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Reid v. Reid (In re Marriage of Reid)

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION TWO
Oct 22, 2018
No. A150394 (Cal. Ct. App. Oct. 22, 2018)

Opinion

A150394

10-22-2018

In re the Marriage of LINDA and LINTO REID. LINDA REID, Appellant, v. LINTO REID, Respondent.


In re the Marriage of LINDA and LINTON REID. LINDA REID, Appellant, v. LINTON REID, Respondent.

ORDER MODIFYING OPINION NO CHANGE IN JUDGMENT

BY THE COURT:

The opinion filed on October 22, 2018, is modified as follows:

In the caption of the opinion, the name Linto Reid is corrected to read: Linton Reid.

There is no change in judgment. Dated: __________

/s/_________

Kline, P.J.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Sonoma County Super. Ct. No. SFL67431)

Linda Reid appeals from a judgment dissolving the parties' marriage and enforcing a settlement agreement reached in mediation. She contends the agreement was invalidated by the disqualification of the judge pro tem, who was also the mediator, and was unenforceable because it was materially uncertain and contemplated execution of further agreements. She further claims the judgment is void because final declarations of disclosure were neither served nor mutually waived; the court improperly added provisions to the judgment that were not part of the agreement; the provisions of the judgment and settlement agreement waiving and terminating jurisdiction over spousal support violated public policy; and the court abused its discretion in denying a continuance. We affirm.

BACKGROUND

The parties married in 1974 and separated in July 2014. After appellant filed a petition for dissolution of marriage on July 24, 2014, an attempt to resolve the case through mediation in August 2014 was unsuccessful.

In September 2014, appellant filed a petition for relief from breach of trust (Prob. Code, § 16420) involving trusts established by her parents before her father's death (the Don and Lucille Smothers 1990 Restated Trust and related trusts including the Don and Lucille Smothers Survivor's Trust). Appellant's claims included breach of fiduciary duty by the trustee, Mark Smothers (appellant's brother), and lack of capacity and/or undue influence with regard to transfers of trust assets executed by her mother.

Both cases involved family businesses owned by the parties, the trust, and Smothers and his wife. According to respondent, the parties' shares in two of the businesses, R&S Real Estate Investments, LLC (R&S) and Smothers & White, Inc. (S&W, an automobile dealership), had a combined value of at least $3 million. Respondent had worked at S&W since 1985, and had been president since 2008.

On May 7 and 8, 2015, the parties, Smothers and his wife engaged in mediation that was intended to resolve both cases, with mediators William Doty and Roger Lewis. Appellant was represented at the mediation by four attorneys: her divorce attorney, Robert Montgomery, two trust attorneys and one tax attorney. The mediation resulted in a handwritten Memorandum of Agreement (MOA) that was signed by the parties, Smothers, his wife, and their respective counsel, all present.

The MOA stated that Roger Lewis would "draft MSA [marital settlement agreement] and all related documents" and that Doty would be appointed judge pro tem for "all enforcement of MOU and MSA and any disputes about interpretation of Lucille's trust amendments post 6/2008." In June 2015, Lewis circulated a draft MSA and over the next months the parties exchanged correspondence raising issues and proposing modifications and Lewis offered revisions. No MSA was executed.

By stipulation and order filed on August 17, 2015, Doty was appointed temporary judge "to hear and determine" the matter "until final determination thereof." The stipulation and order provided that Doty "may act as a mediator or settlement conference judge" and "such role shall not disqualify him from acting as the temporary judge pursuant to this Stipulation and Order," and that he would "hear all issues involving interpretation, enforcement and implementation of the Memorandum of Agreement and the Marital Settlement Agreement in this matter."

One of the provisions of the MOA required appellant to refinance or pay off the mortgage on the parties home in Hillsboro. In July or August 2015, respondent assigned his interest in the residence to appellant, after being instructed by Doty to do so and after the parties entered a stipulation and order so requiring.

The stipulation and order provided that respondent would sign an interspousal transfer deed to transfer title of the Hillsboro property to appellant, but "this deed shall be null and void and [appellant] shall sign a deed transferring the property back to the community, if [appellant] fails to sign an MSA consistent with the provisions of the May 8, 2015 Memorandum of Understanding within a reasonable time."

Also in August 2015, the superior court (Judge Shaffer) approved a settlement agreement reached by the parties to the trust case and dismissed that action.

On October 8, 2015, respondent filed a request for order seeking to enforce the MOA and enter judgment thereon, stating that the parties had been unable to agree upon language for the MSA. Respondent submitted a proposed judgment which, he said, "contains what I contend is the reasonable interpretation of vague language contained in the MOA . . . ." Opposing the request for order, appellant argued that the terms of the MOA were "vague, ambiguous, and unenforceable" and that the proposed judgment added terms that were not in the MOA and deleted terms that were in the MOA.

In a December 23, 2015, email, Doty stated that if the dissolution action could not be settled, he "would likely deny the motion because the MOA is too unclear for purposes of enforcement," although there would be a complete hearing before he ruled.

