Fees sought were largely attributable to another case . . .
In reversal, Second District holds that trial court erred by awarding Fam C §271 fees as sanctions to non-party attorneys; Fam C §271 is fee-shifting statute that allows fee awards only between the parties to the litigation
Webb v. Webb
June 13, 2017)
California Court of Appeal 2 Civil B269311 12 Cal.App.5 th 876, 219 Cal.Rptr.3d 785, 2017 FA 1794, per Rubin, J (Bigelow, PJ and Grimes, J, concurring). Los Angeles County: Gross, J, and Montes, J, reversed. For appellant husband: John Derrick, CALS, (805) 284-1660. For appellant wife: pro per. For respondents: Patrick DeCarolis, CFLS, (310) 405-7373, and Sandra Polin, CFLS, (310) 207-6400. CFLP §A.18.3.5.
William and Deborah Webb were married in 1997. In early March 2009, William filed for divorce, but the couple reconciled and agreed to dismiss the disso in April 2010. The reconciliation did not last, and William filed another disso petition on February 29, 2012. Deborah, still represented by her attorney from the first disso action, Sandra Polin, retained additional counsel, Patrick DeCarolis, in March 2012 to represent her in the second disso.
Sometime in May 2012, Deborah filed a notice of intent to record a family law attorney real property lien (FLARPL) on the family home to the tune of $150,000 in favor of DeCarolis. In mid-June, William filed an ex parte application, asking the trial court to stay the recording of the FLARPL pending an evidentiary hearing, or alternatively, to limit it to $50,000. He claimed that DeCarolis's fees were excessive, given the "extensive discovery" already done in the dismissed disso, the fact that he and Deborah had no children, and the lack of complicated community property assets. William contended that Deborah needed protection from her attorneys' excessive fees. The trial court denied that application. On July 24, 2012, Deborah recorded a $150,000 FLARPL in favor of DeCarolis, plus a $250,000 FLARPL in favor of Polin based on a deed of trust Deborah signed in the 2009 litigation. On September 6, 2012, Deborah substituted DeCarolis out of the case. Polin also ceased representing her around that time.
In December 2012, William filed another ex parte application, seeking to expunge the FLARPLs on the basis that he had not received proper notice of the one for DeCarolis, and that the liens exceeded Deborah's community interest in the proceeds from the sale of the house to which they applied. He stated that the house was being sold and asked the trial court to order the sale proceeds retained in escrow. Both DeCarolis and Polin opposed the expungement, arguing that William had been given proper notice of DeCarolis's FLARPL, but conceding that he hadn't been served with proper notice of Polin's. Citing Cal Rules of Ct, rule 3.1202(c), which requires a declaration containing competent testimony describing irreparable harm, immediate danger, or a statutory basis for granting ex parte relief, the trial court denied William's application. When Deborah filed a similar application two weeks later, the trial court denied it as well.
Undeterred, William filed another request to expunge the FLARPLs in February 2013. In ruling on that request, the trial court ordered the proceeds from the house sale relating to Polin's FLARPL held in escrow until further court order. In June, William followed up with another ex parte application, claiming that the escrow company could not comply with the trial court's order regarding Polin's FLARPL unless it was expunged. He also contended that "several events" had reduced Deborah's community interest in the property. The trial court, however, found no material change of circumstances and denied William's request.
The trial court entered the parties' disso judgment on October 3, 2014, finding that the family home was community property and must be " 'promptly listed for sale.' " The court retained jurisdiction to resolve any disputes in connection with the listing, sale, or escrow of the house. The judgment also ordered that the FLARPLs be paid from Deborah's share of the sale proceeds alone. William then tried another venue, petitioning the probate court for a conservatorship over Deborah, based on her alleged " 'cognitive disorder,' " drug taking, and money squandering. He asked that the probate court place Deborah's share of the proceeds from the sale of the family home in a blocked account and order monthly distributions for her living expenses. The probate court then ordered the sale proceeds held in escrow. William then returned to the family law court, seeking to have the court clerk sign the sale documents that Deborah had refused to sign. The trial court sensed a conflict with the probate court and took the matter off calendar, after which William dismissed the probate court matter.
