Marriage of Kelly

Filed 3/15/07 Marriage of Kelly CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Lance Jensen, Judge; J. Edgar Thomas Rutter II, Judge (retired judge of the Orange Super. Ct. assigned by the Chief Justice pursuant to art. VI, 6 of the Cal. Const.); and Walter D. Posey, Temporary Judge (pursuant to Cal. Const., art. VI,  21). Affirmed.

Law Office of Michel & Rhyne, Karen A. Rhyne and Laura Callahan for Appellant Sharon Kelly.

David Boros for Appellant James Kelly.

* * *

Petitioner Sharon Kelly challenges a judgment entered after a partial retrial of her divorce case. The retrial occurred after the Court of Appeal, Fourth District, Division One, reversed the portion of the initial judgment awarding Epstein credits^[1]to respondent James Kelly, and remanded for modification of the judgment not inconsistent with [its] opinion. (In re Marriage of Kelly (May 22, 2001, D037277) [nonpub. opn.], pp. 17-18 (Kelly I).) Sharon^[2]contends the trial court erred in conducting a retrial on the amount of Epstein credits because the appellate opinion required the trial court to simply strike the Epstein credit award from the initial judgment. Sharon alternatively contends the trial court erred in limiting the retrial to the amount of the Epstein credits and precluding her from challenging Jamess entitlement to these credits. Sharon also contends the trial court abused its discretion in awarding her only $7,000 in attorney fees because her attorneys declaration documented she expended $120,000 in total fees. In a cross-appeal, James also challenges the sufficiency of the evidence to support the fee award.

We conclude the trial court did not err in granting a retrial on the amount of the Epstein credits. The appellate opinion did not direct the trial court to modify the previous judgment by striking the Epstein credits. Nor did the opinion specify the procedural manner in which that portion of the judgment was to be modified. The law of the case doctrine did not bar retrial because Sharon stipulated to the admission of an expert report on the amount of Epstein credits due James, thus justifying a retrial based on new and additional evidence.

We also reject Sharons contention the trial court erred in limiting the new trial to the amount of the Epstein credits. The appellate opinion reversed the Epstein credit award solely because substantial evidence did not support the calculation of the award, and expressly affirmed all other aspects of the first judgment, including the trial courts determination James was entitled to Epstein credits. Finally, we conclude the trial court did not abuse its discretion in the attorney fee award to Sharon. Accordingly, we affirm the judgment.

I

Factual and Procedural Background

Sharon filed a petition for dissolution of her marriage to James. Among the issues at trial was Jamess request for Epstein credits in the amount of $45,872. To support his claim for credits, James testified as follows: [Q:] Mr. Kelly, [Id] like to draw your attention to my trial brief, page 10. Was there a debt owed to First Union Bank at the date of separation? [] A[:] Yes. [] Q[:] Is the amount listed [in the] trial brief true and correct? [] A[:] Yes. [] [Q:]In fact, all items listed in my trial brief under debts commencing page 10, items 10 through 22, line 17, page 11, are those debts that were outstanding as of [the] date of separation. [] [Sharons counsel]: Objection, no foundation. [] The Court: Overruled. [] The Witness: Yes. The trial court granted Jamess request for Epstein credits in the amount requested and entered judgment accordingly.

Sharon appealed the judgment, challenging both Jamess entitlement to Epstein credits and the evidence presented to prove the amount of those credits.^[3] The California Supreme Court transferred the appeal to the Court of Appeal, Fourth District, Division One, which filed its opinion on May 22, 2001. The opinion did not specifically address Sharons arguments regarding Jamess entitlement to Epstein credits, but focused on the evidence James presented to demonstrate the calculation of those credits. The appellate court noted the award was based solely on Jamess testimony confirming the amounts listed in his trial brief. The court concluded this constituted inadmissible hearsay, explaining: Jamess testimony that the listing of debts in his trial brief was correct did not constitute competent evidence to support an award of Epstein credits. Because there was no other evidence admitted on this issue, there is no substantial evidence to support the courts award of Epstein credits, and the judgment in this respect must be reversed. (Kelly I, supra, at p. 9.) At the conclusion of the opinion, the court provided the following disposition: The judgment is reversed as to the award of Epstein credits to James and this matter is remanded to the trial court for modification of the judgment not inconsistent with this opinion. In all other respects, the judgment is affirmed. (Id. at pp. 17-18.)

