Opinion
B195293
10-30-2008
In re the Marriage of MOLLY H. and HENRY C. YUEN. HENRY C. YUEN, Appellant, v. MOLLY H. YUEN, Respondent.
Law Offices of Robert J. Allan & Associates, Martin B. Snyder and Robert J. Allan for Appellant. Dreier Stein Kahan Browne Woods George and Henry S. David for Respondent.
Not to be Published
The trial court granted Molly Yuens motion to confirm spousal support arrearages and entered judgment against her ex-husband, Henry Yuen, in the principal amount of $46,193,076.00, plus interest. Henry timely appeals. We reverse in part and affirm in part, concluding that the principal sum must be reduced by $5,250,000 and that the trial court erred in determining the dates when portions of the principal sum became due. We remand with directions for the trial court to enter a new judgment and to recalculate interest.
We will refer to the parties by their first names in order to avoid confusion. No disrespect is intended.
BACKGROUND
On December 23, 1986, Henry filed a petition for dissolution of his marriage to Molly. On September 15, 1987, the trial court entered a stipulated judgment dissolving the marriage.
On August 15, 1997, Molly moved to set aside the 1987 judgment and/or to divide concealed assets. On August 8, 2000, Henry and Molly entered into a stipulation resolving Mollys motion, and the court entered an order on the stipulation (hereafter the "2000 order") on the same day.
Paragraphs 5(c) through 5(j) of the 2000 order required Henry to pay spousal support to Molly of approximately $5,000,000 on or before August 1 in each year from 2002 through 2009.
Paragraph 5(a) required Henry to pay Molly $11,119,513, in two installments, shortly after the 2000 order was entered, and paragraph 5(b) required Henry to pay Molly $5,239,463 on or before August 1, 2001. The trial court found, and Molly does not deny, that Henry made the required payments under paragraphs 5(a) and 5(b). Thus, only paragraphs 5(c) through 5(j) are at issue on this appeal.
Paragraph 6(a) of the 2000 order provided for interest, additional spousal support, and acceleration of future payments if Henrys payments under paragraphs 5(c) through 5(j) were late. Specifically, if any such "annual installment is paid more than fifteen (15) days after its due date," then "that installment shall accrue simple interest at the rate of ten percent (10%) per annum." Moreover, if "any installment of spousal support" under paragraphs 5(c) through 5(j) "is late by more than thirty (30) days, [Henry] shall forthwith pay to [Molly] additional nondeductible/nonincludable spousal support in the amount of [s]even [h]undred [f]ifty [t]housand [d]ollars ($750,000) together with such late support installment." Finally, "[i]f [Henry] is delinquent in the payment of any annual installment of spousal support" under paragraphs 5(c) through 5(j) "and/or the additional support sum of [s]even [h]undred [f]ifty [t]housand [d]ollars ($750,000) by more than six (6) months, then the entire then remaining balance of spousal support annual installments" under paragraphs 5(c) through 5(j) "plus the additional [s]even [h]undred [f]ifty [t]housand [d]ollars ($750,000) of additional spousal support shall become immediately due and payable in a lump sum to [Molly], if she is then living."
Paragraph 14 required that in order to "secure payments of the spousal support" under paragraphs 5(c) through 5(j), Henry "shall forthwith obtain life insurance on his life, sufficient to pay in full from time to time, the then remaining balance due on the spousal support obligation" under paragraphs 5(c) through 5(j). Paragraph 14(b) further required Henry to provide Molly "with proof of the existence and amount of such life insurance" "on August 1 of each year that spousal support payments are due" under paragraphs 5(c) through 5(j). And paragraph 14(f) provided that "[i]n the event of default in maintaining the insurance required by [the 2000 order] in full force and effect, then all remaining spousal support installments due" under paragraphs 5(c) through 5(j) "shall become immediately due and payable in a lump sum to [Molly]."
