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Case of the Month Archive

March 2020

OK to file sanctions motion before lawsuit ends. . .


In reversal, Fourth District holds that trial court did not err by awarding Fam C §271 fees as sanctions that included anticipated fees and costs but finds that some expenses claimed by husband in support of sanctions request are not "tethered to attorney fees and costs" and remands.


Menezes v. McDaniel

(December 18, 2019; ordered published January 15, 2020)

California Court of Appeal 4 Civil D074434 (Div 1) 44 Cal.App.5th 340, 257 Cal.Rptr.3d 356, 2020 FA 1920, per Huffman, Acting PJ (Haller and Aaron, JJ, concurring). San Diego County: Kalemkarian, J, reversed and remanded. For appellant: Dennis Temko, (858) 274-3538. For respondent: Andrew Botros, CFLS, (858) 793-8884. CFLP §§A.18.3.1, A., A.18.3.3.


Natache Menezes and Tim McDaniel were married on October 9, 2004 and separated in early 2013. Natache filed for divorce in June 2013. One of the disputed property issues in their disso concerned a home in Brazil, which Tim claimed as his separate property. Tim had had trouble buying the house because he was a foreigner, so Natache completed the purchase and took title to the property in her name. However, the disso court found that the house had been bought with Tim's separate property funds and awarded it to him as his separate property. In May 2015, the court ordered Natache to transfer title to Tim's name. The lower court entered the parties' disso judgment in September 2015.


In August 2016, Tim filed a request to enforce the disso judgment on the basis that Natache failed to transfer title to the house to him. After a hearing in December, the trial court ordered Natache to sign any documents and take any necessary action to transfer the title by January 12, 2017. When Natache failed to do so, Tim filed an OSC re contempt, and the trial court found Natache to be in contempt on August 4, 2017.


On August 29, the trial court held a review hearing. It ordered Natache to pay $10,000 in contempt sanctions, partly from her community property share of a joint bank account and partly from her community interest in some stock shares. The court ordered her not to encumber or dispose of the Brazil house and to execute a power of attorney, as instructed by Tim's Brazilian attorney, within 30 days. Although Tim's attorney sent instructions to Natache on September 26, she had not executed the power of attorney by the time of an ex parte hearing on October 5th. At that hearing, the trial court ordered Natache to deliver a perfected power of attorney to Tim's attorney by October 16, so that the title transfer could take place. After sending a scanned copy of the power of attorney to Tim's attorney on October 27, Natache finally delivered the original of that document on November 10, when she handed it to "someone from [husband's] attorney's office in front of the courthouse on a court holiday."


In early December 2017, Tim's Brazilian attorney tried to effect the transfer of the Brazil house, only to find that Natache's mother, who had Natache's power of attorney in Brazil, had signed an agreement giving the house to Natache's Brazilian attorney in payment of fees in a court-approved transaction. Tim's Brazilian attorney promptly filed a motion to stay execution of the judicial lien on the house, and the trial court in Brazil granted the motion.


In January 22018, Tim filed a motion for fees and sanctions relating to the litigation over the Brazil house. He sought $500,000 and return of $130,000 from his retirement account as sanctions under a variety of Fam Code and CCP sections, including Fam C §271 [fees as sanctions for conduct that frustrates settlement]. Tim listed local attorney's fees of $80,000 to $90,000, $17,000 fees for his Brazilian attorney (Including $7,000 for filing for a stay), 110% of the value of the Brazil house to be paid to the Brazilian attorney, transfer fees of $10,000, property taxes of $9,000, translation fees of $5,300, $18,000 for international flights to attend hearing, and $9,000 for lost vacation time. Tim's attorney also told the trial court that Tim would owe his Brazilian attorney $24,127, or 20% of the value of the Brazil house.


At a hearing in March 2018, Natache testified that she had not complied with the order to transfer the title because she was mired in litigation to evict residents from the house who had overstayed her permission to stay there. She denied agreeing to give the house to her attorney, and claimed that she did not know that her mother had signed it over until November 30, 2017. In his testimony, Tim reiterated the fees and costs he had claimed and stated that he believed he would incur additional fees of between $6,000 and $8,000. In an order issued on April 30, 2018, the trial court awarded $200,000 in cash sanctions to Tim, per Fam C §271, based on Natache's having acted to thwart enforcement of the trial court's orders and to unnecessarily prolong the litigation over an already-decided issue. The lower court found that Natache had the ability to pay the sanctions, either by offsetting spousal support payments, using her community share of a stock account, or accessing some other resources. The court concluded that Natache had apparently hidden information and that her testimony regarding her mother's actions was not credible.


Natache appealed, and the Fourth District reversed and remanded.


Disentitled to a favorable ruling. . .
The justices first considered Tim's contention that the sanctions judgment should be affirmed on the basis of the disentitlement doctrine, which permits dismissal of an appeal filed by a litigant who stands in contempt of a court's processes or orders. He argued that Natache's having surreptitiously recorded their telephone conversations without Tim's permission meant that she should not be entitled to challenge the lower court's order. While not condoning Natache's actions, the panel found that they could not go along with Tim's request because he hadn't raised the issue in the trial court. They noted that the lower court had been aware of Natache's violation of court rules, but had chosen to remedy it by accepting Tim's proposed settled statement over hers.


Now and then. . .
The justices then turned to Natache's contention that the lower court erred by awarding Fam C §271 sanctions for anticipated fees and costs and including in its order expenses that were not tethered to attorney fees and costs. The justices noted that there is nothing in the wording of Fam C §271 that would preclude the trial court from awarding anticipated fees, as long as the evidence shows that they will be incurred. The panel reasoned that limiting sanctions to fees already incurred would limit the trial court's ability to base sanctions on a party's conduct and "may ignore liability the offending party's conduct creates." Here, the justices found, Tim was not required to wait until the lawsuit ended to seek Fam C §271 sanctions; if nothing else, making such an award during the course of the litigation may act as a deterrent to future obstructive behavior and encourage cooperation by the spouse whose pocketbook takes a hit.


Bound and determined. . .
The panel next focused on Natache's contention that not all of the sanctions were awarded for expenses tethered to Tim's attorney's fees and costs. They found that the lower court had failed to detail the basis for its $200,000 award; thus, they were unable to determine which of Tim's expenses it included. Still, when they reviewed those expenses, they singled out his travel expenses as charges not tethered to attorney fees and costs, and similarly questioned his claim for vacation time. In addition, the justices were not persuaded that the lower court had accepted all of Natache's expenses, as listed in her briefing. Finding insufficient evidence that the sanctions awarded were sufficiently tethered to Tim's fees and costs, the panel reversed the order to the extent that it imposes untethered sanctions, and remands for the trial court to issue a new order that includes information regarding the basis for the sanctions to allow for meaningful review.





Previous cases dealing with Fam C §271 sanctions have focused on the conduct of the offending party and whether it warrants such an award. This is the first case that we have seen to set out a bright-line rule that the award be "tethered to charged or anticipated attorney fees and costs." The statute itself contains no such wording; perhaps it has simply been assumed in prior cases. As we see here, that will be a limiting factor in the amount of the award. The statute limits the amount according to whether it imposes an unreasonable burden on the sanctioned party and provides that the court will consider the parties income and assets. It doesn't require a deep dive into underlying expenses. Tim apparently cannot seek §271 sanctions to reimburse him for his travel costs or lost vacation time. Family law attorneys seeking §271 fees as sanctions in the future will need to make sure that their requests do not include expenses that can't be tethered to fees and costs. Time will tell how far future courts will let attorneys expand the concept; for now, travel fees and lost vacation time are out as bases for a §271 award.



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