl] 60 % and [Timothy] 40% of said plan, rather than the 50% split already agreed upon (and which was called for under California community property law), the end result would be [Cheryl] receiving an additional $40,000.00. We assumed that 10% of $405,208.10 was $40,520.81. Such figure was so close to the spousal support buy out figure, that all parties agreed to use the 10 percent figure. [¶] … [¶]
“Unbeknownst to me, [Timothy’s] pension plan was not divided with reference to the value set forth in the August 21, 2008 Benefit Modeling Statement relied upon by all parties, their respective counsel, and the mediator. Rather, the pension was divided using [Cheryl’s] actuarial table, a figure which, of course, none of the parties had access to at the time of mediation or had even contemplated. [¶] … [¶]
“The amount [Cheryl] received from Fidelity was some $31,242.47 short of the amount everyone involved in this matter expected: the parties, the attorneys, and the mediator. The mistake in the present matter was that Fidelity would divide [Timothy’s] Pension pursuant to his actuarial table when, unbeknownst to me (and indeed, to everyone involved (the parties, the attorneys, and the mediator)), Fidelity would actually divide [Timothy’s] pension pursuant to [Cheryl’s] actuarial table. Due to absolutely no fault of [Cheryl], she did not receive the bargained-for spousal support buyout. In reality, she received far less than the contemplated spousal support buyout.”
In a responsive declaration filed November 10, 2009, Timothy stated in relevant part:
“The court resoundingly rejected wife’s attempt to obtain additional funds from me in its October 13, 2009, Ruling.… At argument, my counsel pointed out that wife’s appropriate remedy would have been to, upon discovering the mistake, not take the distribution, re-evaluate her options, and file a motion to set aside the Judgment, if none of the available options met her needs and she felt she had lost the benefit of her bargain. It is only after losing her sought relief on October 13 that she filed this motion.
“By her moving declaration herein, she became aware of her mistake on May 21, 2009, when she received notification from Fidelity of the amount she would receive. [N]ot only did she not bring this motion at that time, she still took the distribution, receiving it on July 3, 2009. By taking the distribution as she so elected, she has irretrievably reduced the value of the only significant community asset we had.
“She now seeks to set aside the Judgment to obtain additional funds and/or assets, even though she both unilaterally reduced the value of this asset and received more than one-half of the community estate originally. While a set aside would enable her to pursue an award of spousal support, the resulting redistribution of the community estate would result in her owing me money, not the other way around. She kept the funds from her businesses, tax refunds, all the furniture and more than half of the AT&T pension. The court cannot find that she would materially benefit from the granting of the relief requested.”
Cheryl contends that “[h]usband’s attorney did not submit a declaration which contradicted the statements made in Wife’s attorney’s declaration. Furthermore, Husband did not dispute Wife’s contention that everyone involved in the process was mistaken as to how Husband’s pension would be divided.” Timothy’s declaration did acknowledge the existence of an apparent mistake on Cheryl’s part. However, after acknowledging the existence of the mistake, the declaration went on to assert that (a) Cheryl first became aware of the purported mistake when she received a notice from Fidelity on May 21, 2009; (b) despite the purported mistake she took the distribution from Fidelity on July 3, 2009; (c) the distribution reduced the value of the couple’s only significant community asset; (d) on October 13, 2009, the superior court denied Cheryl’s June 16, 2009, motion for additional funds by compelling compliance with the judgment; and (e) only after receiving the distribution and losing the motion to compel on October 13 did Cheryl move to set aside the judgment.
On June 16, 2009, after her receipt of the Fidelity letter but prior to receipt of the Fidelity distribution, Cheryl moved to compel compliance with the judgment of dissolution, contending “60% of the lower amount of [Timothy’s] retirement did not result in me being awarded the $40,000.00 spousal support buyout I was supposed to receive. I actually only received the sum of $35,313.73, which is $4,686.27 less than what was awarded me.”
While Timothy’s declaration did acknowledge the accuracy of certain factual averments in the declaration of Cheryl’s counsel, his declaration effectively disputed the legal conclusions drawn by Cheryl’s counsel. Cheryl’s claim that Timothy “did not submit a declaration which contradicted the statements made in Wife’s attorney’s declaration” must be rejected.