On January 28, 2016, the date scheduled for the hearing, Doty initially stated his understanding from counsel that a hearing would not be necessary because appellant had withdrawn her opposition to enforcement of the MOA, and that counsel were aware that if a hearing was necessary, Doty's tentative ruling would be to grant the motion, albeit not necessarily all the terms of the proposed judgment. Appellant's attorney confirmed that she had withdrawn her opposition to the motion and "for the most part" agreed with the "October 2015 MSA, drafted by Roger Lewis," with "some other provisos." After spending the day going over specific terms with the parties, Doty granted the motion to enforce the MOA, reiterating that there was no opposition to his doing so. The parties were given Doty's tentative decision in the form of an "attachment to judgment" and told judgment would be entered on February 10 absent written objections to the attachment. The parties did file objections, and a hearing was set for March 25.

On February 11, 2016, appellant's attorney appeared in superior court and represented that the parties were working with Doty, and a draft judgment was circulating which counsel was "confident" would be signed.

On March 24, 2016, the day before the scheduled hearing on the proposed attachment to judgment, appellant substituted new counsel, Michael Watters, in place of Montgomery. The hearing was reset for May 23. At 7:30 a.m. on May 23, Watters requested an additional continuance and the hearing was reset for June 7.

On June 3, 2016, Watters asked Doty to postpone the hearing and consider recusing himself due to allegedly improper conduct after he was appointed judge pro tem, including ex parte contact with various individuals and counsel and giving advisory opinions about intended actions on pending issues. Respondent opposed the request for recusal, Doty declined to withdraw, and on June 20, appellant filed a request for order seeking to disqualify Doty. Two days later, Doty informed the parties that, without conceding his disqualification, he would ask another judge to act in his place pursuant to Code of Civil Procedure section 170.3, subdivision (c). Doty filed his voluntary withdrawal the same day.

Appellant's supporting declaration stated, among other things, that she did not understand the terms of the MOA, and that Doty rudely pressured her to accept the "deal," excluded her from some mediation sessions and refused to accept an appraisal she offered while accepting one from respondent.

Doty's letter refers to Code of Civil Procedure section 170.3, subdivision (c)(1), which describes the procedure for a party to seek disqualification if a judge who "should disqualify himself or herself refuses or fails to do so." The provision for a challenged judge to seek replacement without conceding disqualification is set forth in subdivision (c)(2) of the statute.

On August 5, 2016, respondent filed his motion to enforce the MOA in superior court, as well as a request for sanctions, with a hearing date of September 16. On August 25, appellant replaced Watters with herself, acting in propria persona. Then, on September 6, she filed a notice of limited scope representation in order to have attorney Elissa Urlik represent her in opposing the motion, and the hearing was reset for November 4. The day before, November 3, appellant replaced Urlik, again representing herself in pro. per.

According to respondent's counsel, after respondent agreed to a continuance of the hearing from September 16 to October 7, Urlik filed an ADA accommodation request seeking a four to five-week continuance, to which respondent objected. The court had ruled on the ADA request by the time of the November 4 hearing.

At the hearing on November 4, 2016, Judge Boyd denied appellant's request for a 60-day continuance, over her repeated protests that she was not equipped to represent herself. The court concluded that the parties' agreement, reflected in writing in the MOA, was sufficiently definite as to its essential terms, and ordered that judgment be entered consistent with the provisions of the MOA "and the customary general terms of a dissolution judgment." Finding that appellant had "increased the cost of this litigation by hindering settlement and obstructing respondent's effort to have the May 8, 2015 Memorandum of Agreement confirmed and a judgment to be entered in this matter," the court ordered appellant to pay sanctions in the amount of $28,600, to be deducted from the $600,000 equalizing payment due to be paid by respondent pursuant to the MOA.

Later in the hearing, after the motion to continue had been denied, appellant told the court that attorney William Paynter had agreed to represent her if she was able to obtain a continuance. Paynter subsequently substituted into the case on December 7, 2016, and represents appellant on this appeal.

Respondent had requested sanctions of "$84,202.40 or in the alternative, 422,545.47."

Judgment was filed on December 21, 2016, and appellant filed her notice of appeal on January 9, 2017.

I.

Appellant's argument that the MOA was invalidated by the "disqualification" of Judge Doty, "whose actions were instrumental in inducing appellant to sign the MOA," is meritless.

First, at the time the MOA was signed, Doty was acting solely as mediator; he was not appointed as judge pro tem until after the MOA was signed. Indeed, one of the provisions of the MOA was for Doty to be appointed as judge pro tem.

Second, Doty was not disqualified.

Appellant's disqualification motion argued that Doty breached his duties as a judge pro tem by accepting the position while continuing to act as mediator, and that he was not impartial. In response to the motion, Doty invoked the provisions of Code of Civil Procedure section 170.3, subdivision (c)(2): "Without conceding his or her disqualification, a judge whose impartiality has been challenged by the filing of a written statement may request any other judge agreed upon by the parties to sit and act in his or her place." Doty advised the parties that he would ask one of two named family law judges to take his place (appellant having previously disqualified the third family law judge then on the bench) and asked if there were objections to either of them. Appellant then withdrew her request for disqualification "based on Judge Doty's voluntary resignation as judge pro tem."