On July 29, 2002, at a 30-minute meeting in a hotel lobby, Molly and Henry entered into an agreement (hereafter the "2002 agreement") to modify the 2000 order. That meeting "was the first time that Molly had heard that Henry wanted her to sign an agreement postponing any of the payments due to her under the 2000 [o]rder, the first time she was presented with the terms of such postponement, and the first time that she had seen a draft of such an agreement." Molly initially resisted signing the agreement that Henry presented to her, but eventually she relented and signed. Henry told her that "he needed her to sign the paper so that he could pay her `after one year." Molly "did not read it, she did not ask to read it, [and] nobody read it to her[.]"
The spousal support provisions in paragraph 5 of the 2000 order were expressly made "nonmodifiable." In the proceedings under review, however, the trial courts order determined that the 2002 agreement was "valid and enforceable" and that it did modify the 2000 order.
The recitals in the 2002 agreement state that "almost all of [Henrys] assets are in" shares of "Gemstar-TV Guide International, Inc." (GMST), which, according to the recitals, had dropped in value from $63.81 per share on August 8, 2000, to $4.09 per share on July 26, 2002. The recitals further state that if Henry "disposes of enough shares and options" to make his August 1, 2002, spousal support payment, then "as long as the GMST share price remains at a level of about $5 per share, [Henry] will not be able to make the additional payments provided" in the 2000 order. Consequently, the recitals continue, Molly and Henry agree that Henry "should not dispose of any shares or options at the current time and at a price range of $5 per share, if possible." The final recital states that Molly and Henry agree that "it is in the mutual best interest to modify" the spousal support payment schedule of the 2000 order "to permit GMST share price to have a chance to recover, . . . rather than to force a disposition of [Henrys] GMST shares at a low price at this time, which may result in a reduction of the total amount receivable by [Molly] from [Henry]."
Following the recitals, the provisions of the 2002 agreement are contained in seven numbered paragraphs. Paragraph 1 provides that the recitals "are included herein as part of this modification."
Paragraph 2 provides that "[t]he payment due on August 1, 2002 under Section 5.c of the [2000 order] shall be postponed until August 1, 2003 with no interest."
Paragraph 3 provides that "[c]ommencing with the payment due on August 1, 2003, the following additional conditions will become effective: [¶] If during the 12-month period before the scheduled payment date, the stock price of GMST, split adjusted, does not exceed $20 per share for 60 consecutive trading days, then Henry . . . has the right to postpone that portion of the payment in excess of the sum of 50% of after-tax proceeds resulting from the sale, disposition or loan based on pledging, of [Henrys] shares in GMST during the preceding 12 months. Any postponed amount shall be deferred for 12 months from the scheduled payment date and added to any originally scheduled payment."
Paragraph 4 provides that Henry "agrees that commencing August 1, 2003, in the event that (a) he is not prohibited by any applicable laws or regulations from disposing of shares or options, and (b) GMST share price, split adjusted, is in excess of $30 per share for 60 consecutive trading days, the entire remaining amount due and payable to Molly . . . under Sections 5.a through [5.j] shall accelerate and become due and payable within thirty (30) days of the satisfaction of conditions (a) and (b) herein."
Paragraph 4 of the 2002 agreement actually refers to "Sections 5.a through 5.j" but the 2000 order contains no paragraph 5(j).
Henry made no spousal support payments to Molly on August 1, 2003, or thereafter.
On July 29, 2005, Molly filed a motion to confirm arrearages and to declare the 2002 agreement invalid and/or unenforceable. This litigation ensued.
On April 4, 2006, the court entered two orders granting in part Mollys motions to compel Henry to provide further responses to requests for production of documents, to answer questions from a previous deposition session, to produce documents at his deposition, and to attend a further deposition session. In both orders, the court rejected Mollys requests for awards of attorneys fees and costs.
After the court entered its April 4, 2006, discovery orders, Henry invoked his Fifth Amendment privilege against self-incrimination, arguing that Mollys discovery sought information that might prejudice him in an ongoing federal investigation of his dealings with GMST. On that basis, Henry refused to attend further sessions of his deposition or to comply fully with the courts discovery orders. The trial court rejected Henrys argument, reasoning that Henry had not properly invoked his Fifth Amendment privilege because, for example, to invoke the privilege he must attend his deposition and raise the privilege on a question-by-question basis.
