Filed: 2/8/17

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

In re the Marriage of Charles and Lori 

SCHLEICH.

 H039870, H041234

 (Santa Clara County

 Super. Ct. No. 6-09-FL-001572)

CHARLES SCHLEICH,

Appellant,

v.

LORI HOLEK,

Respondent.

Charles Schleich (Husband) appeals from a judgment dissolving his marriage to 

Lori Holek (Wife), following a lengthy trial addressing several disputed issues. He 

challenges the trial court’s imposition of the “value of the asset” remedy under Family 

Code section 1101, subdivisions (g) and (h) for failing to make financial disclosures in 

the dissolution proceedings he viewed as having no impact on Wife’s interest in the 

community estate. He also challenges the award of certain assets in the division of the 

community estate as duplicative of the remedy imposed under section 1101,

1

and the 

award of permanent spousal support. In a related appeal, Husband challenges the trial 

court’s post-judgment award to Wife of need-based attorney’s fees ($412,485) and 

attorney’s fees as sanctions for the fiduciary duty breaches ($318,510). 

 

1 Undesignated statutory references are to the Family Code. Undesignated 

subdivisions refer to section 1101.
2

As we will explain, the trial court erred by making duplicative awards of 

community assets. The award to Wife of 50 percent of a community asset (or 50 percent 

of the value of the asset) as a remedy under subdivision (g) is an award of the same 

interest in the asset awarded in the division of community property, and can be awarded 

only once. Similarly, the trial court erred by awarding Wife the full value of certain 

community assets as a remedy under subdivision (h) in addition to 50 percent of the same 

asset in the division of property. Once Wife received the entire asset under 

subdivision (h), there was no longer a community interest in that asset subject to property 

division.

The trial court also erred by finding breaches of fiduciary duty under section 1101 

for dissolution disclosure violations involving Husband’s separate property and 

community income earned and spent before separation. Post-separation disclosure 

violations involving separate property or community income spent before the date of 

separation do not support breach of fiduciary duty claims under section 1101 because 

they have no impact on the community estate. The breaches, however, are sanctionable 

under section 2107.

We cannot tell from the record before us whether the award to Wife of sanctionsbased fees and costs depended on the relative number of breach of duty issues on which 

she prevailed. Therefore, we will reverse and remand the attorney’s fees judgment to 

give the trial court the opportunity to reexamine the amount of fees and costs awarded 

under sections 1101 and 2107, in light of our determinations on the breach of fiduciary 

duty claims. In all other respects, we will uphold the two judgments in their entirety.

I. BACKGROUND

In February 2009 Husband filed a petition to divorce Wife. The parties enjoyed a 

high standard of living during the nearly 10-year marriage. They built a house, a barn,

and stables on an undeveloped ranch in Lemon Cove, Tulare County, that Husband had 

purchased before the marriage. They purchased horses and equipment to operate the 
3

ranch, which supported Wife’s hobby/vocation of raising and training horses. Wife

maintained the ranch, and Husband, who lived and worked in the Silicon Valley during 

the week, flew home to the ranch on weekends. The parties purchased a second ranch

with a small guest cottage in Exeter, also in Tulare County, during the marriage. At the 

time Husband filed for divorce, the parties owned the two ranches, 15 horses, nine 

vehicles, six motorcycles, two Airstream travel trailers, an airplane, a boat, three horse 

trailers, and three tractors. 

Husband earned over $200,000 annually throughout the marriage, employed by a 

semiconductor manufacturer in San Jose. He also ran two side businesses that generated

substantial income selling parts to his employer. Wife was not involved in Husband’s 

business activities and she only became aware of the side businesses after the parties 

separated.

Husband served Wife with the dissolution petition and a $75,000 marital 

settlement agreement, warning her that “it could get very ugly” if she did not sign the 

agreement. Wife rejected the offer and retained counsel who sought temporary spousal 

support ($7,100 monthly) and $150,000 in pendente lite need-based attorney’s fees under 

section 2030, in part to discover hidden assets. In April 2009, the court set temporary 

spousal support at $6,233 monthly and ordered Husband to pay Wife $75,000 in needbased attorney’s fees. 

In July 2009 Wife moved for evidentiary and monetary sanctions, including 

$122,531 in attorney’s fees and costs as a sanction under section 271 and section 2107, 

subdivision (c), because Husband had not complied with dissolution financial disclosure 

requirements and was preventing Wife from discovering “the true extent of his income 

and financial condition.” Wife also sought $150,900 in need-based attorney’s fees under 

section 2030, and $25,386 in monthly spousal support. In a declaration supporting that 

motion, Wife stated that Husband told her he “refused to settle this case unless I ‘got rid 
4

of’ my attorneys,” and that “he will litigate this case until there is nothing – money or 

assets – left to be divided.” 

After a long-cause hearing, in February 2010 the court ordered Husband to pay 

Wife $7,600 in monthly support retroactive to March 2009, and $6,800 in monthly 

support for 2010. The court ordered Husband to pay Wife an additional $30,000 in needbased attorney’s fees, and reserved ruling on Wife’s sanctions motion. The court 

commented that Husband had “shown an unwillingness or inability to completely selfreport income” so that it could not “trust that [Husband] was reinvesting in good faith 

rather than attempting to avoid additional support obligations.” This court issued an 

unpublished opinion in In re Marriage of Schleich (H035513, filed May 10, 2011) 

affirming the long-cause order against Wife’s claims of error, including her claim that the 

trial court abused its discretion by reserving judgment on the request for sanctions rather 

than ruling on the motion.

