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Case of the Month Archive

March 2021

The ties that bind are missing here. . .

 

In partial reversal, First District holds that trial court erred by awarding fees as sanctions under Fam.C. §271 to pro per litigant; sanctions were not tethered to any attorney's fees.

 

In re Marriage of Erndt and Terhorst

(January 11, 2021)

California Court of Appeal 1 Civil A157876 (Div 3) 59 Cal.App.5th 898, 273 Cal.Rptr.3d 765, 2021 FA 1968, per Petrou, J (Siggins, PJ and Fujisaki, J,). Solano County: Carringer, J, affirmed in part and reversed in part. For appellant: Matthew Smith. For respondent: Jeffrey Beeson, (707) 337-3048. CFLP §A.18.3.1.

 

Nancy Erndt and Michael Terhorst were married in 1986. Nancy filed for divorce in 2010. In January 2018, the couple participated in a 3-day settlement conference, reached a stipulated settlement, and recited the settlement in open court. Among other things, the settlement provided that the community property part of Nancy's FERS [Federal Employees Retirement System] retirement benefit would be divided between the parties, except for the additional service years that Nancy bought, which would be awarded to her, with Michael waiving his right to a community property share of them. The settlement made no mention of the survivor benefit that was part of Nancy's FERS retirement package. The parties orally stipulated that they understood the settlement agreement, entered into it freely and voluntarily, and had had time to confer with counsel before agreeing to it. They also stipulated that the trial court would retain jurisdiction to resolve any future disputes.

 

The trial court directed Michael's counsel to prepare a stipulated judgment, but the parties spent several months haggling over its content. When Michael ultimately sent Nancy a proposed stipulated judgment that included division of the FERS survivor benefit as an omitted asset, per Fam.C. §2556, Nancy refused to sign it. Each party then filed a request for the trial court to resolve the issue. Michael reiterated his contention that the survivor benefit was an omitted asset; Nancy asked the trial court to enter judgment per the parties' oral stipulation but said nothing about the survivor benefit.

 

At a hearing on March 14, 2019, the trial court heard testimony from Michael, who appeared in pro per, and Nancy, who was represented by counsel, concerning the discussions at the settlement conference. Michael testified that he knew nothing about the survivor benefit until his attorney included it in the proposed stipulated judgment that Nancy refused to sign. Nancy said she kept quiet about the survivor benefit because she wanted it for herself and she believed that Michael's right to the benefit would cease on entry of judgment, as long as it had not been mentioned during negotiations. She failed to tell her attorney that she wanted the benefit to be hers alone; and in a private conference she declined the trial judge's offer to raise the issue. When the hearing concluded, the trial court ruled that Michael was entitled to his community property share of the survivor benefit and directed the parties to meet and confer and to submit a stipulated judgment that incorporated that ruling.

 

On April 3, 2019, the trial court heard Nancy's contention that as an alternative, it should set aside the judgment. The trial court denied her motion and ordered her to sign and resubmit the court-ordered stipulated judgment within a few days. Nancy then made handwritten changes to the judgment and signed it as modified. Michael shot back a motion for a court elisor to sign the judgment and also sought $6,102 for attorney's fees and $80 for court costs as Fam.C. §271 sanctions for Nancy's repeated refusal to comply with the court's orders. After a hearing on May 15, 2019, at which each party appeared in pro per, the lower court found no basis for changing its prior orders and Nancy signed the court-ordered stipulated judgment in open court. The court also awarded Michael $180 for costs and $800 for reasonable attorney's fees as sanctions relating to the current hearing. These orders were incorporated into the disso judgment issued by the trial court.

 

Nancy appealed, and in a partially-published opinion, the First District affirmed in part and reversed in part.

 

No there there. . .
Nancy contended that the trial court erred by awarding fees as sanctions to a pro per litigant like Michael. The justices first noted that the issue of whether it is appropriate to give a fee award to a pro per litigant under Fam.C. §271 is one of first impression. And while they found no case directly on point, the justices agreed with courts such as that in Menezes v. McDaniel (2019) 44 Cal.App.5th 340, that concluded that Fam.C. §271 fees as sanctions must be "'tethered' to attorney fees and costs." Moreover, a line of cases beginning with Trope v. Katz (1995) 11 Cal.4th 274, 45 Cal.Rptr.2nd 241, 1995 CFLR 6969, 1995 FA 721, have held that a pro per litigant is not entitled to an award of attorney's fees, since he or she incurs none being self-represented. Here, Michael had not incurred any attorney's fees in representing himself at the May 15 hearing; thus, there were not fees to which the sanctions award could be tethered. Accordingly, the panel held that the trial court erred by awarding him $800 in §271 fees as sanctions and they reversed that part of the order, leaving the costs award intact. And, the justices directed the trial court to enter a new order on remand that awarded $180 in costs as sanctions to Michael.

 

Non-pub. . .
In the unpublished parts of the opinion, the panel affirmed the trial court's rulings regarding Michael's entitlement to a community share of the survivor benefit as an omitted asset and its refusal to set aside the stipulated judgment, but the panel denied Michael's motion for sanctions on appeal for filing a frivolous appeal.

 

 

COMMENT:

  

Readers may find it somewhat unusual for Nancy to have had an ex parte discussion with the trial court during the settlement conference; we did. However, in a footnote, the panel tells us that neither party made any objection to her testimony regarding the discussion, so that's that about that. We are also told that Nancy failed to tell her attorney about her intentions regarding the survivor benefit. We just wonder why counsel would not have checked into whether there was a survivor benefit and discussed it with her, correcting her belief that she could keep quiet about the benefit and then keep it for herself. On these facts, it looks like the benefit was not just an omitted asset; it was an asset concealed in a breach of fiduciary duty. The parties here don't open that Pandora's box; they are content to leave it as an omitted asset.

 

Library References
Hogoboom & King, Cal. Practice Guide: Family Law (The Rutter Group) ¶ 14:245

 

 

 
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