On June 5, 2006, the court entered a further discovery order, apparently ordering Henry to comply with the courts prior discovery orders ("[T]his is the `this time I really mean it order."). On the same day, the court entered an order granting certain limited issue and evidence sanctions against Henry but denying the overwhelming majority of the sanctions Molly requested.
We say "apparently" because our statement is based on the trial courts brief description of the order in the reporters transcript; the record on appeal does not contain the order itself. The reporters transcript also reflects that the court signed another discovery order, "compelling further answers and all that," on May 23, 2006. Again, the record on appeal does not contain the order itself. It is the appellants burden to provide the reviewing court with an adequate record to establish prejudicial error. (Rancho Santa Fe Assn. v. Dolan-King (2004) 115 Cal.App.4th 28, 46.) In his opening brief, Henry refers to a further discovery order of May 25, 2006, but the record on appeal contains no such order, the record also contains no reporters transcript of any proceedings held on that date, and Henrys record citation concerning the purported order is unintelligible.
At a hearing on June 9, 2006, Henrys counsel conceded that, "notwithstanding various court orders," Henry "did not appear at his deposition which was set for [June 7]." The court observed that if Henry had "appeared at deposition that hes been ordered to do three times," had properly invoked his Fifth Amendment rights question-by-question, and had identified both the criminal laws under which he was allegedly exposed and the ways in which the information Molly sought might be relevant, then the court would be able to "make the determination" on whether the Fifth Amendment privilege applied. But the court concluded that Henry had never given the court sufficient information to enable the court to sustain his Fifth Amendment objections.
On June 12, 2006, the court entered another sanctions order. The order (1) precluded Henry "from calling himself to testify in connection with" Mollys motion to confirm arrearages and from offering evidence in the form of his own prior deposition testimony or declarations, (2) precluded Henry from introducing any documents that had not already been produced by him or his accountant, (3) precluded Henry, subject to reconsideration by the court, from eliciting testimony from his accountant "to the extent such testimony depends on [Henry] as the ultimate source of information," and (4) conclusively found true the factual findings of the federal district court in a case brought against Henry by the Securities and Exchange Commission.
From June 12 to June 22, 2006, the trial court conducted an evidentiary hearing on Mollys motion to confirm arrearages. Upon request of both parties, the court issued a written statement of decision. The court determined that the 2002 agreement was valid and enforceable and adopted the agreement "as an order modifying the 2000 order."
The court concluded that Henry had breached both his life insurance and his payment obligations under the 2000 order and the 2002 agreement in several ways. First, the court found that "[t]here is no evidence before the court that Henry fullymaintained the life insurance as the 2000 order required." The court also found that Henry breached his obligation to provide Molly with proof of adequate life insurance on August 1, 2002. On the basis of those breaches, the court concluded that Henrys payment obligations under paragraphs 5(c) through 5(j) of the 2000 order "were accelerated and became immediately due and payable on August 1, 2002, and triggered the interest and additional spousal support provisions of the 2000 [o]rder." Because Henry has never made any payments under paragraphs 5(c) through 5(j), the court imposed eight additional spousal support payments of $750,000 each (i.e., one for each missed payment under paragraphs 5(c) through 5(j)), plus 10 percent interest, all pursuant to paragraph 6(a) of the 2000 order.
Second, the court found that although the 2002 agreement provided for a one-year postponement of the payment originally due August 1, 2002, under paragraph 5(c) of the 2000 order, the 2002 agreement did not provide for any further postponement of that payment. Henry has never made that payment. Thus, independently of Henrys breach of his insurance obligations, his breach of his payment obligations too "triggered the interest, additional spousal support, and acceleration provisions of the 2000 [o]rder." The court also found that Henry had breached his payment obligations in certain other ways.
On those grounds, the court calculated the amount of the arrearages as follows: (1) $40,193,076.00 in (accelerated) missed payments under paragraphs 5(c) through 5(j) of the 2000 order, plus simple interest of 10 percent per annum starting on August 16, 2002; (2) eight additional payments of $750,000, totaling $ 6,000,000, pursuant to paragraph 6(a) of the 2000 order, plus simple interest of 10 percent per annum starting on September 3, 2002. Using those figures, the court determined that Henry owed Molly the principal sum of $46,193,076.00 plus interest of $18,515,704.60 as of August 16, 2006, with interest continuing to accrue at the rate of $12,831.41 per day.