In July 2011, Wife again moved for attorney’s fees and sanctions, seeking 

$200,000 in need-based attorney’s fees and $200,000 in sanctions for Husband’s 

breaches of fiduciary duty and his misconduct throughout the case. She also sought an 

increase in temporary spousal support. Opposing Wife’s motion, Husband requested 

$100,000 in attorney’s fees as a sanction for increasing his litigation costs. Wife opposed 

Husband’s request to continue the hearing date. She later agreed to Husband’s request 

that the motion be heard with the trial set for January 2012 to avoid a double setting after 

Husband indicated the hearing would require at least a full day and no full day setting 

was available until January.

In the parties’ respective trial briefs, Husband restated his request for $100,000 in 

attorney’s fees and costs as a sanction, and Wife asked for $950,000 in need-based 

attorney’s fees and costs and $300,000 in attorney’s fees as a sanction. Her trial brief

identified several alleged fiduciary duty breaches by Husband, and she argued for an 
5

award of 100 percent of any undisclosed or transferred assets as a penalty under section 

1101, subdivision (h). 

After an eight-day trial in January 2012, the parties submitted a joint list of 

disputed issues for decision. With the parties’ input, the court prepared tables identifying 

each party’s breach of fiduciary duty claims, with the parties’ positions on each claim

supported by record citations. The court issued a proposed statement of decision, and, 

after hearing argument on the parties’ objections, issued a 50-page statement of decision 

in February 2013 addressing temporary and permanent spousal support, property 

characterization, reimbursement claims, and sanctions for breaches of fiduciary duty (two 

by Wife and 12 by Husband). The statement of decision was followed by an order and 

accounting directing Husband to pay Wife $826,789 ($25,496 in spousal support arrears, 

$245,273 to divide the community estate, and $556,020 to remedy Husband’s fiduciary 

breaches). The court reserved ruling on attorney’s fees pending an anticipated mediation

that was ultimately unsuccessful.

After further briefing and argument, in May 2014 the court issued a statement of 

decision addressing attorney’s fees. The court awarded Wife $318,510 in attorney’s fees 

and $5,737.50 in costs as a remedy under section 1101, subdivisions (g) and (h) and 

section 2107 for attorney time and effort related to Husband’s breaches of fiduciary duty.

That award was offset by $15,000 for attorney’s fees incurred by Husband associated 

with Wife’s breaches of fiduciary duty. Wife was awarded $412,485 in need-based 

attorney’s fees (out of $1,543,321 requested) under section 2030, offset by $105,000 for 

fees paid to her earlier. 

Husband has appealed from the judgments incorporating both statements of 

decision. 
6

II. DISCUSSION

A. STANDARDS OF REVIEW

We review a trial court’s division of community property and imposition of

sanctions in dissolution proceedings under the abuse of discretion standard. 

(In re Marriage of Quay (1993) 18 Cal.App.4th 961, 966 [property division]; In re 

Marriage of Feldman (2007) 153 Cal.App.4th 1470, 1478 [sanctions under sections 271 

and 2107].) Spousal support orders and attorney’s fees awards are also reviewed for 

abuse of discretion. (In re Marriage of Cheriton (2001) 92 Cal.App.4th 269, 283

[attorney’s fees under section 2032]; In re Marriage of Feldman, at p. 1478 [attorney’s 

fees under sections 271 and 2107].) We review questions of law presented on undisputed 

facts de novo. (In re Marriage of Blazer (2009) 176 Cal.App.4th 1438, 1443.) We also 

apply an independent standard of review to questions of statutory interpretation. (People 

v. Johnson (2007) 150 Cal.App.4th 1467, 1481.)

“A judgment or order of a lower court is presumed to be correct on appeal, and all 

intendments and presumptions are indulged in favor of its correctness.” (In re Marriage 

of Arceneaux (1990) 51 Cal.3d 1130, 1133.)

B. STATUTORY FRAMEWORK

1. Marital Rights and Obligations

Division 4 of the Family Code addresses marital rights and obligations. Within 

that division, section 721 recognizes the confidential relationship held by spouses. That 

relationship is a fiduciary relationship “impos[ing] a duty of the highest good faith and 

fair dealing on each spouse[.]” (§ 721, subd. (b).) Also within that division, section 1100 

addresses management and control of community property. Subdivision (e) of that 

section provides: “Each spouse shall act with respect to the other spouse in the 

management and control of the community assets and liabilities in accordance with the 

general rules governing fiduciary relationships which control the actions of persons 

having relationships of personal confidence as specified in Section 721, until such time as 
7

the assets and liabilities have been divided by the parties or by a court. This duty 

includes the obligation to make full disclosure to the other spouse of all material facts and 

information regarding the existence, characterization, and valuation of all assets in which 

the community has or may have an interest and debts for which the community is or may 

be liable, and to provide equal access to all information, records, and books that pertain to 

the value and character of those assets and debts, upon request.”

