Marriage of Plunkett
Filed 8/8/13 Marriage of Plunkett CA4/1
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION
ONE
STATE
OF CALIFORNIA
In re the Marriage of CHRISTA
and CHAD
PLUNKETT.
CHRISTA PLUNKETT,
Respondent,
v.
CHAD
PLUNKETT,
Appellant.
D062540
(Super. Ct.
No. ED74842 )
APPEAL from
a judgment of the Superior Court
of
County, William C. Gentry, Judge. Affirmed.
Patrick L.
McCrary for Appellant.
John J.
McCabe, Jr., for Respondent.
This
dissolution action between Christa Plunkett and Chad Plunkett went to a court
trial wherein Christa
name="_ftnref1" title="">[1]
asserted that Chad
secretly withdrew over $231,000 in community funds just before their
separation. Following the court trial,
of relevance to this appeal, the court, in its statement of decision, (1)
ordered Chad to pay $50,000 in attorney fees to Christa; (2) charged Chad with
a preliminary distribution of community funds in the sum of $181,951 that he
secretly removed from various accounts; (3) reserved jurisdiction over child
and spousal support; and (4) ordered division of Christa's IRA account pursuant
to In re Marriage of Brown (1976) 15
Cal.3d 838 (Brown). Thereafter, when the court entered judgment,
it set child support at $0.
On appeal,
Chad asserts that the court (1) failed to make appropriate findings in its
award to Christa of attorney fees based upon her need and his ability to pay;
(2) erred in not granting attorney fees to him based upon his need and ability
to pay; (3) erred in charging him with a preliminary distribution of community
funds; (4) erred in not giving him credit for living expenses he paid from
those funds; (5) erroneously failed to make findings and orders concerning
child and spousal support; and (6) erred in ordering Christa's IRA account
divided under the Brown rule. We affirm.
FACTUAL
AND PROCEDURAL BACKGROUND
A.
The parties
were married in 1992 and separated in July 2009. Chad
and Christa had two children of the marriage.
Christa's
mother died in February 2008, and Christa inherited the house where the family
had resided with her mother prior to her death.
Chad
and Christa owned an unimproved lot on Sage Road
in El Cajon (Sage
Road property), a home on La
Cresta Boulevard in El Cajon
(La Cresta property) and a home on Scottford Drive
in El Cajon (Scottford property).
The value
of the Sage road property was $115,000, with no encumbrances. The La Cresta property had a value of
$430,000, with total encumbrances of $322,654.
The Scottford property had a value of $360,000, with total encumbrances
of $437,375.
During the
marriage Christa worked as a hair stylist and Chad's
work primarily involved maintaining, improving and managing the real property
owned by the parties.
Chad
and Christa had several equity lines of credit prior to separation, secured by
their real property. In the months
preceding separation, Chad
drew $231,399 from those lines of credit.
A substantial portion of these funds were deposited in a bank account in
the name of Chad's
father. Several postseparation expenses
totaling $20,110 were made from that fund.
The parties
had three vehicles: a 1999 Dodge Durango
valued at $2,000, a 2009 Toyota Corolla purchased by Chad postseparation with
community funds, and a 2004 Ford F-150 with a value of $2,400.
B.
This matter
was tried over five days in April, June, August and September 2001. The issues outstanding at the time of trial
were (1) the four parcels of real property and their associated debt; (2)
community funds withdrawn from the lines of credit; (3) the disposition of
funds from the sale of the Dodge Durango; (4) division of Christa's IRA; (5)
which party would manage the children's bank accounts; (6) allocation of
community credit card debts; (7) disposition of the 2009 Toyota Corolla and the
2004 Ford F-150; (8) child support; (9) spousal support; (10) damages, if any,
due to Christa for Chad's breach of fiduciary duty; and (11) attorney fees and
costs.
In her trial brief Christa alleged Chad was
responsible for secretly withdrawing $231,399 from the equity lines of credit
shortly before the parties' separation.