William's next application, filed in July 2015, asked the trial court to confirm the 2013 order that the funds for Polin's FLARPL remain in escrow. Apparently, Polin was asserting that the disso judgment superseded that order and that her lien should be paid when the family home was sold. William also sought an order requiring Polin to release her FLARPL so that escrow could close. At the hearing on the application, DeCarolis and Polin both told the trial court that Polin's lien arose largely out of another case and not from the disso case. However, Polin argued that the trial court already established the validity of the FLARPL and that the finality of the disso judgment barred William from challenging it now. The trial court found that the disso judgment superseded the 2013 order, and denied this application.
A few days later, Polin and DeCarolis asked the trial court to impose sanctions on William, per Fam C §271 [fees as sanctions for impeding settlement], CCP §128(a), and Cal Rules of Ct, rule 5.14, based on his repeated and unsuccessful challenges to the FLARPLs, his alleged bad faith in seeking a conservatorship, and his alleged misleading of the probate court. The attorneys originally sought sanctions of $65,000, but bumped up their request to $86,000 to include " 'additional fees.' " At the hearing, the trial court denied William's request for an evidentiary hearing and a continuance, and found that his many challenges to the FLARPLs frustrated settlement in violation of Fam C §271. Accordingly, the court ordered sanctions of $88,790 to the two attorneys.
William and Deborah both appealed, and the Second District reversed.
No attorneys allowed . . .
On appeal, William contended that the lower court lacked authority to award sanctions to the attorneys because they were not parties to the litigation. The justices agreed. They reasoned that Fam C §271 is a "fee-shifting device" to impose liability on the obstructing party for the other party's fees and costs incurred because of that conduct. And, when they focused on the "plain language" of the statute, they saw that it refers to a party's request for fees as sanctions. The panel also noted that in In re Marriage of Daniels (1993) 19 Cal.App.4 th 1102, 23 Cal.Rptr.2d 865, 1994 CFLR 6171, 1993 FA 621, the court reasoned that the Legislature intended former CC §4370.6, the predecessor of Fam C §271, as a device for fee shifting between the parties to the litigation; thus the trial court could not award §271 sanctions directly against a party's attorney. Applying that reasoning, the justices here concluded that the trial court could not award §271 fees as sanctions to a party's attorney where that attorney makes the sanctions request for his or her sole benefit.
No there there . . .
The justices pointed out that the stated purpose of §271 is promoting settlement of litigation. Here, they noted, William's challenges to the FLARPLs were made after attorneys Polin and DeCarolis ceased to represent Deborah, and were intended to hinder their attempts to collect their fees, which were largely attributable to another case. Thus, the challenges could not be found to have hindered the settlement of the disso litigation. Summing up, the panel concluded that the lower court lacked authority to make the sanctions order and reversed that order.
The justices here follow the reasoning in Daniels , but add a little to it. In that case, the disso court awarded sanctions against the wife for the " 'obstreperous' conduct" of her attorney and a First District majority affirmed on appeal. The justices explained that then-current CC §4370.6 authorized the trial court to impose sanctions only on a party, not on a party's attorney. The conduct of her attorney, however, clearly warranted sanctions, so the majority concluded that the lower court had not erred by imposing them on the wife. The dissent would not have imposed sanctions on the wife in the absence of evidence that she had authorized, condoned, or even been aware of her attorney's conduct.
The justices here refine and expand on the Daniels case by emphasizing that Polin and DeCarolis are non-parties and are making their sanctions request for their sole benefit. They hold that §271 sanctions may not be awarded to a party's attorney when the attorney requests the sanctions solely for his or her own benefit. Indeed, the justices say that only a party may move for §271 sanctions.
Readers may wonder what happened to the attorneys' claims under CCP §128 and Cal Rules of Court, rule 5.14. In a footnote, the panel tells us that CCP §128 generally describes the powers of courts, but does not provide for sanctions. The justices speculate that the attorneys might have intended to rely on CCP §128.7, which authorizes sanctions for bad faith litigation tactics, but since they made no argument on that point, the justices decline to address it. Rule 5.14, they explain, provides for sanctions where there has been a " 'failure without good cause to comply with the applicable rules.' " Here, however, the attorneys failed to identify the court rules with which William had not complied; thus, that challenge fails as well.