Section 1101 creates a right of action and specific remedies for the breach of a 

spouse’s fiduciary duty “that results in impairment to the claimant spouse’s present 

undivided one-half interest in the community estate[.]” (§ 1101, subd. (a); In re

Marriage of Prentis-Margulis & Margulis (2011) 198 Cal.App.4th 1252, 1270.) A

section 1101 action may be brought separate from or in conjunction with a dissolution 

action. (§ 1101, subd. (f).) Section 1101, subdivisions (g) and (h) provide remedies for a 

spouse’s breach of fiduciary duty. Under subdivision (g), “[r]emedies for breach of the 

fiduciary duty by one spouse, including those set out in Sections 721 and 1100, shall 

include, but not be limited to, an award to the other spouse of 50 percent, or an amount 

equal to 50 percent, of any asset undisclosed or transferred in breach of the fiduciary duty 

plus attorney’s fees and court costs.” When the breach constitutes fraud, oppression or 

malice, the remedy “shall include, but not be limited to, an award to the other spouse of 

100 percent, or an amount equal to 100 percent, of any asset undisclosed or transferred in 

breach of the fiduciary duty.” (§ 1101, subd. (h).)

2. Marital Dissolution

Division 6 of the Family Code addresses marital separation and dissolution. 

Chapter 9 of Part 1 of that division, titled “Disclosure of Assets and Liabilities,” contains 

sections 2100 to 2113. Section 2100 announces a public policy of full disclosure and 

cooperation in a marital dissolution. (§ 2100, subd. (b).) To that end, subdivision (c) 

mandates “a full and accurate disclosure of all assets and liabilities in which one or both 

parties have or may have an interest” in the early stages of a dissolution proceeding, 
8

“regardless of the characterization as community or separate, together with a disclosure 

of all income and expenses of the parties.” Subdivision (c) imposes “a continuing duty to 

immediately, fully, and accurately update and augment that disclosure” so that “each 

party will have a full and complete knowledge of the relevant underlying facts.” 

Section 2102 extends the fiduciary standards under section 721 “to all activities 

that affect the assets and liabilities of the other party” from the date of separation to the 

date community property is distributed in dissolution proceedings. (§ 2102, subd. (a).) 

Those activities include (1) “accurate and complete disclosure of all assets and liabilities 

in which the party has or may have an interest or obligation and all current earnings, 

accumulations, and expenses,” including “immediate, full, and accurate update[s];” 

(2) accurate and complete written disclosure of any investment or business opportunity;

and (3) the operation or management of a business (or a business interest) in which the 

community may have an interest. (§ 2102, subd. (a)(1)–(3).) 

Section 2107 mandates monetary sanctions against a party who fails to comply 

with any provision in Chapter 9 “in an amount sufficient to deter repetition of the conduct

or comparable conduct.” (§ 2107, subd. (c).) 

Section 271, located under the Family Code’s General Provisions, provides as a 

sanction that the court may award attorney’s fees or costs when a party’s conduct 

“frustrates the policy of the law to promote settlement of litigation” and “to reduce the 

cost of litigation by encouraging cooperation between the parties and attorneys.” (§ 271, 

subd. (a).) 

C. CHALLENGES TO FIRST STATEMENT OF DECISION

1. Section 1101 Breach of Fiduciary Duty Claims

Husband challenges the trial court’s imposition of the section 1101, 

subdivisions (g) and (h) remedies for failing to comply with financial disclosure 

obligations regarding (1) separate property, (2) pre-separation side business income, (3) a 
9

pre-separation loan from community funds, and (4) a post-separation car purchased with 

community funds.

2

 

a. Husband’s separate property

Relying on In re Marriage of Simmons (2013) 215 Cal.App.4th 584 (Simmons), 

Husband argues that the trial court erred by applying the subdivision (g) remedy to his 

failure to disclose separate property. In Simmons, a marriage dissolution action, the trial 

court imposed $150,000 in sanctions against a husband under section 2107 for breach of 

the fiduciary disclosure duties, $250,000 in sanctions under section 271 for uncooperative 

conduct, and the entire value of the husband’s separate property savings account (over 

$245,000) under subdivision (h) for fraudulently failing to disclose that asset. (Simmons, 

at pp. 588–589.) The appellate court reversed the portion of the judgment awarding 

sanctions under subdivision (h), holding that remedy “applies only to the nondisclosure 

of a community property asset, and it does not apply to the nondisclosure of a separate 

property asset.” (Id. at pp. 587, 595.) 

The Simmons court looked to the placement of subdivision (h) in section 1101—a 

section of the Family Code exclusively concerning community property—to support its 

conclusion that “any asset” in subdivision (h) means any community asset. The court 

read subdivision (h) in conjunction with subdivision (a), providing for a breach of 

fiduciary duty claim “upon an impairment of a community interest.” (Simmons, supra, 

215 Cal.App.4th at p. 593.) Further, the Simmons court observed that subdivision (f) 

authorizes a section 1101 breach of fiduciary duty claim to be brought during a marriage, 

where separate property would be irrelevant to any fiduciary breach determination. 