The Court of Appeal issued the remittitur on July 31, 2001. The trial court set the matter for hearing on September 6, 2001, but continued the hearing several times. On June 6, 2003, Sharon and James filed a stipulation to appoint an independent accountant as the Courts expert to perform an evaluation of claims for Epstein credits made by [James], and submit a written report to the Court . . . . The stipulation provided that the experts report would be admitted directly into evidence subject to cross-examination.

In anticipation for a hearing regarding the scope of the retrial, Sharon filed a brief in January 2004, arguing the appellate courts unqualified reversal of the Epstein credit award required the trial court to retry the entire issue of Epstein credits, including both Jamess entitlement to the credits and the amount. In her reply to Jamess opposition, however, Sharon added the argument that James was not entitled to a retrial at all because the appellate court had reversed the Epstein credit award based on insufficient evidence. Sharon argued the appellate courts disposition required the trial court to modify the judgment by striking the Epstein credit award. The trial court rejected Sharons arguments and limited the retrial to the amount of the Epstein credits.

The accounting experts report was introduced at the retrial. The trial court adopted its findings with minor adjustments, and entered judgment awarding James Epstein credits totaling $44,208. The trial court awarded Sharon $3,000 for fees incurred on appeal, and $4,000 for trial-related fees.

II

Discussion

A. The Court of Appeal Opinion Did Not Preclude a Retrial

Sharon contends the Court of Appeal opinion required the trial court to modify the judgment to strike Jamess Epstein credit award, thus precluding retrial. We disagree.

As a general rule, an unqualified reversal remands the cause for a new trial [citation], and places the parties in the trial court in the same position as if the cause had never been tried, with the exception that the opinion of the court on appeal must be followed so far as applicable. (Hall v. Superior Court (1955) 45 Cal.2d 377, 381; Gapusan v. Jay (1998) 66 Cal.App.4th 734, 743.) Thus, all issues involved in the case are relitigated at a new trial. Accordingly, the parties are free to present any evidence, including new or additional evidence, relevant to the allegations in the complaint. (Guzman v. Superior Court (1993) 19 Cal.App.4th 705, 708.) The same rule applies where a reversal is granted and the case remand[ed] for further proceedings according to the views stated in the appellate opinion . . . . (People v. Barragan (2004) 32 Cal.4th 236, 248 (Barragan).)

As with all general rules, there are exceptions. One limitation is that a case is to be set at large for retrial only when that is the intent of the appellate court. Judgment reversed at the end of an opinion is, of course, strong indication of such intent. But when the opinion as a whole establishes a contrary intention, the rule is inoperative. (Stromer v. Browning (1968) 268 Cal.App.2d 513, 518-519 (Stromer).) In Stromer, the appellate court held that a retrial was not warranted even though the Supreme Court reversed the judgment without directions because the facts of the case were not in dispute, there was no indication that new evidence could be introduced on retrial, and it was clear the Supreme Court intended to enter judgment in the defendants favor after the appeal. (Id. at p. 518; see also Moore v. City of Orange (1985) 174 Cal.App.3d 31, 34-37.) The Stromer exception has been applied infrequently, however, and does not apply where the prior opinion does not unmistakably express an intent to bar retrial. (Bank of America v. Superior Court (1990) 220 Cal.App.3d 613, 623 (Bank of America).)

Another exception is that the unqualified reversal rule is inapplicable where the trial court denied a motion for judgment notwithstanding the verdict (JNOV) and the appellate court reversed the judgment for insufficiency of the evidence. (Bank of America, supra, 220 Cal.App.3d at p. 626; McCoy v. Hearst Corp. (1991) 227 Cal.App.3d 1657, 1661 (McCoy).) The rationale in these cases is that the plaintiff has had a full and fair opportunity to present the case, and had the trial court properly granted the JNOV motion, the case would have ended. (Ibid.)