STANDARD OF REVIEW
We review the trial courts conclusions of law de novo, and we review its findings of fact under the substantial evidence standard. (Crocker National Bank v. City and County of San Francisco (1989) 49 Cal.3d 881, 888.) We review the trial courts imposition of discovery sanctions for abuse of discretion. (Parker v. Wolters Kluwer United States, Inc. (2007) 149 Cal.App.4th 285, 297.)
DISCUSSION
I. The Alleged Defects in the Statement of Decision
Henry argues that "notwithstanding Henrys timely request and objections," the trial courts statement of decision "fail[ed] to resolve critical principal controverted issues" and is therefore reversible per se. In response, Molly argues that because the trial court proceeding was not a trial but rather was an evidentiary hearing on a motion, the rules governing statements of decision for bench trials do not apply. We conclude that even assuming for the sake of argument that the rules governing statements of decision apply, Henrys argument fails.
When a party properly requests a statement of decision, the statement of decision must state all "factual findings necessary to a resolution of disputed material issues." (In re Marriage of Hardin (1995) 38 Cal.App.4th 448, 453.) The court need not make findings on matters that are not necessary to its decision. (Kazensky v. City of Merced (1998) 65 Cal.App.4th 44, 68.) Thus, "`[a] failure to find on an immaterial issue is not error. [Citation.] In issuing a statement of decision, the trial court need not address each question listed in a partys request. All that is required is an explanation of the factual and legal basis for the courts decision regarding such principal controverted issues at trial as are listed in the request. [Citation.]" (Ibid., quoting Nunes Turfgrass, Inc. v. Vaughan-Jacklin Seed Co. (1988) 200 Cal.App.3d 1518, 1525.)
On appeal, Henry faults the statement of decision for (1) failing to state the "factual and legal basis" for the trial courts findings that Henry breached his life insurance obligations, (2) failing to determine whether the share price of GMST stock reached certain levels specified in the 2002 agreement, and (3) failing to determine whether Henry received after-tax proceeds from the sale of GMST stock any time from August 1, 2002, through the date of trial (and, if so, in what amount). On the first point, Henrys argument fails because the statement of decision does state the courts basis for finding that Henry breached his life insurance obligations—the statement of decision says that "[t]here is no evidence before the court that Henry fullymaintained the life insurance as the 2000 order required" and "[t]here is no evidence before the court that Henry provided Molly proofthat he had life insurance on August 1, 2002 or any subsequent August 1." On the second and third points, Henrys argument fails because the statement of decision correctly states that neither point is necessary to the courts decision. Accordingly, we reject Henrys argument that the statement of decision omits necessary findings and is reversible per se.
II. The Discovery Sanctions
Henry argues that the trial court abused its discretion when it imposed evidence sanctions against him. We disagree.
Henry does not challenge the courts imposition of issue sanctions.
The trial court sanctioned Henry for his persistent failure to comply with the courts discovery orders. Henry does not argue that he complied with the discovery orders, and he does not argue that the orders themselves constituted abuses of discretion. Rather, he argues that (1) evidence sanctions can be imposed only for willful failure to comply with the courts orders, and (2) his assertion of his privilege against self-incrimination "is an `unusual circumstance that negates the `willfulness necessary to impose discovery sanctions."
Henrys argument fails at every step. First, as Henry acknowledges, there is conflicting case law on whether, as a general matter, only willful failure to comply with a discovery order can trigger nonmonetary sanctions. (Compare Reedy v. Bussell (2007) 148 Cal.App.4th 1272, 1291 ["[W]illfulness is no longer a requirement for the imposition of discovery sanctions"], with Vallbona v. Springer (1996) 43 Cal.App.4th 1525, 1545 [an "absolute[] prerequisite to imposition of [a] sanction" is that the "failure to comply . . . must be wilful"].) The relevant statutes in this case, however, are Code of Civil Procedure sections 2025.450, subdivision (d), and 2031.310, subdivision (e), which contain no willfulness requirement—the court may impose nonmonetary sanctions if a party "fails to obey an order compelling attendance" at a deposition (id., § 2025.450, subd. (d)) or "fails to obey an order compelling further response" to a request for production of documents (id., § 2031.310, subd. (e)).