(Simmons, at p. 593.) Simmons also noted other remedies in the Family Code expressly 

 

2

The statement of decision supports imposition of the value of the asset remedy 

for every fiduciary breach with a citation to section 1100, subdivision (g). We 

understand the trial court to be imposing the “50 percent of the asset” remedy under 

section 1101 subdivision (g) and the “100 percent of the asset” remedy under section 

1101, subdivision (h). 
10

applicable to separate property in dissolution proceedings—section 271 for uncooperative 

conduct and section 2107 for nondisclosure of any asset. (Simmons, at p. 593.) The court 

considered the fundamental principle of community property and the corollary spousal 

fiduciary duty to preserve the other’s one-half interest in that property. It viewed 

subdivision (h) as a deviation from community property’s equal ownership and division 

principles, which would not extend to separate property because separate property is not 

subject to equal ownership. (Id. at pp. 593–594.) 

The Simmons court noted the reference to section 721 in subdivision (h) and 

observed that the fiduciary duty under that section is broad enough to encompass the duty 

to disclose separate property assets in dissolution proceedings. (Simmons, supra, 

215 Cal.App.4th at p. 594.) Still, it declined to construe the subdivision (h) reference to 

section 721 as an intent to extend the subdivision (h) remedy to nondisclosure of separate 

property because “the statutory context and nature of the section 1101(h) remedy show 

that the remedy is confined to community property ... .” (Id. at p. 594.) 

We agree with Simmons and conclude that its analysis, although focused on 

subdivision (h), necessarily applies to subdivision (g). Both subdivisions (g) and (h) 

provide remedies for a spouse’s fiduciary breach that impairs the other’s community 

property interest, the distinction being only whether the breaching spouse’s conduct 

constitutes oppression, fraud, or malice. 

Wife argues that Simmons was wrongly decided. She contends that the 

Legislature, by including references to community property in other subdivisions of 

section 1101, did not intend to limit the section 1101 remedies to community assets; thus, 

the omission of any reference to “community” assets in subdivisions (g) and (h) must 

have been purposeful. In our view, a reading of section 1101 in its entirety demonstrates 

the opposite. Subdivisions (g) and (h) provide remedies for claims brought under section 

1101. Under subdivision (a), a breach affecting the claimant’s community property 
11

interest is required to support that claim, making it unnecessary for the remedy provisions 

also to characterize the relevant asset as a community interest. 

Wife also argues that Husband would be held harmless for violating section 721’s 

disclosure duties regarding his separate property if subdivisions (g) and (h) did not 

provide remedies for those breaches. That is incorrect. Husband’s fiduciary breaches 

that impair Wife’s community property interests are appropriately remedied under 

subdivisions (g) and (h), and Husband can be held accountable for non-disclosures

implicating his separate property interests under section 2107. 

i. The brokerage accounts

Husband maintained three investment brokerage accounts with a collective 

balance at separation of $133,763. The parties agreed that $25,800 was community 

property and the remainder was Husband’s separate property. Wife does not dispute that 

property characterization. The court abused its discretion by awarding Wife 50 percent 

of the collective account balances ($66,882) under subdivision (g) because Husband did 

not breach any fiduciary duty impairing Wife’s interest in the community estate by 

failing to disclose his separate assets. Under subdivision (g), Wife is entitled to half of 

the $25,800 community funds ($12,900) plus attorney’s fees for Husband’s breach. 

Husband is also subject to sanctions under section 2107 for breaching his dissolution 

disclosure obligations related to both his separate and community interests in the 

accounts. 

Wife withdrew about $8,000 of community funds after the parties had separated 

without informing Husband.3 She, in turn, was penalized by the trial court under 

subdivision (g) for failing to disclose that activity. Husband argues that Wife should not 

 

3

The record shows the actual amount as $8,400. But Husband pursued his breach 

of fiduciary claim in the trial court using an $8,000 figure, and the court relied on that 

amount in sanctioning Wife. Husband has forfeited any argument relying on the $8,400 

figure. (See In re Marriage of Calcaterra and Badakhsh (2005) 132 Cal.App.4th 28, 37.)
12

receive a 50 percent interest in that portion of the community funds under subdivision (g) 

because Wife appropriated those funds to herself. For the reasons stated in part II.C.2, 

we agree. Under subdivision (g), a prevailing spouse is awarded attorney’s fees and court 

costs for the other spouse’s breach regarding a community asset, but neither spouse is 

entitled to more than his or her 50 percent interest in that asset. Accordingly, Wife’s 

earlier withdrawal must be deducted from her $12,900 interest in the community funds. 

Because the court penalized Wife $4,000 under subdivision (g) for withdrawing $8,000 

from the community funds, Wife is ultimately entitled to $8,900 (instead of $66,882) so 

that each party receives a 50 percent share of the entire asset. 

ii. The vintage Corvette

The statement of decision’s reference to the vintage Corvette as community 

property appears to be a mistake. The characterization of the Corvette as separate 

property was not a disputed trial issue. Wife admitted in her April 2009 disclosure that 

the Corvette was Husband’s separate property, and Husband testified to purchasing the 

car before the marriage. The parties do not dispute that the Corvette was Husband’s 

separate property or that he failed to disclose the post-separation sale of that asset, valued 

at $30,000. As we have explained, Husband cannot be penalized under subdivision (g) 

because the sale of the Corvette did not impair Wife’s interest in the community estate. 