Here, the appellate court reversed the Epstein credit award to James, with instruction that the matter is remanded to the trial court for modification of the judgment not inconsistent with this opinion. Sharon contends we must read the courts disposition as limiting the trial court to striking the entire award for Epstein credits. She argues the appellate court would have expressly provided for a retrial if it had intended that result.

As noted above, however, the absence of specific directions upon reversal generally demonstrates the appellate courts intention to allow retrial of the issues. Here, the general rule applies because the appellate court concluded the evidence did not support the amount of the credits awarded, but did not direct the trial court to strike the award. In her opening brief to the trial court on this issue, Sharon agreed, as follows: The appellate courts disposition was unqualified in its reversal of the Epstein credits and the court made neither specific instructions nor limitations in its remand of this issue. The court could have espoused a number of directions or limitations to the trial court, but it [chose] not to do so. Although, as we discuss below, the appellate court limited the scope of the issues on retrial, nothing in the opinion can be read as directing the trial court to simply strike the Epstein credits from the judgment. Given the legal presumption in favor of retrial, we must assume if the appellate court intended to direct the trial court to strike the credits, it would have said so.

Indeed, the presumption in favor of retrial applies unless the appellate opinion as a whole unmistakably express[es] an intent to bar retrial. (Bank of America, supra, 220 Cal.App.3d at p. 623.) We discern no such intent here. Unlike the situation in Stromer, where the underlying facts were not in dispute and the parties had nothing new to present upon retrial, the appellate court here concluded the evidence supporting the Epstein award was based on inadmissible hearsay. Nothing in the opinion demonstrates the appellate court believed James could not have introduced admissible evidence to prove his claims had the trial court properly sustained Sharons foundational objection to the evidence. To the contrary, the opinion expressly noted that Sharon (a) did not present evidence disputing the amount James sought as credit; (b) conceded the couple had debts approximating $25,000 when they separated; and (c) conceded James continued to pay the debts postseparation. Thus, the appellate court recognized James had shown his entitlement to an undetermined amount of Epstein credits. Under these circumstances, we cannot interpret the appellate opinion as unmistakably expressing an intent to bar retrial.

Sharon also argues the reversal for insufficiency of the evidence places the present situation within the exception discussed in Bank of America and McCoy. In both cases, the defendants appealed the denial of their motions for judgment notwithstanding the verdict. As the Supreme Court recently recognized, the decision to deny retrial in those cases was based on Code of Civil Procedure section 629.^[4] (Barragan, supra, 32 Cal.4th at pp. 251-252.) The Supreme Court recognized that section 629 modifies the general rule that an unqualified reversal for insufficient evidence remands the case for a new trial. (Barragan, at p. 252.) Sharon does not invoke section 629 or contend the trial court improperly denied a JNOV motion. Thus, the Bank of America and McCoy exception is inapplicable here.

Finally, Sharon contends that retrial is barred by the law of the case doctrine. Under the law of the case doctrine, when an appellate court states in its opinion a principle or rule of law necessary to the decision, that principle or rule becomes the law of the case and must be adhered to throughout [the cases] subsequent progress, both in the lower court and upon subsequent appeal. . . . [Citation.] . . . [Citation.] As its name suggests, the doctrine applies only to an appellate courts decision on a question of law; it does not apply to questions of fact. [Citation.] . . . [] . . . Thus, during subsequent proceedings in the same case, an appellate courts binding legal determination controls the outcome only if the evidence on retrial or rehearing of an issue is substantially the same as that upon which the appellate ruling was based. [Citations.] [Citation.] Where, on remand, there is a substantial difference in the evidence to which the [announced] principle of law is applied, . . . the [doctrine] may not be invoked. [Citation.] Even where the appellate court reverses based on the sufficiency of the evidence, the rule of the law of the case may not be extended to be an estoppel when new material facts, or evidence, or explanation of previous evidence appears in the subsequent trial. [Citations.] [Citation.] (Barragan, supra, 32 Cal.4th at pp. 246-247, italics added.)