Appellant's supporting declaration stated, among other things, that she did not and does not understand the terms of the MOA, that Doty rudely pressured her to accept the "deal," excluded her from some mediation sessions and refused to accept an appraisal she offered while accepting one from respondent.

Appellant's reliance upon Hayward v. Superior Court (2016) 2 Cal.App.5th 10 (Hayward) is misplaced. Based on Hayward, appellant argues that because Judge Doty voluntarily withdrew after she filed her request for disqualification, without filing written opposition, he is deemed to have admitted the factual allegations of the disqualification motion and the orders he issued are void.

Hayward followed the rule that " '[w]hen no answer is filed in response to a statement of disqualification, the facts set out in the statement are taken as true.' " (Hayward, supra, 2 Cal.App.5th at p. 37, quoting Urias v. Harris Farms, Inc. (2015) 234 Cal.App.3d 415, 424.) Code of Civil Procedure section 170.3 provides three options to a judge whose impartiality is challenged with a disqualification motion: The judge may, "without conceding disqualification," request another judge to serve (Code Civ. Proc., § 170.3, subd. (c)(2)); the judge may file a consent, in which case the presiding judge appoints a replacement (id., subd. (c)(3)); or the judge may file a written verified answer admitting or denying the allegations in the disqualification statement and providing any additional relevant facts. (Id., subd. (c)(3)). (Hayward, at p. 37.) If the challenged judge does not file a consent or answer, he or she is "deemed to have consented" to the disqualification. (Code Civ. Proc., § 170.3, subd. (c)(4).) In Hayward, the temporary judge followed none of these procedures. As a result, the trial court found her disqualified pursuant to subdivision (c)(4) of section 170.3 of the Code of Civil Procedure, and, as stated above, the facts alleged in the request for disqualification had to be taken as true. We specifically noted that the judge in Hayward did not take advantage of section 170.3, subdivision (c)(2), which expressly allows a challenged judge to withdraw from the case without conceding disqualification. (Hayward, at pp. 37, 39.) Doty did invoke this provision. Consequently, he was not found to be disqualified and there is no basis for taking the allegations of the disqualification motion as true.

Nor does Hayward support finding Doty's orders void or invalidating the MOA. In Hayward, the parties' settlement agreement was negotiated after the judge pro tem was appointed, and the judge made various rulings during the course of the negotiations. The disqualification statement alleged that the temporary judge failed to make required disclosures at the outset, as well as actual bias against the wife. Because " 'disqualification occurs when the facts creating disqualification arise,' " and one basis for disqualification in Hayward was the failure to make required disclosures, all the judge's orders were void. (Hayward, supra, 2 Cal.App.5th at pp. 42-45.) As Doty did not become a temporary judge until after the MOA was signed, his conduct as temporary judge could not have tainted the MOA.

To the extent appellant argues that temporary judge Doty's conduct impacted the judgment, the point is unavailing. At the hearing on enforcement before Doty in January 2016, appellant's counsel represented that appellant had withdrawn her opposition to the motion to enforce. The attachment to judgment that Doty prepared after the parties' continued negotiations that day ultimately did not become the judgment. Instead, after Doty's recusal, a new motion to enforce the MOA was litigated and the actual judgment enforcing it was rendered by Judge Boyd.

II.

Appellant contends the MOA cannot be enforced because it was materially uncertain and contemplated the execution of additional agreements, including a marital settlement agreement (MSA). This challenge to the MOA is also unavailing.

"A settlement agreement is a contract, and the legal principles which apply to contracts generally apply to settlement contracts." (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810.) This principle applies to marital settlement agreements. (In re Marriage of Iberti (1997) 55 Cal.App.4th 1434, 1439.) " '[I]f an essential element is reserved for the future agreement of both parties, as a general rule the promise can give rise to no legal obligation until such future agreement. [Citation.]' " (Weddington, at p. 812.) A trial court "may not 'create the material terms of a settlement, as opposed to deciding what terms the parties themselves have previously agreed upon.' " (Bowers v. Raymond J. Lucia Companies, Inc. (2012) 206 Cal.App.4th 724, 732, quoting Weddington, at p. 810.) But "a contract will be enforced if it is sufficiently definite (and this is a question of law) for the court to ascertain the parties' obligations and to determine whether those obligations have been performed or breached. [Citations.] Stated otherwise, the contract will be enforced if it is possible to reach a fair and just result even if, in the process, the court is required to fill in some gaps. [Citation.]" (Ersa Grae Corp. v. Fluor Corp. (1991) 1 Cal.App.4th 613, 623.) We review the trial court's determination whether the parties entered into a binding settlement for substantial evidence. (In re Marriage of Assemi (1994) 7 Cal.4th 896, 911.)