But Husband is subject to sanctions under section 2107 for breaching his disclosure 

obligations regarding that sale.

b. Undisclosed pre-separation income 

Husband argues that the court erred in applying the subdivision (h) remedy for 

failing to disclose $164,614 in side business income received and spent during the year 

before separation. He acknowledges that he breached a fiduciary duty by failing to 

disclose the income on his early income and expense declarations. But he argues that his 

failure to report the pre-separation income in post-separation dissolution disclosures is 

not a fiduciary breach involving a community asset under section 1101 because that
13

income had been spent during the marriage. Although he had the duty to disclose his 

earnings, those earnings, having been spent, were not part of the community estate in 

February and April 2009 when the breaches occurred. In his view, Husband was subject 

to sanctions under section 2107 for failing to disclose income, but not under section 1101

because no breach occurred regarding Wife’s post-separation interest in that income. 

As we have explained, although the section 1101 remedies may extend to 

disclosure breaches, they are limited to disclosure breaches that “result in impairment to 

the claimant spouse’s present undivided one-half interest in the community estate.” 

(§ 1101, subd. (a).) In the statement of decision, the court concluded: “Given the parties’ 

lifestyle during marriage and the income necessary to maintain that lifestyle, ... the [side

business] income earned during marriage was spent pre-separation for the mutual benefit 

of the community.” (Italics in original.) The failure to disclose income received and 

spent pre-separation on a post-separation income and expense declaration is not a 

fiduciary breach resulting in the impairment of the claimant spouse’s interest in the 

community estate under section 1101, subdivision (a) because that income, having been

spent, is no longer part of the community estate when the post-separation breach 

occurred. Accordingly, the court erred by applying the subdivision (h) remedy to those 

disclosure violations.4

Wife cites In re Marriage of Fossum (2011) 192 Cal.App.4th 336 (Fossum), 

In re Marriage of Rossi (2001) 90 Cal.App.4th 34 (Rossi), and In re Marriage of Geraci

(2006) 144 Cal.App.4th 1278 (Geraci), to argue that income should be treated as an asset 

 

4

The court applied the subdivision (g) and (h) remedies to Husband’s failure to 

disclose two other checks for income earned pre-separation but received post-separation.

Husband does not challenge the court’s characterization of that income as an asset. 

Indeed, that income, having not dissipated during the marriage, is properly characterized 

as a community asset for dissolution disclosure purposes. (Cf. In re Marriage of PrentisMargulis & Margulis, supra, 198 Cal.App.4th at p. 1259, fn. 4; In re Marriage of 

Koppelman (1984) 159 Cal.App.3d 627, 633–634.)
14

upon receipt, but none of those cases apply a section 1101 remedy to a post-separation 

breach involving assets dissipated before separation. In Fossum, the court held that 

husband was entitled to attorney’s fees under subdivision (g) for wife’s pre-separation 

breach of fiduciary duty. (Fossum, at p. 347.) The wife had taken a $24,000 cash 

advance without disclosing the transaction to husband, and that breach resulted in a 

community debt impacting husband’s present interest in the community estate. In Rossi, 

the court upheld a subdivision (h) award to husband of wife’s pre-separation lottery 

winnings received post-separation because wife fraudulently failed to disclose the 

winnings in dissolution proceedings. (Rossi, at p. 42.) The lottery winnings were a 

community asset, and wife’s failure to disclose the winnings impaired husband’s interest 

in the community asset. 

In Geraci, the trial court had ordered husband to pay a disproportionate share of 

the community debt for violating dissolution disclosure duties and fiduciary duties as a 

business partner. The case was remanded for a redetermination of sanctions after the 

appellate court concluded that a post-separation business partnership between husband 

and wife did not exist so husband had not breached any fiduciary duty to wife as a 

business partner. (Geraci, supra, 144 Cal.App.4th at pp. 1295–1296.) The Geraci court 

approved of “some type of punishment or sanctions” against husband for disclosing false 

post-separation earnings, but it made no reference to section 1101. (Id. at p. 1295.) 

Wife argues that Husband’s fiduciary duty violations were not limited to the nondisclosure in his declarations. She presses that Husband breached his fiduciary duty in 

the management of the community estate by failing to disclose the existence of the side 

businesses and by shutting down the businesses to reduce his financial obligations preseparation. The problem with Wife’s position is that the trial court did not find any 

fiduciary breaches or impose section 1101 remedies for any pre-separation conduct. The 

statement of decision found that Husband breached his fiduciary duty post-separation by 

failing to comply with disclosure requirements, and Wife has not appealed that ruling.
15

c. Undisclosed pre-separation loan

Husband argues that the trial court erred by imposing the subdivision (g) remedy 

for failing to disclose a $200,000 loan made from community funds in February 2008,

$178,750 of which was repaid before separation ($148,750 in April 2008 and $30,000 in 

August 2008). The court characterized the full loan as an asset and awarded Wife

$100,000 for Husband’s failure to identify the loan on the February 2009 preliminary 

disclosure declaration. The court rejected Wife’s argument that Husband had breached 

his fiduciary duty pre-separation by loaning the money without her knowledge, because 

“it was commonplace for [Husband] to conduct business transactions without consulting 

[Wife] given the parties’ consensual arrangement regarding financial matters during 

marriage.”