Christa testified she was not aware Chad had withdrawn the funds until a
year following the parties' separation.
Christa further testified she did not agree to the withdrawals. Chad admitted at trial that he did not
disclose evidence of the withdrawals in bank documents contained in his
discovery responses produced three
months after the inception of this proceeding.
Christa asserted she had no knowledge of Chad's control of these funds
until he prepared and served his preliminary
declaration of disclosure one year later, in July 2009.
Chad
testified he provided an accounting of the funds at the mandatory settlement
conference. However, Christa testified
she never saw such an accounting until several days before the trial.
Following
trial, the court issued a statement of decision. Of relevance to this appeal, with regard to
Chad's withdrawals from the lines of credit the court found that $181,951 be
characterized as a predistribution of community property assets. In doing so, the court stated as
follows: "The Court is suspicious
of the motivations surrounding such large draws upon virtually every line of
credit the couple had in place without consultation with Christa in such a
short period of time. While the parties
had used equity lines of credit in the past, the fact that the funds were
deposited into an account to which Christa did not have access is
disturbing." The court ordered
Christa's IRA account "divided pursuant to the holding of
approximately $2,600 per month from her job as a hair stylist. The court did not state the amount that Chad
could earn, but found that Chad had "the ability to undertake general
labor and service industry jobs, recognizing he may have some physical
limitations." The court reserved
jurisdiction over child and spousal support.
The court awarded Christa
$50,000 in attorney fees and costs, but did not indicate whether it was based
upon the parties' needs and ability to pay or as a sanction based upon Chad's
conduct. Neither party filed any
objections to the statement of decision.
Thereafter, when the court entered judgment, it set child support at $0.
DISCUSSION
I. AWARD
OF ATTORNEY FEES
Chad first asserts the court
erred in awarding Christa attorney fees in the amount of $50,000 without first
making adequate findings on Christa's need and Chad's ability to pay. Chad further asserts that the court erred in
not awarding fees to him based upon
his need and Christa's ability to pay.
These contentions are unavailing.
With
respect to an award of need-based attorney fees, Family Code
section 2030, subdivision (a)(2) provides:
"When a request for attorney's fees and costs is made, the court
shall make findings on whether an award of attorney's fees and costs under this
section is appropriate, whether there is a disparity in access to funds to
retain counsel, and whether one party is able to pay for legal representation
of both parties. If the findings demonstrate
disparity in access and ability to pay, the court shall make an order awarding
attorney's fees and costs."
Section
2032 further provides: "(a) The
court may make an award of attorney's fees and costs under Section 2030 or 2031
where the making of the award, and the amount of the award, are just and
reasonable under the relative circumstances of the respective parties. [¶]
In determining what is just and reasonable under the relative circumstances,
the court shall take into consideration the need for the award to enable each
party, to the extent practical, to have sufficient financial resources to
present the party's case adequately, taking into consideration, to the extent
relevant, the circumstances of the respective parties described in Section
4320. The fact that the party requesting
an award of attorney's fees and costs has resources from which the party could
pay the party's own attorney's fees and costs is not itself a bar to an order
that the other party pay part or all of the fees and costs requested. Financial resources are only one factor for
the court to consider in determining how to apportion the overall cost of the
litigation equitably between the parties under their relative circumstances."
Further,
section 271 provides for an award of attorney fees as a sanction for
unreasonable conduct:
"Notwithstanding any other provision of this code, the court may
base an award of attorney's fees and costs on the extent to which the conduct of
each party or attorney furthers or frustrates the policy of the law to promote
settlement of litigation and, where possible, to reduce the cost of litigation
by encouraging cooperation between the parties and attorneys. An award of attorney's fees and costs
pursuant to this section is in the nature of a sanction. In making an award pursuant to this section,
the court shall take into consideration all evidence concerning the parties'
incomes, assets, and liabilities. The
court shall not impose a sanction pursuant to this section that imposes an unreasonable
financial burden on the party against whom the sanction is imposed. In order to obtain an award under this
section, the party requesting an award of attorney's fees and costs is not
required to demonstrate any financial need for the award."
