Monday, March 7, 2011
Page 1
Court Tosses $200,000 Sanctions Order in Divorce Case
By SHERRI M. OKAMOTO, Staff Writer
This district’s Court of Appeal on Friday ruled that a litigant’s failure to comply with her disclosure obligations during a contentious divorce precluded her from recovering sanctions against her husband for his uncooperative conduct.
Div. Three threw out the $200,000 in sanctions against Gary Fong, but upheld the award of $100,000 in attorney fees and costs to Marci Kington even though the panel found she had also engaged in conduct which protracted the proceedings and heightened the hostility between the parties.
Kington filed a petition in 2002 to dissolve her marriage to Fong and divide their community property. She did not list this property or serve a preliminary declaration of disclosure, but elected to have the community’s assets and obligations be determined at trial.
After six years of litigation, Kington moved for $400,000 in sanctions under Family Code Sec. 2107, contending Fong was refusing to disclose his assets and respond to formal discovery. She also argued that Fong’s conduct justified an award of $150,000 in attorney and accountant fees.
At the time, Sec. 2107(a) provided:
“If one party fails to serve on the other party a preliminary declaration of disclosure under Section 2104 or a final declaration of disclosure under Section 2105, or fails to provide the information required in the respective declarations with sufficient particularity, and if the other party has served the respective declaration of disclosure on the noncomplying party, the complying party may, within a reasonable time, request preparation of the appropriate declaration of disclosure or further particularity.”
Should the noncomplying party fail to respond to such a request, subdivision (c) mandates that a court “shall, in addition to any other remedy provided by law, impose money sanctions against the noncomplying party.”
Los Angeles Superior Court Temporary Judge Glenda Veasey found Fong “has not provided the documents and information required of him in a complete or timely fashion, without unnecessary delay, as required under the fiduciary duty statutes,” and that his conduct “has served to frustrate any realistic possibility of settlement and discourage cooperation between the parties and counsel.” Veasy reduced the amount requested Kington but granted her motion.
Writing for the appellate court, Justice H. Walter Croskey noted “subdivision (a) c expressly states that only a ‘complying party,’ meaning a party that has served a preliminary or final declaration of disclosure, may request that a ‘noncomplying party,’ meaning a party that either has failed to serve the respective declaration of disclosure or has failed to provide the required information with sufficient particularity, prepare or supplement the appropriate declaration of disclosure.”
Based on this language, the justice reasoned that “only a party that has served a preliminary or final declaration of disclosure is entitled to move for an order compelling a party that has failed to serve the respective declaration, or failed to provide the required information with sufficient particularity, to prepare the appropriate declaration of disclosure or supplement the information provided in the declaration of disclosure.”
Although subdivision (c) does not expressly state that only a “complying party” that has served a preliminary or final declaration of disclosure is entitled to an award of monetary sanctions against a noncomplying party, he said, “this limitation is implicit in the statute” since the other remedies provided in Sec. 2107 “are expressly limited to a ‘complying party.’ ”
In the absence of any evidence that Kington had served her final declaration of disclosure before she filed her sanctions motion, Croskey said, she was precluded from receiving an award under Sec. 2107(c).
Croskey, however, said an award of attorney fees and costs as a sanction for Fong’s behavior was appropriate under Sec. 271. He rejected Fong’s contention that the trial court was required to consider his ability to pay since Fong’s disclosed assets “included nine rental properties, his personal residence (a ranch), ten cars, a yacht, savings accounts, gold coins, and other items” and Fong did not “cite or discuss this evidence or argue that it is insufficient to justify the amount of the award.”
Although Fong presented evidence that Kington’s own conduct had frustrated settlement and cooperation between the parties and counsel as well, Croskey emphasized that Sec. 271, unlike Sec. 2107, does not require a moving party be in compliance with any particular obligations before moving for an award.
“Although the extent to which the moving party’s conduct furthers or frustrates settlement may be an appropriate consideration for a court considering an award under section 271, Gary has not shown that Marci’s conduct in these circumstances was so egregious as to compel the conclusion that the award in her favor was unreasonable and an abuse of discretion,” Croskey concluded.
Presiding Justice Joan D. Klein and Justice Richard D. Aldrich joined Croskey in his decision.
Kington appeared pro per, and Fong was represented by Casey A. Olsen and Neil A. Olsen of Olsen & Olsen.
The case is Marriage of Fong, 11 S.O.S. 1295.
Copyright 2011, Metropolitan News Company