Second, Henrys assertion of his privilege against self-incrimination would not "negate" willfulness, even if willfulness were necessary. The trial court determined that Henry could not simply refuse to attend his deposition but rather had to attend and invoke his Fifth Amendment rights on a question-by-question basis. The trial court was correct. (In re Marriage of Sachs (2002) 95 Cal.App.4th 1144, 1151.) Henry does not argue to the contrary. Henrys refusal to attend a court-ordered deposition session and assert his Fifth Amendment rights question-by-question therefore constitutes willful disobedience.
Henry cites a declaration in which he raised his Fifth Amendment rights on a question-by-question basis concerning certain questions that had been asked in a previous deposition session. At the hearing on June 9, 2006, the court went through that declaration and explained why Henrys Fifth Amendment and other objections failed. On appeal, Henry does not challenge any aspect of the courts analysis. Moreover, that declaration is not evidence of an attempt to comply with the courts order that Henry appear at an additional deposition session.
Henry further argues that the trial court should have "fashioned a less draconian remedy" by granting a "continuance of the evidentiary hearing until the criminal investigation was resolved." The argument fails. The trial court determined that Henry had not properly asserted his rights against self-incrimination because he never provided the court with sufficient information on which to base a ruling on those rights. Henry has not challenged that determination on appeal. The courts denial of Henrys request for a continuance therefore was not an abuse of discretion.
The trial courts evidentiary sanctions were closely tailored to address Henrys violations of the courts discovery orders. Henry refused to show up for his deposition, despite being ordered to do so three times, so the court prohibited Henry from calling himself to testify and from introducing testimony of his accountant if he (Henry) was the ultimate source of the accountants information. Henry refused to comply fully with court orders to produce documents, so the court prohibited Henry from introducing any documents he had not already produced. The court did not abuse its discretion by imposing those sanctions.
III. The Findings Concerning Henrys Breach of His Payment Obligations
The trial court concluded that (1) under the 2002 agreement, the spousal support payment originally due on August 1, 2002, pursuant to paragraph 5(c) or the 2000 order was postponed to August 1, 2003, but (2) the 2002 agreement did not provide for any further postponement of that payment. Henry argues on several grounds that the second conclusion was erroneous. We find none of Henrys arguments persuasive.
Paragraph 2 of the 2002 agreement specifically identifies "[t]he payment due on August 1, 2002 under Section 5.c of the [2000 order]" and postpones it to "August 1, 2003 with no interest." Paragraph 3 of the 2002 agreement imposes certain conditions "[c]ommencing with the payment due on August 1, 2003," but it does not specify whether "the payment due on August 1, 2003" refers to (1) the payment originally due on August 1, 2003, pursuant to paragraph 5(d) of the 2000 order, or (2) the payment originally due on August 1, 2002, pursuant to paragraph 5(c) of the 2000 order, which was postponed to August 1, 2003, or (3) both.
Henry raises several arguments concerning interpretation of the 2002 agreement, but the only one that could be applied to address this ambiguity is Henrys claim that the 2002 agreement "was entered into for Henrys benefit" and that the agreement therefore "must be construed most favorably to Henry as the party in whose favor it was made." (Cf. Code Civ. Proc., § 1864.) The argument fails because the recitals to the 2002 agreement expressly provide that the agreement was "in the mutual best interest" of the parties and that a chief purpose of the agreement was to benefit Molly by making it more likely that Henry would be able to make all of the spousal support payments required by the 2000 order. Thus, the 2002 agreement expressly contradicts Henrys claim that the agreement was solely, or even predominantly, for Henrys benefit.
We conclude that Henry has offered no reason why the ambiguity concerning the scope of paragraph 3 of the 2002 agreement—namely, whether the stated conditions apply to the original 2003 payment, the postponed 2002 payment, or both—should be resolved in his favor. The trial court resolved that ambiguity against him, determining that paragraph 3 did not apply to the postponed 2002 payment, which therefore remained due on August 1, 2003, regardless of whether any of the conditions in paragraph 3 were satisfied. Because Henry has offered no meritorious argument against the trial courts determination, we must affirm it. (See Fundamental Investment etc. Realty Fund v. Gradow (1994) 28 Cal.App.4th 966, 971 ["The burden of affirmatively demonstrating error is on the appellant"].)
