Opinion
E069560
12-04-2018
In re the Marriage of DONNA J. and BRIAN J. KELLY. DONNA J. KELLY, Appellant, v. BRIAN J. KELLY, Respondent.
Donna J. Kelly, in pro. per., for Appellant. Arias & Lockwood and Christopher D. Lockwood for 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. RID222667) OPINION APPEAL from the Superior Court of Riverside County. Joan F. Burgess, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Affirmed. Donna J. Kelly, in pro. per., for Appellant. Arias & Lockwood and Christopher D. Lockwood for Respondent.
In this action for marital dissolution, Brian J. Kelly requested that spousal support to his now ex-wife Donna J. Kelly be stepped down and reduced to zero as of January 1, 2017. The family court granted the request and, in a prior appeal, this court affirmed the order. (In re Marriage of Kelly (May 17, 2018, E066722) [nonpub. opn.] (Kelly I).)
While the first appeal was pending, Brian moved ex parte for an order terminating an earnings withholding order attached to his deferred compensation account, to conform to the order reducing spousal support to zero. The court granted the application, but Donna did nothing to modify or terminate the earnings withholding because she continued to receive money from Brian's account. Donna repaid Brian for one wrongful withholding, but she still did nothing to modify or terminate the earnings withholding because she received another withholding. Donna failed to respond to Brian or his attorney when they wrote to her about the continued withholding and rebuffed their efforts to resolve the issue informally, so Brian requested the family court order Donna to repay the money and to pay attorney fees and costs as a sanction. The court ordered Donna to repay the money within 30 days but denied Brian's request for sanctions.
As we did in the first appeal, and as is customary in appeals in dissolution proceedings, we refer to the parties by their first names for clarity and simplicity. No disrespect is intended.
On appeal, Donna argues the family court should not have entertained Brian's request for order (RFO) because he did not file a current income and expense declaration. Even if Brian was required to file an income and expense declaration, failure to do so was harmless and does not warrant reversal. We therefore affirm the order.
Brian has moved this court to impose sanctions on Donna for filing a frivolous appeal. Although we conclude Donna's appeal lacks merit, it is not so utterly devoid of merit to warrant sanctions. Therefore, we deny Brian's motion.
I.
FACTS AND PROCEDURAL BACKGROUND
On our own motion, we take judicial notice of the record in the first appeal, Kelly I, supra, E066722. (Evid. Code, §§ 452, subd. (d), 459, subd. (a).)
A petition for dissolution of the parties' 28-year marriage was filed on November 5, 2007. On February 10, 2010, a stipulated judgment of dissolution was entered. It included a stipulation for division of property executed by the parties, along with a waiver of discovery and an acknowledgement by Donna that her attorney was unable to adequately advise her with respect to the value of the community property estate because she directed her attorney to refrain from conducting discovery. A judgment on the reserved issue of spousal support was entered on March 12, 2010. The judgment awarded Donna $7,000 a month in spousal support. It included a so-called Gavron advisement that it is the goal of the State of California that a supported spouse shall become self-supporting within a reasonable time, taking into account the long duration of the marriage. At a hearing on January 24, 2008, i.e., prior to the entry of the stipulated judgment, the court also advised Donna, who was then not working, that it is the goal of the state that each party shall make a reasonable, good faith effort to become self-supporting within a reasonable period of time. The court acknowledged that the parties' marriage was more than 28 years, and told Donna that for that reason, it was not giving her a set period in which to become self-supporting. It emphasized, however, that she still had the obligation to make reasonable, good faith efforts to become self-supporting. (Kelly I, supra, E066722.)
In re Marriage of Gavron (1988) 203 Cal.App.3d 705.
On November 25, 2015, Brian filed a RFO terminating spousal support, based on his loss of employment, Donna's failure to make reasonable efforts to become self-supporting, and Brian's assertion that Donna was cohabiting. Donna filed a response, in which she detailed her efforts at becoming self-supporting and explained medical and personal reasons that made it difficult to do so. On January 12, 2016, Brian filed a RFO requiring Donna to reimburse him for the loss of the value of stock options she failed to exercise and which he could have exercised if she had informed him in a timely manner that she was not going to exercise them. (Kelly I, supra, E066722.)
On July 1, 2016, following testimony on April 29 and May 10, 2016, the court issued an order reducing support payments to $5,000 a month beginning on June 1, 2016, then stepping down in increments through December 2016. As of January 1, 2017, spousal support was terminated. The court reserved jurisdiction to award spousal support thereafter and ordered the parties to notify each other if they obtained employment. The court denied Brian's request for reimbursement for the unexercised stock options. (Kelly I, supra, E066722.)
On August 30, 2016, Donna filed a notice of appeal from the July 1, 2016 order. On May 17, 2018, this court affirmed that order. (Kelly I, supra, E066722.)