Here, James presented at retrial new evidence concerning the amount of Epstein credits. Indeed, Sharon stipulated to the admission of an experts report at the retrial long before taking the position that retrial was improper. Because the retrial was based on new, admissible evidence, the law of the case doctrine did not bar retrial.

B. The Trial Court Did Not Err in Limiting the New Trial to the Amount of Epstein Credits

Alternatively, Sharon argues the trial court erred in limiting the new trial to the amount of the Epstein award, which prohibited her from presenting evidence that James was not entitled to any credits. Sharon relies in part on the appellate opinions disposition which states that [t]he judgment is reversed as to the award of Epstein credits to James . . . . (Italics added.) Sharon argues that if the appellate court intended to limit the retrial to the amount of credits, it would have used the word amount instead of award.

We might agree with Sharon had the disposition ended there. But the disposition continued and called for the modification of the judgment not inconsistent with this opinion. In the body of the opinion, the court expressly limited its analysis to the issue of the amount of the credits, as follows: Here, Sharon asserts that there is no substantial evidence to support the courts calculation of Epstein credits to be given to James because the only evidence before the court was Jamess statement that the amounts reflected in his trial brief were an accurate reflection of the amount of community debts he paid. Sharon contends that the trial brief was inadmissible hearsay that cannot support the calculation of Epstein credits. We agree. (Italics added.) Sharon concedes the opinion addressed only her argument about the amount of the credits. Thus, the direction to modify the judgment in accordance with the body of the opinion required the trial court to recalculate the Epstein credit award based on admissible evidence at the retrial.

Sharon also complains her due process rights were violated because the appellate court never addressed her arguments regarding Jamess entitlement to the credits. We reject this contention.

The remedy for an appellate courts failure to discuss an essential issue is a petition for rehearing and, if the petition is denied, a petition for review by the Supreme Court. (See Eisenberg, et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2006) 12:16, p. 12-3 (rev. # 1, 2006); see also Torres v. Parkhouse Tire Service, Inc. (2001) 26 Cal.4th 995, 1000, fn. 2 [As a matter of policy this court will not consider any issue . . . that was omitted from . . . the opinion of the Court of Appeal, unless the omission . . . was called to the attention of the Court of Appeal in a petition for rehearing].) Sharon does not contend she sought rehearing to address her argument regarding James entitlement to Epstein credits. Accordingly, she has waived any argument that the Court of Appeals failure to address that issue amounted to a due process violation.

C. The Trial Court Did Not Abuse Its Discretion in Awarding Attorney Fees

Both Sharon and James challenge the trial courts attorney fee award. Sharon contends the trial court erred in awarding her only $3,000 in fees for the previous appeal, and $4,000 in fees related to the trial. Sharon contends she spent $120,000 in attorney fees, and that Jamess superior financial position requires him to pay her fees. James contends Sharon failed to support her attorney fee request with substantial evidence, and therefore the trial court erred in awarding her fees.

[A] motion for attorney fees and costs in a dissolution proceeding is left to the sound discretion of the trial court. [Citations.] In the absence of a clear showing of abuse, its determination will not be disturbed on appeal. [Citations.] [The] trial courts order will be overturned only if, considering all the evidence viewed most favorably in support of its order, no judge could reasonably make the order made. [Citations.] [Citation.] In re Marriage of Sullivan (1984) 37 Cal.3d 762, 768-769.)

Family Code section 2030, subdivision (a)(1), provides: In a proceeding for dissolution of marriage, nullity of marriage, or legal separation of the parties, and in any proceeding subsequent to entry of a related judgment, the court shall ensure that each party has access to legal representation to preserve each partys rights by ordering, if necessary based on the income and needs assessments, one party, except a governmental entity, to pay to the other party, or to the other partys attorney, whatever amount is reasonably necessary for attorneys fees and for the cost of maintaining or defending the proceeding during the pendency of the proceeding. In determining whether to order one party to pay attorney fees and costs to the other party, and the amount to be paid, the court must consider (A) the respective incomes and needs of the parties, and (B) any factors affecting the parties respective abilities to pay. (Fam. Code, 2030, subd. (a)(2).)