II. THE TRIAL COURT DID NOT ABUSE ITS DISCRETION IN REFUSING TO SET ASIDE THE JUDGMENT OR RELATED QUALIFIED DOMESTIC RELATIONS ORDER BASED UPON WIFE’S MISTAKE
Cheryl contends the trial court abused its discretion under Family Code section 2122 by declining to set aside the judgment for dissolution or the QDRO based upon her timely request to set-aside due to her mistake.
She specifically argues:
“In the case at hand, Wife was mistaken as to how Husband’s pension plan would be divided, which may fairly be considered both a mistake of law and of fact. Specifically, she thought his pension would be divided based upon the figure provided in his Benefit Modeling Statement, the very statement that was used at the mediation to come up with the terms of the spousal support buyout. None of the participants in the mediation discussed Wife’s actuarial tables, and in fact, did not know that was how the plan would be ultimately be divided. Based upon such mistaken belief, that the benefit plan would use the figure on Husband’s Benefit Modeling Statement, the parties crafted an agreement which was supposed to provide Wife with an additional $40,000.00 from the division of Husband’s pension plan. [¶] … [¶]
“ … Wife received $31,242.47 less than the amount she bargained for. Wife exchanged the right to receive permanent spousal support for the extra $40,000.00; she was going to use such money to pay her bills until she became eligible to draw upon Husband’s Social Security Derivative Benefits. The receipt of far-less than the spousal support buy-out as contemplated by the parties perpetrated an inequitable result on Wife.”
Family Code section 2122 states in relevant part:
“The grounds and time limits for a motion to set aside a judgment, or any part or parts thereof, are governed by this section and shall be one of the following: [¶]... [¶]
“(e) As to stipulated or uncontested judgments or that part of a judgment stipulated to by the parties, mistake, either mutual or unilateral, whether mistake of law or mistake of fact. An action or motion based on mistake shall be brought within one year after the date of entry of judgment.”
“We recognize that the trial court’s exercise of discretion in refusing to set aside a judgment under [Family Code] section 2122 is subject to reversal on appeal only if we find an abuse of that discretion. We also recognize that this court must not merely substitute its own view as to the proper decision: ‘[T]he showing on appeal is wholly insufficient if it presents a state of facts … which … merely affords an opportunity for a difference of opinion. An appellate tribunal is neither authorized nor warranted in substituting its judgment for that of the trial judge.’ (Brown v. Newby (1940) 39 Cal.App.2d 615, 618.) The trial court’s exercise of discretion must be guided, however, by fixed legal principles, and must ‘be exercised in conformity with the spirit of the law and in a manner to subserve and not to impede or defeat the ends of substantial justice.’ (Bailey v. Taafe (1866) 29 Cal. 422, 424.)” (In re Marriage of Varner, supra, 55 Cal.App.4th at p. 138.) A court must know and consider all the material facts and legal principles essential to an informed, intelligent, and just decision in the particular case before it. Discretion is abused in the legal sense whenever it may be fairly said that the court contravened the uncontradicted evidence in exercising its discretion. (In re Marriage of Rosevear, supra, 65 Cal.App.4th at p. 683.)
Cheryl asserts she was mistaken as to how Timothy’s pension plan would be divided, which she considers both a mistake of law and of fact. According to Cheryl, she thought the pension “would be divided based upon the figure provided in his Benefit Modeling Statement” rather than according to her own actuarial tables. Her appellate contention is contradicted by paragraph 14 of the QDRO, signed by both parties and their respective counsel, which states:
“14. Pursuant to the terms of the Plan, the Participant’s benefit is calculated based on the Participant’s normal retirement age. The Alternate Payee’s award will be adjusted for the Alternate Payee’s age and life expectancy at commencement of the benefit, and the applicable benefit form option, in accordance with the actuarial assumptions set forth in the Plan. If the Alternate Payee elects to start receiving benefits before the Participant’s normal retirement age, the Alternate Payee’s award will be actuarily [sic] reduced to account for such early commencement.” (Emphasis added.)
A judgment may not be set aside simply because the court finds that it was inequitable when made nor simply because subsequent circumstances caused the division of assets or liabilities to become inequitable. (Fam. Code, § 2123.) Section 2123 represents a fixed legal principle that may not be substantively contravened by the trial court in considering a discretionary application for relief under Code of Civil Procedure section 473. (In re Marriage of Heggie (2002) 99 Cal.App.4th 28, 33.)