In the meantime, on June 12, 2017, Brian filed an ex parte application requesting the family court terminate an earnings assignment order to conform to the July 1, 2016 order that spousal support terminate as of January 1, 2017. The same day, the family court granted the application and reduced the earnings assignment to zero.
On August 14, 2017, Brian filed a RFO directing Donna to repay $1,248 that had been withheld from Brian's deferred compensation account pursuant to the earnings assignment the court had already ordered set at zero. In a supporting declaration, Brian stated the following: On or about December 16, 2016, Brian sent a letter to Donna "asking her to ensure that the earnings withholding order was terminated in a timely manner" in conformity with the family court's July 1, 2016 order terminating spousal support as of January 1, 2017, and directing Donna to modify the withholding order accordingly. Donna did not respond to the letter. On or about January 6, 2017, Brian's attorney wrote to Donna to inform her that she had been overpaid $1,228.80. Donna eventually repaid the money, but she did not remove or modify the earnings withholding because on April 21, 2017, an additional $1,248 was withheld from Brian's deferred compensation account. Brian wrote to Donna on April 21 and May 15, 2017, to inform her of the overpayment. And Brian's attorney wrote to Donna on June 7, 2017, "about this issue and [Donna's] failure to remove the earnings withholding order." As of the date of Brian's declaration, Donna had failed to respond to Brian and his attorney's letters and rebuffed all efforts to resolve the issue informally.
Brian requested the family court direct Donna to repay the $1,248 wrongly withheld from his deferred compensation account and order her to pay Brian "no less than $5,000 for attorney's fees and costs as sanctions for her conduct that prevented settlement and caused [Brian] substantial additional legal costs and litigation."
In a responsive declaration filed on September 28, 2017, Donna objected that Brian did not support his RFO with an income and expense declaration, as mandated by rule 5.92(b)(2)(A) of the California Rules of Court. Donna acknowledged that she had received money from Brian's deferred compensation account, and that she had received letters from Brian, from Brian's deferred compensation plan manager, and from Brian's attorney. Donna stated she assumed she was still receiving money because Brian's deferred compensation plan "believes this money belongs to me." Donna blamed the wrongful withholding on the family court for not properly splitting Brian's deferred compensation account as part of a qualified domestic relations order (QDRO). Donna did not declare that she had returned the latest overpayment or state that she had taken any steps to terminate or modify the earnings withholding order as directed by the family court on July 1, 2016.
All additional rule citations are to the California Rules of Court.
Contrary to Brian's statement in his declaration that Donna never responded to his or his attorney's letters, Donna stated she "exchanged emails and letters" with Brian and his attorney "to try and figure out why [she] was receiving this money."
At the October 10, 2017, hearing on Brian's RFO, Donna again argued Brian's deferred compensation account "was never split the way it should have been" as part of a QDRO and, therefore, she "just held on to the account." The family court responded, "This has nothing to do with the QDRO. You recall I reduced on a step-down plan your spousal support to zero. After it went to zero, you took $1,248. That was done by an income withholding until [Brian] could get the income withholding to be to zero. That does need to paid back." The court also explained that the order reducing Donna's spousal support to zero was not stayed pending the first appeal because Donna did not post an appeal bond, so Donna was required to comply with that order and to remove or modify the withholding order. The court ordered Donna to repay the $1,248.30 within 30 days. Because the court concluded Donna did not have any source of income, the court found that an award to Brian of attorney fees and costs as a sanction under Family Code section 271 "would operate as a hardship." Therefore, the court denied Brian's request.
Donna filed her notice of appeal on November 28, 2017.
II.
DISCUSSION
A. Brian's Failure to Submit a Current Income and Expense Declaration Was Harmless.
Donna contends the family court erred by granting Brian's RFO because he did not file a current expense and income declaration. Brian responds, "No income and expense report was necessary because the [RFO] had nothing to do with income or expense; the only topic was Donna's refusal to repay money belonging to Brian she admittedly never should have received."
Donna makes the same argument with respect to Brian's ex parte application to terminate the earnings withholding. Donna's notice of appeal states she was appealing solely from an order entered on November 14, 2017. (The family court entered its order granting Brian's RFO on November 13, 2017.) But, even if we were to construe Donna's notice of appeal to include the prior order granting Brian's ex parte application (see rule 8.100(a)(1)), we would reject it for the same reasons stated in the text.
Donna's brief contains references to various other matters that are either irrelevant to this appeal, are not included in the record, are not supported by record citations, or were resolved against her in the first appeal. We ignore them.