A review of the trial courts order reveals the judge properly considered the relative incomes of the parties and the assets available to them. For example, the trial court referred to evidence James earned $4,590 per month, and Sharon earned $5,417 per month. The court also noted James paid Sharon $650 per month in child support. The court recognized the family residence had equity of approximately $200,000, but that title remained in the names of both James and Sharon. The court also considered other assets James held in various accounts. In determining which fees were reasonably necessary, the court stated it had reviewed the file to determine the number of appearances and noted that much of the trial time spent by Sharons attorneys was wasted by pursuit of theories which proved to be a dead end [and] had nothing to do with the matters to be resolved.

Sharon does not contest the accuracy of the facts supporting the order, but argues the trial court failed to consider on the record each of the factors in In re Marriage of Munguia (1983) 146 Cal.App.3d 853, 863 (Munguia), which include: the nature of the litigation, its difficulty, the amount involved, the skill required and the skill employed in handling the litigation, the attention given, the success of the attorneys efforts, his learning, his age, and his experience in the particular type of work demanded [citation]; the intricacies and importance of the litigation, the labor and the necessity for skilled legal training and ability in trying the cause, and the time consumed[,] . . . [and] . . . the financial circumstances of the paying spouse . . . . (Original italics.) Munguia, however, simply outlined the factors a trial court may permissibly consider in granting an attorney fee award; the case did not purport to require a trial court to make express findings as to each of these factors. As Sharon concedes, the trial court applied the factors set out in Family Code section 2030 when it made its ruling. We decline to place requirements on the trial court in addition to those prescribed by the Legislature.

Sharon also contends the trial court abused its discretion by underestimating the amount of fees generated in connection with the case. Specifically, Sharons counsel filed a declaration stating that the total amount of fees incurred in the divorce action was $120,000. The trial court, however, estimated $4,500 was a reasonable attorney fee for the previous appeal, and $12,000 for the subsequent trial. Based on these estimates, the court determined James should contribute $3,000 and $4,000, respectively, toward Sharons responsibility for these fees.

A trial courts estimation of the [r]easonable value of services need not bear a direct relationship to the number of hours spent working on the case, because some hours may be unproductive, whereas others may be exceedingly valuable. (Munguia, supra, 146 Cal.App.3d at p. 863.) As noted above, in determining the reasonable value of services rendered by Sharons attorney, the trial court reviewed the court file and concluded that Sharons lawyer wasted much of the time spent in trial. Moreover, the trial court explained the declaration of Sharons attorney was of little use as it provided no itemization or description of the services rendered. Reviewing the evidence in the light most favorable to the order, we cannot say the trial court abused its discretion.

We also reject Jamess challenge to Sharons fee award based on her failure to provide detailed records. The knowledge and experience of the trial judge afford a sufficient basis for fixing the amount of a lawyers fee, even though there was no specific evidence on the subject. (In re Marriage of Ananeh-Firempong (1990) 219 Cal.App.3d 272, 280.) Because the trial court based its fees estimate on its own review of the file and observations during trial, the failure of Sharons attorney to detail the manner in which the actual fees were generated does not compel reversal.

III

Disposition

The judgment is affirmed. James is awarded his costs of this appeal.

ARONSON, J.

WE CONCUR:

RYLAARSDAM, ACTING P. J.

IKOLA, J.

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^[1]In re Marriage of Epstein (1979) 24 Cal.3d 76.

^[2] We refer to Sharon and James Kelly by their first names for clarity and ease of reference, and intend no disrespect. (See In re Marriage of Olsen (1994) 24 Cal.App.4th 1702, 1704, fn. 1.)

^[3] In addition to the two issues involving the Epstein credits, Sharons appeal challenged the trial courts valuation of the couples residence, award of the residence to James, and valuation of certain stock options.

^[4] Code of Civil Procedure section 629 provides, in relevant part: If the motion for judgment notwithstanding the verdict be denied and if a new trial be denied, the appellate court shall, when it appears that the motion for judgment notwithstanding the verdict should have been granted, order judgment to be so entered on appeal from the judgment or from the order denying the motion for judgment notwithstanding the verdict.