Appellant maintains that the MOA was not an enforceable agreement because it contemplated future agreements in that it called for Roger Lewis to draft "MSA and all related agreements," and for amendment of the operating agreements for "R+S" and "S+S." Appellant notes that the draft MSA Roger Lewis circulated in June 2015 was not executed, and states that she never agreed to the proposed operating agreement amendments. But there is no suggestion in the MOA that it was conditional upon completion of one or more provisions. For example, it did not say that the parties' agreement would become final upon execution of the MSA that Roger Lewis would draft, only that Roger Lewis would draft "MSA and all related agreements." The same is true of the provision for amendment of the operating agreements, and that provision was specifically included in the settlement agreement that was approved by the court in the trust action. Contrary to appellant's interpretation, the MOA contains language clearly indicating it was intended to be a binding agreement fully resolving both the dissolution and trust actions: "All trust past actions (mom and dad's), all fees & costs & trust expenditures for atty fees, etc. are ratified & approved. No one objects. No one pays or reimburses any fees or costs. All hearing dates (fam law and probate) will be continued for calendar control purposes for settlement. Both cases are fully resolved. Family law trial date vacated. No further discovery. All proceedings stayed at present."

The MOA stated, "amend R+S operating agreement + S+S so parties are protected, including lease and market rate up to rent amount."

It was through the trust action that the court had jurisdiction over the entities with authority to make changes to these agreements, as the parties' co-owners (appellant's brother and his wife, the trust) were parties to that action but not to the dissolution.
The settlement agreement in the trust case states: "At the end of mediation on May 8, 2015 certain of the Parties signed a 'Memorandum of Agreement', which includes, without limitation, a provision to '. . . amend [R& S Real Estate Investments LLC] operating agreement [and] [S & S Investments LLC] so parties are protected, including leases and market rate up to rent amount.' "

Appellant views the fact that the parties did not reach agreement on the draft MSA as demonstrating the MOA was uncertain. But this does not necessarily follow. "The parties' conduct subsequent to the formation of a contract, 'including the dispute which arises and the remedy sought,' may be relevant in determining which terms they considered essential. [Citations.] However, few contracts would be enforceable if the existence of subsequent disputes were taken as evidence that an agreement was never reached." (Patel v. Liebermensch (2008) 45 Cal.4th 344, 351-352.) After Lewis circulated the draft MSA, appellant's attorney in July 2015 proposed various modifications and additions. In a subsequent letter dated September 28, 2015, addressing Lewis's "efforts in revising" the MSA, counsel for respondent stated, "There are sections of the draft that I assume were requested (insisted upon) by [appellant's] counsel(s) that are not in, or even implied in, the MOA, some of which are simply unacceptable. There are sections of the new draft that are not acceptable nor will ever be with any level of negotiation." The parties' failure to agree to terms in the proposed MSA elaborating upon or adding to the MOA does not demonstrate that the MOA itself was fatally uncertain as to its essential provisions.

For example, appellant wanted the MSA to provide that she was "guaranteed to receive approximately $2 million from her mother's life insurance trust," as she claimed had been represented in the mediation by respondent and the parties to the trust litigation, but there was no reference to the life insurance trust in the MOA, and the alleged guarantee does not appear in the court-approved settlement agreement in the trust litigation.

In arguing that the provisions of the MOA were too uncertain to be enforceable, appellant notes that at the trial court hearing, counsel for respondent stated that the agreement was clear and ambiguous "except for, you know, a couple of vague parts." She neglects to mention, however, that counsel went on to explain why the enforceability of the MOA was not undermined by any vagueness in two specific provisions of the MOA, one the provision for amendment of the operating agreements for R&S and S&S, and the other providing for a "60/40 split on income" from "R+S." As to the first, counsel argued the provision in the MOA had been complied with by "Mr. Bailey completing the operating agreement and circulating it, and there's been no objection to it. [¶] Three-quarters of the owners of RNS have agreed to it, that's of record. . . . So there's no evidence or any indication that the operating agreement that was amended has any problems contained in it . . . that was required by the agreement and it's been performed." Ultimately, the judgment simply provided, "R&S Investment, Inc. Operating Agreement to be amended to provide for fair market rent[,]" thus addressing the essence of the MOA provision.

The second provision stated, with respect to R&S: "(a) 60/40 split on income [¶] 60W/40H [¶] (b) when H or W decease (the first), then survivor gets all income until their death [¶] (c) Both H + W must will their 25% ownership in R+S to their children and/or gchildren in any % they choose" The alleged vagueness was due to the parties' disagreement over the meaning of the term "income." The respondent's counsel argued, "[t]hat's just an interpretation. The court is not making up a new clause with respect to the understanding and the meaning of income in the context of the agreement. [¶] We've attached declarations from Frank Bailey and Ray Ponds, CPA, at Pisenti & Brinker with respect to what the term 'income' means in common usage."

Appellant claims that Bailey, an attorney who represented R&S, admitted that the terms of the MOA were "hopelessly unenforceable." Bailey's declaration discussed the reference to "income" in the MOA as "ambiguous" from the point of view of the company, because the current operating agreement did not distinguish between three types of "income" that can exist in the context of "closely held family partnerships," and explained that "fundamental amendments" of the operating agreements were required to achieve the parties' intent in the MOA. Bailey did not state that the MOA itself was ambiguous or unenforceable with respect to the parties' intentions. Read in context, we see no ambiguity in the term "income." The MOA quite obviously drew a distinction between "income"—i.e., income from the company's rentals that was to be split 60/40— and "capital interests"—the ownership interests required to be passed from the parties to their children and/or grandchildren.