As with the undisclosed income that had been received and spent before 

separation, Husband argues that the $178,750 loan repayment also was income received 

and spent before separation. Although the court did not make a dissipation finding with 

respect to the loan repayment, it did admit into evidence a 14-page accounting of a 

brokerage account to which the repayments were deposited (Joint Exhibit 44). That 

exhibit, stipulated to by the parties, showed the $148,750 repayment deposited in April 

2008 followed about six weeks later by a $175,000 transfer of funds to an Ecopeds 

account,

5

resulting in a zero balance in the community funds contained in the brokerage 

account as of June 2008. Joint Exhibit 44 also shows the $30,000 loan repayment

deposited in August 2008, and the parties stipulated to a community interest in that 

account as of the date of separation of $17,283.

The trial court did not abuse its discretion by finding that Husband breached his 

fiduciary duty by failing to disclose the money received in repayment of the loan as part 

of his February 2009 preliminary disclosure. The income and expense declaration 

 

5

Ecopeds was an investment funded by Husband during the marriage and postseparation with community funds.
16

provides a line for “one-time money,” including “lottery winnings, inheritance, etc.,” and 

the schedule of assets and debts asks for “accounts receivable and unsecured notes.” The 

money received could have been acknowledged in either place. 

We conclude, however, that Husband’s failure to account for the $148,750 

repayment is not a fiduciary breach under section 1101 because it did not impair Wife’s 

community interest as of February 2009. That money had been invested in Ecopeds and 

there was no impairment to that investment (which was disclosed as an asset) by failing 

to report the $148,750 repayment. Wife’s interest in the community also was not 

impaired by the failure to report the $30,000 deposit. To the extent any of those funds 

constituted an asset to be disclosed in the dissolution proceedings, they were part of the 

brokerage account which community portion was already subject to the subdivision (g) 

remedy. Thus, the trial court abused its discretion by finding a breach under section 1101 

as to the loan repayments.

Further, the balance of the loan—$21,250—constituted an asset that should have 

been disclosed on the preliminary disclosure’s schedule of assets and debts under line 

item 14, accounts receivable and unsecured notes.6 Husband’s failure to account for that 

asset was a breach of his disclosure duty, entitling Wife to half the asset under 

subdivision (g). The court characterized the $21,250 money owed as a community asset 

in a separate part of the statement of decision, and imposed a continuing obligation on 

Husband to disclose any reimbursement of those funds. For the reasons stated in part 

II.C.2, Wife is not entitled to a double recovery of her half of this asset. The subdivision 

(g) award satisfies her interest in full, relieving Husband from an obligation to disclose 

any future receipt of funds.

 

6 Wife argues that the loan should have been listed on the Schedule of Assets and 

Debts as a debt under line item 22: Loans—Unsecured. But Husband did not borrow 

money that would constitute a debt. He gave money to a third party. To the extent that 

money was a loan or investment (not a gift), it would constitute an asset, not a debt. 
17

d. Undisclosed post-separation car purchase

Husband argues that the trial court erred by granting Wife 50 percent of the value 

of a Mercedes Benz he purchased post-separation but did not formally disclose until 

November 2011, because Wife also purchased a vehicle post-separation that she did not 

formally disclose until November 2011. Husband contends that the court erred by 

distinguishing the transactions and finding that he breached a fiduciary duty but that Wife 

did not, since the facts regarding disclosure of the two transactions are substantially the 

same. 

We find no abuse of discretion. Husband purchased his car in March 2009, one 

month after separation, and he omitted the car from his May 2009 and June 2011 

schedules of assets and debts. In contrast, Wife, who purchased her car in 2010, did not 

omit her acquisition from any formal disclosure, and she acknowledged the acquisition 

formally when she updated her schedule of assets and debts in November 2011. 

Although there was conflicting evidence presented at trial about whether each party was 

aware of the other party’s purchase before formal disclosures were made in November 

2011, the court based its finding with respect to Husband’s breach on the fact that Wife 

“reported the transaction on her next financial disclosure document whereas [Husband] 

filed two financial disclosures subsequent to the vehicle purchase which did not report 

the activity and it was not formally disclosed until over two and one-half years later.”

The court was within its discretion to distinguish the transactions based on Husband’s 

affirmative omissions from the written disclosures and the length of delay in formally 

disclosing the purchase. 

2. Duplicative Awards

Husband argues that the court erred by making duplicative awards to Wife for half 

the proceeds of two community property assets. Husband sold a Porsche after separation, 

and he failed to disclose the $18,000 proceeds from that sale. The court awarded Wife 50 

percent of the sale proceeds under subdivision (g) for that fiduciary breach. Wife also 
18

received half of the sale proceeds in the court’s division of community property. The 

court awarded Wife 100 percent of side business income ($58,650) received by Husband

post-separation under subdivision (h), in addition to awarding her half of that asset as part 

of the property division. 