Timothy points out on appeal:
“Appellant’s failure to explore the provisions of the [Retirement] Plan cannot be overlooked. The Plan was joined and answered, [and was] therefore clearly within the process of the Court. No attempt was made to obtain a benefit statement based on her date of retirement. The date of separation clearly predates the date of the mediation and would have been far more accurate than the [2008 benefit modeling] statement she relied on. She could have had an accountant or investment counselor do the same. Indeed, Husband offered to let her speak with Mr. Leoni, his investment counselor, which he states she chose to decline.”
Timothy’s reference to the role of the Plan in the dissolution action is of particular import. On February 9, 2009, the superior court granted Cheryl’s request for joinder of the AT&T Pension Benefit Plan - West Program. That same day, Cheryl’s attorney filed and served a pleading on joinder - employee benefit plan. Cheryl sought the following relief: (1) an order determining the nature and extent of both employee and nonemployee spouse’s interest in employee’s benefits under the plan; (2) an order restraining the claimant AT&T Pension Plan from making benefit payments to the employee spouse pending the determination and disposition of the nonemployee spouse’s interest, if any, in the employee’s benefits under the plan; (3) an order directing the claimant to notify the nonemployee spouse when benefits under the plan first become payable to the employee; and (4) an order directing the claimant to make payment to the nonemployee spouse of said spouse’s interest in the employee’s benefits under the plan when they become payable to the employee.
On February 27, 2009, Scott O’Brien, as agent for AT&T Pension Plan, filed a notice of appearance and response. The Plan alleged the allegations of the pleadings were correct as to the name of the participant but further alleged: “The Benefit Plan is without sufficient information with respect to the remaining allegations in the Pleading on Joinder[], and, therefore, the remaining allegations are denied.”
On April 21, 2009, the court entered judgment of dissolution and order property division as set forth in the attached MSA. The MSA provided for Cheryl’s waiver of spousal support in consideration of her receipt of $40,000 from Timothy’s share of his AT&T pension and noted: “Said sum shall be paid to her by an unequal division of the AT&T pension by a separate Qualified Domestic Relations Order.” Pursuant to the MSA, the parties stipulated that the MSA was “a fair and equitable distribution of the property and a fair and just settlement of this matter.” The parties expressly released their attorneys from any liability “for not obtaining appraisals.” In a letter dated May 15, 2009, Fidelity deemed the April 21, 2009, Domestic Relations Order to be “ ‘qualified’ ” under the Employee Retirement Income Security Act (ERISA) and Internal Revenue Code.
On May 21, 2009, in response to a May 15, 2009, request by Cheryl, Fidelity issued a letter setting forth “the methodology and values used to calculate your QDRO award, using the marriage dissolution date of July 18, 2008 and a Benefit Commencement Date (BCD) of June 1, 2009.” The letter set forth the marital benefit to be split, Cheryl’s QDRO award (expressed as an estimated single life monthly annuity of $1,128.76 or lump sum of $211,882.39), and several payment options. According to Cheryl, she contacted her attorney after receiving the May 21, 2009, Fidelity letter, her counsel made unsuccessful attempts to resolve the matter with opposing counsel, and her attorney filed the motion to compel compliance with the judgment on June 16, 2009. Cheryl acknowledged receiving a check from Fidelity “in the incorrect amount” on July 3, 2009.
In her declaration attached to the October 20, 2009, motion to set aside judgment (Code Civ. Proc., § 473, subd. (b)), Cheryl maintained that she, Timothy, and their attorneys calculated the division of Timothy’s pension benefits based upon an August 21, 2008, benefit modeling statement from Fidelity. That benefit modeling statement included an “important notice” which stated: “To understand the actual dollar value impact on your pension benefit, we recommend you model various scenarios through [Fidelity] NetBenefits or with a benefits center associate, holding constant your last date of employment and varying the benefit commencement date. In addition, please note that you should review your Summary Plan Description (SPD) to review information regarding the plan’s early retirement factors and other factors that may materially affect your benefit.”
Despite this advisement, the parties did not request an updated benefit modeling statement at the time of the mediation or immediately prior to the entry of judgment of dissolution. On August 7, 2009, the date set for hearing on Cheryl’s motion to compel compliance with judgment, the court ordered her counsel to “contact Fidelity to obtain a Benefit Modeling Statement for Husband Timothy Dickey as of September 1, 2009.” The subsequent benefit modeling statement, dated August 25, 2009, set forth an assumed benefit commencement date of September 1, 2009, and reflected an estimated “Lump Sum (one-time payment) To Participant” of $424,456.80. The statement did provide: “The amount of your benefit does not reflect the provisions of any Domestic Relations Order on file that provide benefits to any alternate payees. No benefits will be paid while legal claims by any potential alternate payees are being processed.”