Appellant complains that no circumstances justifying a waiver of spousal support were set forth in the MOA. The relevant circumstances were the provisions defining appellant's right to income and assets. These included that appellant was to receive ownership of the Hillsboro house (with the requirement that she pay off the mortgage or refinance); a $600,000 payment from respondent; the Sun River property (which was her separate property); all of S&S Investments, LLC (her separate property), half of the parties' 50 percent ownership interest in R&S, and 60 percent of the parties' combined 50 percent interest in the income from R&S (according to appellant's December 2014 income and expense declaration), a Mercedes Benz, and a guarantee that her inheritance under her parents' trust would not be reduced. This guarantee was included in the court-approved settlement of the trust litigation.

The MOA expressly contemplated that appellant would be receiving a considerable amount of money upon her mother's death, as indicated by the provision regarding the Hillsboro house, which stated that appellant "must pay off or refi (A) as soon as possible, best efforts to be made OR if not successful, (B) when Mom dies (cuz [appellant] then has $)." According to appellant's December 2014 income and expense declaration, her average monthly investment income from S&S Investments and R&S Investments totaled $9,625. Plainly, the MOA provided appellant with significant present sources of income and additionally contemplated that she would be receiving substantial funds upon her mother's death. The circumstances reflected in the MOA were thus consistent with, and justified, the parties' agreement that there was no need for present spousal support, and no need for spousal support after appellant received her inheritance because she would be self-supporting. (See In re Marriage of Vomacka (1984) 36 Cal.3d 459, 469 (Vomacka).) The MOA and judgment left open the possibility that appellant could seek support if circumstances changed in the interim.

Appellant's other claims regarding uncertainty require little comment. There was no ambiguity as to whether appellant was required to refinance or pay off the mortgage on the Hillsboro property or refinancing the Hillsboro property. As indicated above, the term "retirements" was not ambiguous, as respondent's October 2014 schedule of assets and debts had identified three IRA accounts and provided their values. The provision regarding personal property was not inconsistent. Appellant's discussion of terms in the judgment respondent proposed with his initial request to enforce the MOA is irrelevant as that judgment was not the one entered.

Appellant's argument that the judgment improperly included terms that were not part of the MOA, and fails to include terms that were in the MOA, is without merit. Her opening brief points to no specific terms as problematic but generally claims the court lacked authority to order that "customary general terms of a dissolution judgment" be included in the judgment. As respondent notes, general and boilerplate provisions such as reservation of the court's jurisdiction to enforce the judgment, specification of the governing law and for the judgment to supersede previous orders either reflect legal requirements or constitute "usual and reasonable conditions" that are deemed to be contemplated by the parties as part of their agreement. (Patel v. Liebermensch, supra, 45 Cal.4th at p 349.) Several paragraphs of the MOA, pages 10 through 12, and 16, that appellant, in her reply brief, argues were not included in the judgment pertain to the trust litigation and were included in the settlement agreement in that case. Also in her reply brief, appellant complains that portions of paragraph 7 of the judgment, concerning R&S, were not part of the MOA. This paragraph of the judgment elaborates upon but does not alter the meaning of the MOA.

III.

Appellant contends the judgment is void because respondent did not serve a final declaration of disclosure and there was no mutual waiver of the requirement that the parties exchange such declarations. Family Code section 2105 requires that a final declaration of disclosure and current income and expense declaration be provided by each party to the other "before or at the time the parties enter into an agreement for the resolution of property or support issues other than pendente lite support," "unless the parties mutually waive the final declaration of disclosure." Under section 2106, "Except as provided in subdivision (d) of Section 2105, Section 2110, or absent good cause as provided in Section 2107, no judgment shall be entered with respect to the parties' property rights without each party, or the attorney for that party in this matter, having executed and served a copy of the final declaration of disclosure and current income and expense declaration."

Further statutory references will be to the Family Code unless otherwise specified.

The record reflects that respondent did serve a "final declaration of disclosure" on October 29, 2015, which appellant acknowledged receiving. Appellant's claim, therefore, appears to be that respondent failed to serve an updated final declaration of judgment before judgment was entered in December 2016. She stated in her declaration in the trial court that she had "received no updates on the financial status of the companies since the Disclosure Statements was [sic] served, and this did not include information about some of the entities," that she was "unaware of the current profit and expenses of each entity," and that the final disclosure statement she received from respondent in October 2015 "did not provide values for the partnerships but did provide a number of valuations."

Pursuant to respondent's request, we take judicial notice of proofs of service of the final declaration of disclosure on appellant's attorney and Doty that were filed in superior court on October 30, 2015.

The record also reflects that the parties waived final declarations of disclosure as follows: Toward the end of the January 28, 2016, hearing before Judge Doty, Roger Lewis stated, "I was also thinking that the record should reflect that the parties have stipulated to waive final declarations of disclosure." Respondent's counsel replied, "[t]hat's fine[,]" and appellant's counsel agreed, "[t]hat's fine, yes."

