Attorney’s fees are an issue in every family law case that involves attorneys. The generally accepted rule in California is that if one of the spouses has enough money to pay for his or her own attorney’s fees and costs, and can thereafter make a contribution toward the attorney’s fees and costs of the other spouse, the court should order that contribution. Making that ruling can be challenging, and the issue of attorney’s fees is often hotly litigated. An unpublished opinion out of Orange County sheds light on the question of “Who Pays Attorney Fees?”.
Kathrin and Noel filed for divorce. Kathrin filed a request with the court for an award of child support, spousal support, and attorney’s fees and costs from Noel. In support she alleged that Noel had $17 million dollars in the bank and that she needed $40,000 per month in support to meet the customary household expenses. Noel disputed the allegations, and made the counter argument that because Kathrin had $60,000 in the bank she could pay her own attorney’s fees and costs. Seven days of trial ensued. At the end of the seventh day, and before Noel had the opportunity to present his side of the case, the court ordered husband to pay wife $70,000 in attorney’s fees to “level the playing field” and “equalize the access” “to the legal process.” Husband’s counsel asked the court whether the order was “without prejudice to deal with the issue of allocation of fees at the time of trial.” The court replied, “This order is always of that nature because I don’t have the full information. I can’t make [a Family Code section] 4320 analysis at this time . . . as I am required to do on any final order of attorney’s fees.” The court also awarded wife $20,000 in accountant’s fees. The court stated, “Since I’m spending money [husband] says he doesn’t have, why not[?]” The court stated the reason for the award was that more forensic work is required of the petitioning party than the responding party since the petitioner bears the burden of proof, and that husband’s accountant had been paid $21,000 so far compared to $5,000 paid to wife’s accountant. The court issued written findings that (1) it found the finances and businesses were convoluted and therefore ordered an Evidence Code section 730 investigation into the available cash flow, or equivalent, for purposes of calculating spousal and child support, and (2) the “court makes no findings nor orders regarding the payment of the retainer for the Evidence Code [section] 730 investigation.” It made no findings regarding husband’s ability to pay the ordered $90,000 in fees and costs.
Husband filed an appeal and argues that the court failed to comply with the mandates of Family Code sections 270, 2030, and 2032, when it ordered him to pay $90,000 of wife’s pendente lite attorney fees and accountant costs. He prevails on appeal.
Here, the court failed to determine husband had the ability to pay wife’s attorney fees and costs. Instead, the court based its award on the fact that husband had previously made payments to his own attorney and accountant. In doing so, the court abused its discretion.
The record in this case suggests wife faced many obstacles in gathering the evidence necessary to establish husband’s ability to pay. Wife alleged the community owned 24 different businesses, and she successfully moved the court for an order compelling husband to make the access codes, user names, and passwords available to her of “each and every [c]ommunity [p]roperty business.” This order was made on April 20, 2011, during the course of the extended hearing on wife’s OSC. This order should not have been necessary. Parties who obfuscate or withhold evidence of their ability are not immunized from attorney fee and cost orders. Under section 271, a court may order an attorney fee award as a sanction against an uncooperative party, provided, again, that the uncooperative party has the ability to pay. For example, in In re Marriage of Quay (1993) 18 Cal.App.4th 961, 969-970, the record was replete with documentation of the husband’s delays, obstructions and refusal to provide an accounting of the proceeds from a sale of stock, forcing the wife’s attorneys to bring motions to comply. The appellate court affirmed the trial court’s award of attorney fees under the predecessor statute to section 271.
Thus, if wife’s allegations regarding husband’s ability to pay are ultimately proved to be true, both a needs-based order and a sanctions order are potentially available. But the prospect of an ultimate remedy does not excuse the court’s noncompliance with the mandate of section 270. “[T]he court shall first determine that the party [ordered to pay] has or is reasonably likely to have the ability to pay.”
Please be sure to visit www.hardinglaw.com, the website for the law firm of Harding & Associates, for more information on California family law.
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