In any event, we agree with the trial courts interpretation because "[i]t is a well-settled rule of law that ambiguities in a written contract are to be construed against the party who drafted it." (Victoria v. Superior Court (1985) 40 Cal.3d 734, 745.) Henry prepared the 2002 agreement and presented it to Molly for signature. Henry is an intellectually sophisticated person—he holds both a doctorate in applied mathematics and a law degree. Paragraph 2 of the 2002 agreement shows that Henry was capable of clearly and specifically describing a particular payment by identifying the relevant paragraph of the 2000 order—paragraph 2 of the 2002 agreement expressly refers to paragraph 5(c) of the 2000 order, leaving no ambiguity about the identity of the payment at issue. In paragraph 3 of the 2002 agreement, however, Henry failed to include such indentifying information. The trial court was therefore correct in resolving the ambiguity against him. (See ibid.)
For the foregoing reasons, the first payment to which the conditions in paragraph 3 of the 2002 agreement applied was the payment originally due on August 1, 2003, pursuant to paragraph 5(d) of the 2000 order. Thus, under the 2002 agreement, the payment under paragraph 5(c) of the 2000 order, which was originally due August 1, 2002, was postponed to August 1, 2003, but no further. Henry therefore breached his payment obligations when he failed to make that payment on time.
Henry presents two further arguments for a contrary conclusion, but we find neither of them persuasive. First, Henry argues that the recitals in the 2002 agreement "provide that as long as the GMST share price `remains at a level of about $5 per share . . . Henry was not obligated to make a payment." The recitals do not so provide. Rather, according to the recitals, the parties agreed that (1) Henry "should not dispose of any shares or options at the current time and at a price range of $5 per share, if possible," and (2) it was in their "mutual best interest" to modify the payment schedule "rather than to force a disposition of [Henrys] GMST shares at a low price at this time." (Italics added.) Thus, the recitals expressed the parties intention not to force Henry to sell his GMST stock at approximately $5 per share in late July 2002, but the recitals say nothing about postponing all payments forever if the share price did not recover. On the contrary, the 2002 agreement (1) gave Henry a one-year postponement of the August 1, 2002, payment, and (2) provided for the postponement of all other scheduled payments depending on the price of GMST shares, but (3) required Henry to pay Molly 50 percent of the after-tax proceeds of any "sale, disposition or loan based on pledging" of his GMST stock (regardless of the share price), up to the amount of any scheduled payment. Henrys contrary claim—that as long as the GMST share price remained in the $5 price range he did not owe Molly anything, even if he sold all of his GMST stock—is not supported by the text of the agreement.
Second, Henry argues that Molly must have understood that the 2002 agreement postponed all support payments indefinitely because she "sat silent for three years after the 2002 [a]greement was executed, never even contacting Henry about the unpaid support . . . until she finally filed the [m]otion to [c]onfirm [a]rrearages in July 2005." Again, the record belies Henrys argument. Molly testified that when Henry failed to pay her in August 2003, she asked her son to contact Henry. When they failed to reach Henry, Molly asked her son to help her find a lawyer. She retained a lawyer "to help [her] collect money from" Henry in January 2004. That testimony constitutes substantial evidence that Molly did not sit silent for three years but rather acted promptly to seek a remedy when Henry failed to pay her on August 1, 2003. We must infer all facts supporting the judgment as long as they are supported by substantial evidence. (In re Marriage of Mix (1975) 14 Cal.3d 604, 614.)
For all of the foregoing reasons, we agree with the trial courts conclusion that Henry breached his payment obligations by failing to make the payment required under paragraph 5(c) of the 2000 order, which the 2002 agreement postponed to August 1, 2003, but no further.