Respondent states that he served an augmented final declaration of disclosure containing an updated schedule of assets and debts on November 22, 2016, and asks us to take judicial notice of a proof of service so stating that was filed in the trial court almost eight months later, on July 13, 2017. Were we to take judicial notice of this document, it would confirm the fact that it was filed but, as we may not take judicial notice of the truth of its contents (Hill v. San Jose Family Housing Partners, LLC (2011) 198 Cal.App.4th 764, 770), it would not establish that the declaration was in fact served on the date stated or that it contained the updated schedule. Moreover, the proof of service was filed well after judgment was entered in December 2016. We decline to take judicial notice of these documents, as we find them unnecessary to our resolution of the issue on appeal.
We note, however, that the filing of an updated schedule of assets and debts would be consistent with the requirement that parties waiving a final declaration of disclosure nevertheless exchange current income and expense declarations. (§ 2105, subd. (d)(2).)

Appellant does not address this waiver in her briefs, and in support of her assertion that she did not waive the requirement, she cites only her statement to that effect in her trial court declaration. Nor did appellant attempt to secure compliance with the disclosure requirements, despite the existence of specific statutory procedures for doing so. (§ 2107.) Moreover, appellant does not indicate that she served a final declaration of disclosure and, based on our review, the record does not reflect her having done so. A failure by appellant to serve a final declaration of disclosure would be consistent with the parties having waived such exchange, and would also preclude appellant's attempt to later avoid the judgment on the basis of respondent's alleged noncompliance. (See In re Marriage of Steiner & Hosseini, (2004) 117 Cal.App.4th 519, 528 (Steiner).)

Under section 2107, if a party fails to serve a preliminary or final declaration of disclosure, or to provide the required information "with sufficient particularity," the complying party "may, within a reasonable time, request preparation of the appropriate declaration of disclosure or further particularity." (§ 2107, subd. (a).) If the request is met with noncompliance, the complying party may take actions including filing a motion to compel further response and/or requesting an order "preventing the noncomplying party from presenting evidence on issues that should have been covered in the declaration of disclosure." (§ 2107, subd. (b).) Under subdivision (c) of section 2107, "[i]f a party fails to comply with any provision of this chapter, the court shall, in addition to any other remedy provided by law, impose money sanctions against the noncomplying party." Subdivision (d) of section 2107 states that "if a court enters a judgment when the parties have failed to comply with all disclosure requirements of this chapter, the court shall set aside the judgment," with specified exceptions.

In any event, a failure to comply with the mandatory exchange of declarations of disclosure does not require that the judgment be set aside absent a showing of prejudice. (Steiner, supra, 117 Cal.App.4th at pp. 522, 528; In re Marriage of Jones (1998) 60 Cal.App.4th 685, 694-695; Cal. Const. art. VI, § 13.)

The bulk of appellant's argument focuses on the requirement that final declarations of disclosure be exchanged before judgment can be entered. The judgment in this case, however, was enforcing the parties' agreement in the MOA. Appellant does not explain how a failure to provide updated financial information could affect the validity of the agreement the parties reached in May 2015.

The parties did exchange preliminary declarations of disclosure prior to mediation.

Appellant does assert that the lack of a final declaration of disclosure "impact[ed] the outcome and prejudiced" her rights in that it "made the MOA uncertain, particularly with respect to what were the 'retirements' to be divided." Appellant points out that she repeatedly stated at the hearing below that she "could not have entered into a settlement of the dispute because she was not provided the information necessary to determine respondent's assets." At the hearing, appellant told the court, "we never came to an agreement because how can you obtain a divorce when you do not know what you own out of all the various properties of the dealership." She said she had been coerced to sign the MOA, she did not understand certain of its provisions regarding the $600,000 equalizing payment respondent was to pay her, and she wanted "full discovery of where my husband has all the money I was living off of . . . ."

The MOA indicates: "600K H ? W. S+W Inc shares to H [¶] (A) 5% interest [¶] (B) interest only, minimum 1 yr [¶] (C) H can pay off after 1 yr w/o penalty [¶] (D) H must pay off when mom dies ([illegible] $ from mom's estate)" Appellant said she did not understand what was meant by points (A), (B) and (C).

Regarding "retirements"—the only specific provision of the MOA appellant points to in her prejudice argument—the MOA indicates, "50/50 on all retirement." At the hearing, in response to questions from the court, appellant acknowledged that she agreed to the 50/50 split of retirement funds but maintained that she did not know and had not been able to find out what funds existed. But, as noted above, respondent had identified three IRA accounts and provided their values in his October 2014 schedule of assets and debts. Appellant does not offer any reason for believing there were other sources of retirement funds.

When appellant said she "would like to know where all the moneys are at," the court asked, "You don't disagree to split them 50/50, but you want to know . . . ." Appellant said, "I want to know what all the entities and properties and everything else that [respondent] has that he's never told me over the 40 years," then agreed ("[t]hat's correct") when the court stated, "You do acknowledge the agreement was to divide the retirement 50/50, but you want to find out what the retirements are." Appellant went on to say, "I never had full disclosure on the full discovery. I've been denied, refuted and ignored. And I've had other attorney, Jeff Titus, the tax man that tried to obtain different things and it's all through Mr. Frank Bailey who represented three different families at the same time."