Husband argues that Wife is not entitled to a duplicative award of her community 

share of the Porsche proceeds ($9,000) and the side business income ($29,325) because 

that would violate the prohibition against double recovery of the same one-half 

community property interest. Husband cites Simmons, where the court explained: “[A]

fundamental principle of family law, including during dissolution proceedings, is that 

each spouse has a one-half interest in community property. (§ 2550.) The fiduciary duty 

with respect to marital property is designed, among other things, to preserve that one-half 

interest. (§ 1101, subd. (a).) Through the enactment of [subdivision (h)’s 100 percent] 

value of the asset remedy, the Legislature has in effect altered the one-half interest 

community property formula in the event a spouse violates his or her duty to preserve the 

other spouse’s one-half right to the property, by awarding the aggrieved spouse more than 

his or her one-half interest.” (Simmons, supra, 215 Cal.App.4th at pp. 593–594, original 

italics.) In Wife’s view, the sanction is mandatory and unrelated to the division of 

property.

Wife argues that Husband has waived this argument by agreeing to the division of 

community property outlined in a joint exhibit, and by not disputing that division when 

the court issued its Order and Accounting. But Husband is not disputing that division, he 

is disputing what he considers to be duplicative awards of the same community assets 

under section 1101, which were not apparent from the proposed or final statements of 

decision. During argument on the proposed statement of decision, when discussing the 

$58,000 side business income received post-separation, Husband pressed that the court 

had to take into account his 50 percent share of that asset when imposing a penalty under 

subdivision (h). Wife appeared to agree. When asked by the court how it should deal 
19

with each party’s 50 percent share of a community asset when awarding 100 percent of 

the asset for fiduciary breaches, Wife explained: “It’s a penalty, so his half is being 

forfeited as a result of his behavior. I believe that’s very specifically stated in 1101.” 

Wife did not characterize the penalty as a $58,000 award in addition to her $29,000 

community share of the asset. Husband’s position was further acknowledged by Wife at 

an April 2013 hearing addressing the proposed order and accounting she had prepared, 

when Wife stated that Husband’s “double dipping” argument had been heard throughout 

the trial. 

Subdivision (g) directs the trial court to award the claimant spouse “50 percent, or 

an amount equal to 50 percent, of any asset undisclosed or transferred in breach of the 

fiduciary duty[.]” Subdivision (h) uses identical language, except it provides for a 

100 percent award instead of 50 percent. We must decide whether an award under those 

subdivisions necessarily encompasses the prevailing spouse’s interest in a community 

asset upon dissolution, or whether the award is in addition to that interest. Statutory 

language is to be given plain and commonsense meaning consistent with the apparent 

intention of the lawmakers. (Coalition of Concerned Communities, Inc. v City of Los 

Angeles (2004) 34 Cal.4th 733, 737.) Where a statute is subject to two or more 

reasonable interpretations, the interpretation which will harmonize rather than conflict 

with other provisions should be adopted. (People v. Kuhn (1963) 216 Cal.App.2d 695, 

698.)

Wife argues Husband’s fiduciary breaches “justify[] an award of sanctions 

equivalent to 50% of the asset’s value under Section 1101(g).” But subdivision (g) does 

not provide for “a sanction equivalent to” half the asset’s value. Subdivision (g) provides 

that a prevailing spouse may be awarded as a remedy “an amount equal to 50 percent of 

the asset,” as an alternative to an award of 50 percent of the asset itself. The claimant 

and breaching spouses’ collective interest in a community asset cannot exceed 100 

percent. Given that the fiduciary duty recognized under section 1101 is a duty intended 
20

to preserve each spouse’s one-half interest in the community estate (Simmons, supra, 

215 Cal.App.4th at p. 593; see also CA Family Law Practice Guide, § 24.16[1] 

[section 1101 remedies “are essentially disgorgement of profits and reclamation of 

property placed beyond the reach of the harmed spouse”]), the 50 percent interest 

awarded under subdivision (g) must be the same 50 percent interest that would be 

awarded in the overall division of community assets. After a claimant is awarded his or 

her interest in an asset under subdivision (g), there is no longer an asset to divide in the 

dissolution proceedings. Likewise, under subdivision (h) the claimant spouse is entitled 

to 100 percent of an asset—his or her 50 percent share plus the breaching spouse’s onehalf interest in the asset. The claimant spouse does not receive an additional 50 percent 

share of the asset in the division of property because he or she has already been awarded 

the asset in its entirety under subdivision (h). 

The alternative “amount equal to” remedy under subdivision (g) should be 

interpreted to achieve the same result as an award of one half the asset itself. Thus, if the 

claimant spouse obtains an award equal to 50 percent of an undisclosed asset (as with the 

proceeds from the Porsche sale here), then the claimant spouse would necessarily 

abandon the community interest in the asset, as subdivision (g) clearly provides that the 

claimant spouse either receive his or her 50 percent interest in the asset or an amount 

equal to that interest, but not both. Under that scenario, the breaching spouse would 

retain the asset as separate property, the claimant spouse would receive an award 

equivalent to his or her community interest in the asset, and there would be no 

community asset to divide upon dissolution. 