In its ruling filed October 13, 2009, the superior court concluded: “The only evidence is that Wife made a poorly researched election which resulted in a significant loss to her. Wife’s actions were solely at her discretion.” In a declaration filed November 10, 2009, Timothy noted that Cheryl “became aware of her mistake on May 21, 2009, when she received notification from Fidelity of the amount she would receive. [N]ot only did she not bring this motion [to set aside] at that time, she still took the distribution, receiving it on July 3, 2009. By taking the distribution as she so elected, she has irretrievably reduced the value of the only significant community asset we had.”
The question on appeal is whether the court’s October 13, 2009, and November 25, 2009, rulings constituted an abuse of discretion by the trial court. Cheryl characterizes the instant situation as one of mistake, a recognized basis for triggering a set-aside. Timothy characterizes the situation as one of “failure to explore the provisions of the Plan.” Expressing it a different way, Timothy concludes, “Appellant and her Counsel failed to do their homework.…” In its October 13, 2009, ruling, the court characterized the situation as “a poorly researched election [by Cheryl] which resulted in a significant loss to her.” The burden is on the complaining party to establish abuse of discretion. The showing on appeal is insufficient if it presents a state of facts which simply affords an opportunity for a difference of opinion. (In re Marriage of Rosevear, supra, 65 Cal.App.4th at p. 682-683.) If the trial court’s conclusion was a reasonable exercise of its discretion, a reviewing court is not free to substitute its discretion for that of the trial court. (Avant! Corp. v. Superior Court (2000) 79 Cal.App.4th 876, 881-882.)
The parties are in relative agreement on the series of the events leading up to this appeal but disagree as to the monetary effect of those events. The trial court drew factual inferences in favor of Timothy’s version of the relevant events. We cannot substitute our judgment of the proper decision for that of the trial judge. This is particularly true where, as here, the case presented facts that simply afforded an opportunity for a difference of opinion.
Timothy contends Cheryl’s appeal is frivolous and that he should be awarded attorney fees as a sanction. “When it appears to the reviewing court that the appeal was frivolous or taken solely for delay, it may add to the costs on appeal such damages as may be just.” (Code Civ. Proc. § 907.) “On motion of a party or its own motion, a Court of Appeal may impose sanctions, including the award or denial of costs under [California Rules of Court, ] rule 8.278, on a party or an attorney for: [¶] (1) Taking a frivolous appeal or appealing solely to cause delay; … or [¶] (4) Committing any other unreasonable violation of these rules.” (Cal. Rules of Court, rule 8.276.)
DISPOSITION
The judgment is affirmed. Each party shall bear their own costs on appeal. Respondent’s request for sanctions is denied.
WE CONCUR: Hill, P.J., Wiseman, J.
In In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650, the California Supreme Court held that “an appeal should be held to be frivolous only when it is prosecuted for an improper motive -- to harass the respondent or delay the effect of an adverse judgment -- or when it indisputably has no merit -- when any reasonable attorney would agree that the appeal is totally and completely without merit. [Citation.] [¶] However, any definition must be read so as to avoid a serious chilling effect on the assertion of litigants’ rights on appeal. Counsel and their clients have a right to present issues that are arguably correct, even if it is extremely unlikely that they will win on appeal. An appeal that is simply without merit is not by definition frivolous and should not incur sanctions.” (Italics in original.)
“Sanctions are to be ‘used most sparingly to deter only the most egregious conduct.’ [ Citation.] Further, ‘[a]n appeal, though unsuccessful, should not be penalized as frivolous if it presents a unique issue which is not indisputably without merit, or involves facts which are not amenable to easy analysis in terms of existing law, or makes a reasoned argument for the extension, modification, or reversal of existing law. [Citation.]’ [Citation.]” (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1422.)
Here, we glean no evidence of improper motive from the pleadings. Moreover, Cheryl’s counsel has made a reasoned, although ultimately unsuccessful, argument for the modification or extension of existing law. We cannot say this appeal is frivolous.