Appellant's position at the hearing on the motion to enforce the settlement was that she had not agreed to the terms of the MOA and had never been provided the information necessary for her to be able to do so. In the negotiations that led to the MOA, however, appellant was represented by four attorneys, all of whom signed the MOA. Much of appellant's concern at the hearing on the motion to enforce the settlement appeared to be about property that was, or had been, in the trust that was the subject of her separate trust litigation. Appellant believed she was being denied the inheritance her father intended for her as "heiress to a company that involves my father's legacy." The trust litigation, also addressed in the MOA, had been resolved by settlement and judgment, and the court repeatedly told appellant that issues related to the trust were not before the court in the present case.

Appellant's concerns may also have related to a disagreement between the parties as to the community or separate property character of stock in some of the businesses. Prior to the mediation, in April 2015, respondent had filed a motion to bifurcate the issue of character and ownership of shares in R&S and S&W, viewing this as one of the most significant points of disagreement between the parties. Some of the shares had been acquired by the parties jointly, by purchase or gift, while others had originally been in appellant's name but had been transmuted to community property in 2010. According to respondent's declaration, appellant was contending that all the shares were her separate property.

Appellant's protestations that she did not understand the MOA and had not agreed to it were undermined not only by her signature on the document and those of the four attorneys then representing her, but by her lack of credibility at the hearing. For example, appellant complained that Urlik, her most recent attorney, had been hired only to obtain the original trust and a continuance, not to "have anything filed under my behalf on anything to do with this divorce," and that in filing the opposition to the motion to enforce the MOA, Urlik "overstep[ped] her boundaries." The "Notice of Limited Scope Representation" by which Urlik entered the case, however, described the issues for which Urlik would serve as attorney of record as "Opposition to Motion to Enforce Judgment set for 9/16/16 (preparation of response, research and appearance at hearing, if necessary)" and stated that Urlik would represent appellant at the September 16 hearing. Appellant signed this document, and she signed the "Supporting Declaration of Petitioner Linda L. Reid in Opposition to Respondent Linton G. Reid's Motion" that Urlik filed on her behalf.

At the hearing, the court went through each item in the MOA, heard respondent's counsel's position on each and asked appellant for hers. Appellant repeatedly told the court she was unable to respond without representation by counsel, but she was given more than adequate opportunity to do so. As we have said, appellant was represented by four attorneys in the negotiation of the MOA. She has not identified any portion of the judgment "materially affected by the nondisclosure" of which she complains (Steiner, supra, 117 Cal.App.4th at p. 528), or otherwise shown prejudice.

Respondent's attorney argued that many of the provisions in the MOA had been fully or partially performed, demonstrating that the MOA represented an agreement between the parties, as well as respondent's reliance on the agreement.

Appellant appeared in pro. per. at the hearing, having substituted herself for her most recent attorney the day before. As discussed in the last section of this opinion, the trial court did not abuse its discretion in denying appellant's request for a continuance.

IV.

With respect to spousal support, the judgment provides, "Based upon the circumstances of the parties as of May 8, 2016, no temporary spousal support is due either party. Both parties absolutely and forever waive the right to spousal support from the other party as of the death of Lucille Smothers. No court shall ever have jurisdiction or authority to order spousal support payable to either party past the date of the death of Lucille Smothers."

Under section 4336, subdivision (a), "[e]xcept on written agreement of the parties to the contrary or a court order terminating spousal support, the court retains jurisdiction indefinitely in a proceeding for dissolution of marriage or for legal separation of the parties where the marriage is of long duration."

Appellant contends that the judgment's provision for waiver of spousal support and termination of jurisdiction is contrary to public policy. Relying upon the principle that "where there is an ambiguity in the language of a marital property agreement it must be decided in favor of the right to spousal support" (Vomacka, supra, 36 Cal.3d at p. 469), she argues that the MOA did not clearly provide for termination of jurisdiction over spousal support and "to the extent the judgment were otherwise construed to terminate jurisdiction over spousal support on the death of 'Lucille', it is unenforceable."

The suggestion that the MOA was unclear as to spousal support is groundless. The MOA states, "SS waiver by both parties as of Lucille's death, which is absolute, irrevocable and non-modifiable. Based upon present circumstances set forth in this MOA, neither party to pay spousal support to the other." It is impossible to conclude that this language means anything other than that both parties' rights to spousal support would terminate permanently upon appellant's mother's death.

Appellant's claim of unenforceability is based on Vomacka, supra, 36 Cal.3d at page 467, which discussed the rule that an order for absolute termination of spousal support at a specified time is improper absent evidence the supported spouse will be self-supporting at that time, and In re Marriage of Christie (1993) 28 Cal.App.4th 849, 865), which reversed a trial court order providing that jurisdiction over spousal support would automatically terminate on a specified future date. Vomacka held that the parties' agreement, which included a date on which the wife's right to request spousal support would terminate, permitted the court to extend support beyond the specified date when the wife sought modification prior to that date; the husband failed to prove that the language of the agreement constituted a waiver of any support beyond the stated termination date or that the wife would be self-supporting as of that date. (Vomacka, at pp. 467-470, 474.) Here, as we have said, the MOA unambiguously specified a termination date for jurisdiction over support and, as we will further discuss, there was evidence appellant will be self-supporting at that time. In Christie, on the husband's motion to modify support, the trial court not only ordered gradual reduction of support payments until a set termination date—which was upheld because there was evidence the wife would then be self-supporting—but also ordered that the court would have no jurisdiction to extend support beyond the termination date. (Christie, at p. 856.) In reversing this latter order, Christie applied Vomacka and Family Code section 4336, subdivision (a): Because the original court order and the parties' agreement did not provide for termination of jurisdiction over support, the court retained jurisdiction indefinitely. (Christie, at p. 865.) Here, again, the MOA was unequivocal regarding termination of support.