IV. The Findings Concerning Henrys Breach of His Insurance Obligations
The trial court found that "[t]here is no evidence before the court that Henry fullymaintained the life insurance as the 2000 order required," and that on August 1, 2002, Henry breached his obligation to provide Molly with proof of sufficient life insurance. On those grounds, the court concluded that Henrys payment obligations under paragraphs 5(c) through 5(j) of the 2000 order "were accelerated and became immediately due and payable on August 1, 2002, and triggered the interest and additional spousal support provisions of the 2000 [o]rder."
Henry contends that the record does contain uncontradicted evidence that he maintained sufficient life insurance until December 4, 2003, and that any finding to the contrary is not supported by substantial evidence. He further contends that his failure to provide Molly with proof of insurance on August 1, 2002, was not sufficient in itself to trigger the interest, additional spousal support, and acceleration provisions of the 2000 order. We agree with both contentions.
Molly argues that Henry waived this issue by failing to raise it in the trial court. Application of the waiver rule is discretionary, however, and we exercise our discretion to consider the issue. (In re Marriage of Moschetta (1994) 25 Cal.App.4th 1218, 1227.)
As regards Henrys first contention: At the hearing, the trial court admitted an exhibit demonstrating that in December 2000 Henry had nine life insurance policies with a total face amount of $45,432,539, and with Molly as the beneficiary. Molly concedes that "Henry had life insurance in 2000[.]" The identifying information in the exhibit includes the names of the insurers and the policy numbers.
The trial court also admitted exhibits documenting the dates on which eight of the nine policies (again identified by insurers and policy numbers) lapsed for nonpayment of premiums. The earliest documented lapse was on December 4, 2003. Molly cites no evidence that any of the policies had previously lapsed and been reinstated.
After Henry made the scheduled spousal support payment of August 1, 2001, he no longer needed all nine policies.
Given the foregoing evidence, we cannot agree with the trial courts determination that the record contains no evidence that Henry fully performed his life insurance obligations before December 2003. On the contrary, there is ample evidence that he did. In addition, although it is possible that some of the documented life insurance policies lapsed some time before December 2003 but were reinstated, we have found no evidence of such earlier lapses in the record. On this record, then, we have no alternative but to infer (and the trial court should have found) that Henry maintained sufficient life insurance until December 4, 2003, but not thereafter.
As regards Henrys second contention: Paragraph 14(f) of the 2000 order expressly provides that if Henry failed to maintain the required insurance, then all remaining spousal support payments under paragraphs 5(c) through 5(j) "shall become immediately due and payable." In contrast, paragraph 14(b) expressly provides that Henry must give Molly proof of sufficient life insurance, but it does not provide that Henrys failure to furnish such proof will trigger acceleration of the remaining spousal support payments. By its terms, then, the 2000 order does not provide for acceleration of remaining spousal support payments as a penalty for merely failing to provide proof of life insurance.
Mollys only argument to the contrary is that without proof of life insurance, "she has the same risk of not being secure as though [Henry] had no insurance," and she "must be entitled to some remedy" for such a breach. We are not persuaded. As long as Henry maintained the required life insurance, Molly was in fact secure. If, at the same time, he failed to give her proof of life insurance, then she did not know she was secure, but she still was secure. As for remedies, Molly fails to explain why she could not have applied to the court for enforcement of the courts order that Henry provide proof of life insurance. In any event, the fact remains that the order does not provide for acceleration of remaining support payments solely on the basis of failure to provide proof of life insurance.
For all of these reasons, we agree with Henrys contentions that (1) the record does not contain substantial evidence that he failed to maintain sufficient life insurance before December 2003, and (2) his failure to give Molly proof of life insurance did not trigger acceleration of all remaining spousal support payments. The evidence in the record supports only one reasonable inference: Henry maintained sufficient life insurance until December 4, 2003, but not thereafter.
V. The Enforceability of the 2002 Agreement
The trial court determined that the 2002 agreement was valid and enforceable. On appeal, Molly renews some of her arguments against that determination. The trial court, however, also noted that putting aside the enforceability of the 2002 agreement, Molly conceded that she "would be bound to a one-year deferral of the payment due on August 1, 2002 under the 2000 [o]rder (absent any other default by Henry)." On appeal, Molly does not deny that she made such a concession. Consequently, because the one-year postponement of the August 1, 2002, payment is the only feature of the 2002 agreement on which our analysis depends, Mollys arguments concerning enforceability of the 2002 agreement are moot.