Previously, a moving party was only required to submit a current income and expense declaration if it was "appropriate" and "relevant" to the issue to be determined by their RFO. (Former rule 5.128(a), repealed eff. Jan. 1, 2013; see In re Marriage of Left (2012) 208 Cal.App.4th 1137, 1152; Burkle v. Burkle (2006) 144 Cal.App.4th 387, 403, fn. 6.) Under the current rules, however, an income and expense declaration is mandatory "[w]hen a party seeks orders for spousal or domestic partner support, attorney's fees and costs, or other orders relating to the parties' property or finances . . . ." (Rule 5.92(b)(2)(A); see rule 5.260(a).) A reasonable argument can be made that, liberally construed (rule 1.5(a)), rule 5.92 required Brian to file a current income and expense declaration with his RFO. At least in the broadest sense possible, an order directing Donna to repay money wrongly withheld from Brian's deferred compensation account was "relat[ed] to the parties' property or finances . . . ." (Rule 5.92(b)(2)(A), italics added.)
But even if we were to conclude the family court should not have granted Brian's RFO because he did not submit a current income and expense declaration, we may only reverse if we find the error was prejudicial. (Cal. Const., art. VI, § 13; Code Civ. Proc., § 475.) "'While a Rule of Court phrased in mandatory language is generally . . . binding on the courts . . . departure from it is not reversible error unless prejudice is shown.' [Citation.]" (In re Marriage of Steiner & Hosseini (2004) 117 Cal.App.4th 519, 524.)
Although the Rules of Court no longer appear to peg the necessity of an income and expense declaration to whether it is strictly relevant to the relief sought, relevance is still important in determining whether an order granting the RFO in the absence of an income and expense declaration constitutes harmless error. For example, when a party submits a RFO seeking modification of a spousal and/or child support order, they must show changed circumstances and submit an income and expense declaration showing the current state of their finances. Failure to submit an income and expense declaration in that situation is a proper ground for denying the RFO. (In re Marriage of Tydlaska (2003) 114 Cal.App.4th 572, 574-576.) And, unless the moving party introduces evidence of their current financial status, a family court probably errs prejudicially if it grants the RFO in the absence of a current income and expense declaration.
In contrast, the question before the family court on Brian's most recent RFO was not whether Brian or Donna's financial situation had changed, such that the spousal support order should be modified to reflect their current circumstances. Instead, the issue before the family court was whether Donna had wrongly received and retained money withheld from Brian's deferred compensation account after the court had already set spousal support at zero and directed Donna to modify the earnings withholding. Brian's current financial state was simply irrelevant to that determination. Therefore, even if we were to conclude Brian technically failed to comply with rule 5.92(b)(2)(A), any error by the family court in granting the RFO was harmless. (See Burkle v. Burkle, supra, 144 Cal.App.4th at p. 403.)
B. Brian's Motion for Sanctions Is Denied.
On May 9, 2018, this court reserved ruling on the motion for consideration with this appeal.
Brian has moved this court for an award of sanctions, arguing Donna's appeal is "completely frivolous" and that he should be compensated for the wasted time and money he expended in responding to it. Brian also argues an award of sanctions is necessary in this case because otherwise Donna "will not be deterred from filing future frivolous appeals." Although we empathize with Brian, we conclude Donna's appeal is not so utterly devoid of merit as to warrant sanctions.
"[Code of Civil Procedure s]ection 907 provides that '[w]hen 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.' An appeal is considered frivolous '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.' (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650 . . . ; see Cal. Rules of Court, rule 8.276(a).) 'The two standards are often used together, with one providing evidence of the other. Thus, the total lack of merit of an appeal is viewed as evidence that appellant must have intended it only for delay.' (In re Marriage of Flaherty, supra, 31 Cal.3d at p. 649.)" (Diaz v. Professional Community Management, Inc. (2017) 16 Cal.App.5th 1190, 1216.)
"An appeal that is simply without merit is not by definition frivolous and should not incur sanctions." (In re Marriage of Flaherty (1982) 31 Cal.3d 637, 650.) If an appeal raises colorable, but ultimately unmeritorious issues, it is not frivolous. (L.G. v. M.B. (2018) 25 Cal.App.5th 211, 232; Avila v. Continental Airlines, Inc. (2008) 165 Cal.App.4th 1237, 1262.)
Brian argues Donna's "contention that an income and expense statement was required before money admittedly overpaid could be ordered returned is frivolous." We have already concluded a reasonable argument can be made that Brian was required to file an income and expense declaration because his RFO was in some sense related to the parties' property and finances. To be fair, a reasonable (and perhaps stronger) argument can be made to the contrary. But if fair-minded attorneys can disagree on the most reasonable interpretation of rule 5.92(b)(2)(A), then by definition Donna's argument cannot be deemed unreasonable and frivolous. That we ultimately conclude Donna's argument fails for lack of prejudice does not dictate a finding that her appeal is completely and absolutely lacking in merit and frivolous. Therefore, we deny Brian's motion.
III.
DISPOSITION
The order granting Brian's RFO is affirmed. Brian's motion for sanctions is denied.
Brian shall recover his costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
McKINSTER
J. We concur: RAMIREZ
P. J. MILLER
J.