The
statement of decision does not state whether the attorney fee award to Christa
in the amount of $50,000 was based upon her need or as a sanction based upon
Chad's conduct. However, the record
reflects that the court had an adequate basis to either award fees to Christa
based upon need, or as a sanction against Chad.
As to need-based fees, the court found that Christa made $2,600 a month
as a hairstylist and that Chad had the ability to earn money consistent with
"general labor and service industry jobs." The court further attributed $181,951 in
withdrawn funds to Chad as a preliminary distribution of community assets,
further evidencing an ability to pay.
Moreover,
there was ample evidence from which the court could base an award of attorney
fees under section 271, which does not necessitate a showing of need by the
requesting party. The trial in this
matter centered in large part on Chad's withdrawal of over $231,000 from the
couple's equity lines of credit without notice to, or permission from, Christa. In its statement of decision, the court found
these actions "suspicious" and "disturbing." These findings amply support the court's
imposition of attorney fees under section 271 and a denial of fees to Chad.
II. CHARGE
OF $181,951 AGAINST CHAD
Chad next
asserts that the court erred in charging him with $181,951 to be characterized
as a predistribution of community property assets. We reject this contention.
As the
Court of Appeal stated in In re Marriage
of Prentis-Margulis &Margulis (2011) 198 Cal.App.4th 1252, 1269 (
the fiduciary obligations
between spouses provide
strong support for
shifting the burden
of proof to
when determining the
value and disposition
of missing assets.
The
section 721, which provides
that accountability
for the management
of community assets
is a fundamental
aspect of the
fiduciary duties owed
between spouses. [¶] Section 721,
subdivision (b), states, in
a husband and
wife are subject
to the general
rules governing fiduciary
relationships
actions of persons
occupying confidential
other. This confidential
duty of the
and fair dealing
on each spouse,
and neither shall
take any unfair
advantage of the
other. This confidential
fiduciary relationship
business partners, as
provided in Sections
16403, 16404, and 16503
of the Corporations Code, including, but
not limited to,
the following: [¶] (1)
access at all
times to any
a transaction for
the purposes of
inspection and copying. [¶] (2)
true and full
information of all
things affecting any
transaction which concerns
the community property.
Nothing
to keep detailed
books and records
of community property
transactions. [¶]
spouse, and holding
as a trustee,
any benefit or
profit derived from
any transaction by
one spouse without
the consent of the
other spouse which
concerns community property.
In
addition, "[c]onsistent with these fiduciary obligations, section 2100,
subdivision (c) provides that 'a full and accurate disclosure of all assets and
liabilities in which one or both parties have or may have an interest must be
made in the early stages of a proceeding for dissolution of marriage or legal
separation of the parties, regardless of the characterization as community or
separate, together with a disclosure of all income and expenses of the
parties.'" (In re Marriage of
Feldman (2007) 153 Cal.App.4th 1470, 1476.)
The
that: "Taken together, these Family
Code provisions impose on a managing spouse affirmative, wide-ranging duties to
disclose and account for the existence, valuation, and disposition
of all community assets from the date of separation through final property
division. These statutes obligate a
managing spouse to disclose soon after separation all the property that belongs
or might belong to the community, and its value, and then to account for the
management of that property, revealing any material changes in the community
estate, such as the transfer or loss of assets.
This strict transparency both discourages unfair dealing and empowers
the nonmanaging spouse to remedy any breach of fiduciary duty by giving that
spouse the 'information concerning the [community's] business' needed for the
exercise of his or her rights [citations], including the right to pursue a
claim for 'impairment to' his or her interest in the community estate
[citation]." (Margulis,
supra, 198 Cal.App.4th at pp. 1270–1271.)