VI. The Amount of the Arrearages
Under the foregoing analysis, Henrys first breach of the 2000 order (as modified by the 2002 agreement) occurred on August 1, 2003, when Henry failed to make the payment required under paragraph 5(c) of the 2000 order (and postponed by paragraph 2 of the 2002 agreement). Thirty days later, because he still had not made that payment, he became obligated to make an additional payment of $750,000, pursuant to paragraph 6(a) of the 2000 order.
Next, on December 4, 2003, Henry breached his obligation to maintain sufficient life insurance. Consequently, on that date all remaining spousal support payments under paragraphs 5(c) through 5(j) became immediately due and payable, pursuant to paragraph 14(f) of the 2000 order.
In sum, Henry owed Molly (1) a payment of $5,051,370 on August 1, 2003; (2) an additional payment of $750,000 on August 31, 2003; and (3) an additional payment of $35,141,706 on December 4, 2003. Each of those payments began to accrue simple interest, at the statutory rate of 10 percent annually, when they became due and went unpaid. (In re Marriage of Cordero (2002) 95 Cal.App.4th 653, 657; Code Civ. Proc., §§ 685.010, subd. (a); 685.020, subd. (b).)
There are only two further issues we need to address. Henry argues that because paragraph 4 of the 2002 agreement provided for acceleration of remaining spousal support payments under certain circumstances having to do with the share price of GMST stock, the 2002 agreement "negated" both the acceleration provisions of the 2000 order and the $750,000 additional support payment provisions of paragraph 6(a) of the 2000 order. We disagree. Various paragraphs of the 2000 order specified certain circumstances in which remaining payments would accelerate. Paragraph 4 of the 2002 agreement specifies certain additional circumstances in which remaining payments would accelerate. Nothing in the text of the 2002 agreement suggests that the parties intended the acceleration conditions in the 2002 agreement to replace, rather than supplement, the acceleration conditions in the 2000 order. For similar reasons, the 2002 agreement did not eliminate the $750,000 additional support payment provisions of paragraph 6(a) of the 2000 order.
Finally, the trial court imposed a total of eight additional support payments of $750,000 each, i.e., one for every payment under paragraphs 5(c) through 5(j) of the 2000 order. Henry argues this was error, and we agree. Paragraph 6(a) of the 2000 order provides that (1) if any payment under paragraphs 5(c) through 5(j) is more than fifteen days late, it shall accrue simple interest at 10 percent annually; (2) if the payment is more than thirty days late, Henry must make an additional payment of $750,000; and (3) if the original payment or the additional $750,000 payment is more than six months late, then all remaining payments under paragraphs 5(c) through 5(j), plus the additional payment of $750,000, "shall become immediately due and payable in a lump sum." Paragraph 6(a) did not provide for additional $750,000 payments with respect to each of the accelerated payments, and there was no need to—acceleration of all remaining payments already imposed a substantial penalty (and a much more severe one than additional $750,000 payments) for failure to pay on time. Although Molly attempts to argue against this conclusion, she fails to articulate any construction of the language of paragraph 6(a) that would support her position. We therefore conclude that the trial court erred when it imposed eight additional support payments of $750,000 each. Only one additional payment of $750,000 was warranted.
Because each party has prevailed in significant respects on appeal, we conclude that they should bear their own costs of appeal. In reaching that conclusion, we do not determine who prevailed in the trial court for purposes of an award of attorneys fees and costs under paragraph 26(a) of the 2000 order. That determination must be made by the trial court in the first instance, if any party wishes to pursue such an award.
DISPOSITION
The judgment is reversed in part and affirmed in part, and the trial court is directed to enter a new judgment providing as follows: Henry owes Molly (1) a payment of $5,051,370 as of August 1, 2003; (2) an additional payment of $750,000 as of August 31, 2003; (3) an additional payment of $35,141,706 as of December 4, 2003, and (4) interest at the statutory rate of 10 percent annually on each of those three payments, to be calculated by the trial court on remand. The parties shall bear their own costs of appeal.
We concur:
MALLANO, P. J.
HASTINGS, J.