Although appellant claims she did not agree to waive spousal support or to termination of the court's jurisdiction, and that any waiver was tainted by lack of financial information due to respondent's failure to serve a final declaration of disclosure prior to the MOA (points we have already discussed), she does not argue that the evidence was insufficient to show she has sufficient means of support. As earlier described, the MOA and judgment provide for appellant to receive ownership of the Hillsboro house; $600,000 respondent (less the $28,600 sanctions); the Sun River property; her interest in S&S Investments, LLC; half of the parties' 50 percent ownership interest in R&S; 60 percent of the parties' combined 50 percent interest in the income from R&S; and a Mercedes Benz. Appellant's average monthly investment income from S&S Investments and R&S Investments totaled $9,625. Her inheritance from the trust, pursuant to the MOA, could not be reduced. Additionally, it appears appellant was the beneficiary of a life insurance policy which was expected to distribute approximately $1 million to her upon her mother's death. Finally, the MOA and judgment do not preclude appellant from seeking spousal support if circumstances change before her mother's death.

The MOA did not refer to a life insurance policy. The attachment to judgment proposed by Doty after the January 28, 2016 hearing, referred to this insurance policy as one of the circumstances bearing upon spousal support. Respondent refers to the policy in his brief, and appellant has not contested its existence.

The parties' agreement on spousal support was not invalid.

V.

Lastly, appellant contends the trial court abused its discretion in denying her the continuance she sought to have counsel appear at the hearing. Appellant has been represented by multiple attorneys over the course of these proceedings. Montgomery, who represented her during the mediation that led to the MOA (along with three other attorneys), continued to represent her through the January 28, 2016 hearing on respondent' s initial request to enforce the MOA (which had been filed on October 9, 2015) and subsequent exchanges regarding Doty's proposed attachment to judgment. At the January hearing, Montgomery confirmed that appellant had withdrawn her opposition to the motion to enforce and agreed with the October 2015 draft MSA "for the most part," and in February 2016, he represented to the superior court that he was "confident" the parties would sign a draft judgment that was circulating for revision and signature. But the day before the hearing on the parties' objections to and proposals for the judgment (scheduled March 25, 2016), appellant replaced Montgomery with new counsel, Watters, and the hearing was continued to May 23. Then, at 7:30 a.m. on the morning of the scheduled hearing, Watters requested an additional continuance. The hearing was reset for June 7. On June 3, Watters requested another continuance, together with a request that Doty recuse himself, and on June 20, he filed appellant's motion to disqualify Doty.

After Doty withdrew from the case on June 22, respondent pursued his motion to enforce the MOA in superior court, and, on August 25, appellant replaced Watters with herself, acting in pro. per. She then filed a notice of limited scope representation on September 6, in order to have Urlik prepare opposition to the motion to enforce and represent appellant at the hearing then set for September 16. The hearing was reset for November 4. Once again, on the day before the hearing, November 3, appellant changed counsel, this time replacing Urlik with herself in pro. per. At the hearing, she asked the court for a 60-day continuance.

As appellant concedes, the question before us is whether the court abused its discretion in denying the continuance. (Thurman v. Bayshore Transit Management, Inc. (2012) 203 Cal.App.4th 1112; Agnew v. Parks (1963) 219 Cal.App.2d 696, 700.) Given the history just described, it is impossible to find it did. By the time of the November 4 hearing, more than a year had passed since respondent first filed his request to enforce the MOA. Appellant repeatedly delayed the proceedings by changing counsel immediately before scheduled hearings. As the trial court told appellant, her right to representation had to be balanced against respondent's right to "have proceedings go ahead on schedule" and, after so many previous continuances, respondent "has a right to be able to have his matter heard." Indeed, in connection with respondent's request for sanctions, the court found "there was a pattern of having an attorney, and then immediately before a hearing that attorney was let go, another one hired" that constituted "intentional interference with the normal litigation of this case." Appellant has not challenged this aspect of the court's decision.

DISPOSITION

The judgment is affirmed. Costs to respondent.

/s/_________

Kline, P.J. We concur: /s/_________
Richman, J. /s/_________
Miller, J.


Summaries of

Reid v. Reid (In re Marriage of Reid)

COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION TWO
Oct 22, 2018
No. A150394 (Cal. Ct. App. Oct. 22, 2018)
Case details for

Reid v. Reid (In re Marriage of Reid)

Case Details

Full title:In re the Marriage of LINDA and LINTO REID. LINDA REID, Appellant, v…

Court:COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION TWO

Date published: Oct 22, 2018

Citations

No. A150394 (Cal. Ct. App. Oct. 22, 2018)