The court
did not err in charging Chad with preseparation assets. It is undisputed that Chad withdrew over
$231,000 from the parties' equity lines of credit within three months prior to
the separation in July 2008. During
trial, Chad identified the specific withdrawals from the lines of credit during
those three months. In his preliminary
declaration of disclosure, Chad acknowledged there was $186,000 remaining from
his withdrawal from one line of credit.
The evidence of Chad's secret withdrawals was detailed in the statement
of decision in support of its finding that Chad would be charged with a
preliminary distribution of community funds removed from the various accounts
in the sum of $181,951.
III. LIVING
EXPENSES
Chad asserts
he should be given a credit for his
use of the preseparation withdrawn funds for his living expenses. This contention is unavailing.
Chad
admitted at trial that at an early hearing in this proceeding, his counsel told
the court that Chad should be permitted to remain in the La Cresta residence
because he had the ability to maintain the residence, either alone or with the
help of his parents. However, for the
first time at trial, Chad then testified his attorney was misinformed and
incorrect when he made that representation.
During the
pendency of this proceeding, Chad filed three income and expense declarations. A review of these declarations reveals that
at no time did Chad disclose he was utilizing funds to live on that he secretly
withdrew from community accounts. Chad
cannot now assert that, having withdrawn community funds and secretly applied
them for his personal benefit before separation, such funds should be deducted
from the total funds he concealed and misused.
The evidence reflects, as the court found in its statement of decision,
Chad hid them in his father's account and then used them as he chose after
separation. Chad cannot profit from his own wrongdoing.
IV. CHILD
AND SPOUSAL SUPPORT
Chad
asserts that the court erred by making only "minimal findings" in
reserving jurisdiction over child and spousal support in its statement of
decision, and thereafter in the final judgment, reducing child support to
$0. We reject this contention.
First, Chad never objected to the
statement of decision, although authorized to do so under California Rules of
Court, rule 3.1590(g). He has therefore
forfeited any contention the court's findings were inadequate. (Atari,
Inc. v. State Bd. of Equalization (1985) 170 Cal.App.3d 665, 674-675.)
Moreover,
there is substantial evidence in the record to support the court's
decision. At trial, the court had before
it both Chad's and Christa's income and expense declarations. Both declarations set forth, in detail, the
nature and extent of each party's income and respective financial need. In the statement of decision, the court
detailed the work history of the parties, including Chad's college history and
prior work as an accountant. The court
also noted in its statement of decision that Chad had the skills and ability to
secure employment.
the court's decision concerning child and spousal support.
V.
Chad asserts that the court erred in
ordering the division of Christa's IRA account in accordance with
enunciated in Brown, which applies to
pension benefits that are based on the number of years of employment, is
inapplicable because there is no evidence that Christa's IRA was related to her
employment. This contention is
unavailing.
Contrary to Chad's contention,
"Brown
either establish or
as a method
pension division on
the court's exercise
of its retained
jurisdiction." (In re Marriage of Gray (2007) 155
Cal.App.4th 504, 519.) The
to the Brown formula in the parties'
judgment in that case was reasonably interpreted as only an indication that at
the time of the parties' judgment the court had determined the community had in
interest in the husband's pension and had directed that community interest
would be divided "in kind" in the future exercise of its discretion. (Id.
at p. 509.)
Likewise,
in this case the community had an interest in Christa's IRA. That interest needs to be divided, but not
pursuant to any time rule. Rather, the
interest must be divided based upon the nature and extent of community and
separate property contributions.
DISPOSITION
The judgment is affirmed.
NARES, J.
WE CONCUR:
HUFFMAN, Acting P. J.
HALLER, J.
name="_ftn1" title="">[1]
As is the custom in family law
proceedings, and in the interest of clarity, we refer to the parties by their
first names. (In re Marriage of Dietz (2009) 176 Cal.App.4th 387, 390, fn.
1.) We intend no disrespect.
name="_ftn2" title="">[2]
All further undesignated
statutory references are to the Family Code.