If we were to interpret subdivision (g) as providing for an award equivalent to 

50 percent of the asset, while at the same time allowing the claimant spouse to assert an 

independent community interest in the same asset, as Wife urges, then the remedy would 

have a different result depending on whether the breaching party transferred a community 

asset or failed to disclose the asset. If the asset were transferred (as opposed to
21

undisclosed), the claimant spouse would be awarded an amount equal to the community 

interest in the asset, but if the asset were hidden, then the claimant spouse could be 

awarded the value of that asset while retaining his or her community interest in it. In our 

view, the Legislature did not intend these disparate results. 

To summarize, the court erred as a matter of law finding breaches of fiduciary 

duty under section 1101 and applying subdivisions (g) and (h) remedies totaling 

$327,357 for Husband’s disclosure violations involving separate property ($57,982

[$66,882 minus $8,900] for the brokerage accounts and $15,000 for the vintage Corvette

sale, for community income dissipated before separation ($165,000), and for loan 

repayments received pre-separation ($89,375). The court also erred by awarding Wife

her community interest in the proceeds of the Porsche sale ($9,000), post-separation side

business earnings ($29,325), and the remaining money owed on the loan ($10,625)

twice—once as a section 1101 remedy for Husband’s fiduciary breach and again in the 

division of community property. 

3. Permanent Spousal Support

Husband argues that the trial court erred by awarding Wife permanent spousal 

support in an amount he has no ability to pay. Family Code section 4320 sets forth the 

factors that must be considered in a spousal support award, including “[t]he ability of the 

supporting party to pay spousal support, taking into account the supporting party’s 

earning capacity, earned and unearned income, assets, and standard of living.” (Id., 

subd. (c).)7 The trial court has broad discretion balancing and determining the 

appropriate weight to be given to each factor, “ ‘with the goal of accomplishing 

 

7

Section 4320 also requires the trial court to consider these relevant factors: each 

party’s earning capacity and ability to work, each party’s obligations and assets, each 

party’s needs based on the standard of living established during the marriage, any 

immediate and specific tax consequences, the duration of the marriage, the parties’ ages 

and health, a balancing of hardships, and “any other factors the court determines are just 

and equitable.” (§ 4320, subds. (a), (d), (e), (f), (h), (j), (k), (n).)
22

substantial justice for the parties in the case before it.’ ” (In re Marriage of Cheriton, 

supra, 92 Cal.App.4th at p. 304.) 

a. The trial court’s findings

Regarding Husband’s earning capacity, the trial court found that Husband has

shown “entrepreneurial talent (ironically, through operation of the ‘side businesses’ 

which ultimately resulted in his termination from [the semiconductor company] such that 

he could pursue self-employment,” and he “has industry contacts and is knowledgeable 

about starting a business.” The court found that Husband’s “skills and experience 

demonstrate that he has the ability to be gainfully employed in the future,” that Husband 

“could sustain a living through self-employment,” and there was no “significant 

impediment to [Husband’s] ability to pursue self-employment opportunities[.]” 

The court found that Husband will receive income from investments and assets. 

The court noted the all-purpose family court judge’s earlier finding that Husband was not 

investing in good faith but was attempting to avoid additional support obligations. The 

court found that Husband favored dealing in cash, and it had “obvious concerns about the 

accuracy of [Husband’s] financial accounting and the ability to accurately trace/identify 

his assets in order to make a reasoned determination of his ability to pay support.” It 

found that Husband had access without penalty to nearly $300,000 in retirement funds

and $192,291 in bank and brokerage accounts. It found a 3 percent rate of return 

reasonable to impute to those assets, and noted that reasonable withdrawals from 

retirement accounts may also be imputed as income when a party reaches age 591⁄2. The 

court valued the Lemon Cove property at approximately $700,000, it identified 

Husband’s $360,000 separate interest in the Exeter property, and it imputed income to 

those assets.

The trial court imputed $35,000 in annual income to Wife beginning September 1, 

2013. It ordered Husband to pay Wife $6,000 in monthly spousal support from 
23

December 2012 to August 2013, and it reduced the monthly award to $2,600 beginning 

September 2013 based on Wife’s imputed income.

b. Analysis

Husband argues that the trial court did not undertake a calculation of his imputed 

income available for support, and that had it done so it would have found he lacked the 

ability to pay support. Specifically, Husband argues that the $192,291 bank and 

brokerage accounts figure was wrong, and that the parties’ experts had agreed the correct 

amount was $60,000. He further argues that the court failed to offset Husband’s incomeproducing assets with Wife’s income-producing assets. Husband calculates his incomeproducing assets at $1,464,020 and Wife’s at $987,871 ($826,789 under the judgment 

plus $161,082 in prejudgment assets). Thus, according to Husband, the difference of 

$476,149 is the figure the trial court should have used to calculate his support obligation. 

Imputing a 3 percent rate of return on $1,464, 020 would yield $3,660 in monthly income 

and 3 percent of $476,149 would yield a monthly income of $1,190. Using either figure, 

Husband argues he cannot pay support given that his monthly expenses are $8,773,

8

and 

he should not be required to invade investment principal to satisfy support obligations.

i. Husband’s ability to pay

As a preliminary matter, the record does not support Husband’s assertion that the 

experts agreed that Husband’s bank and brokerage accounts had dissipated to $60,000. 

The trial court relied on an exhibit prepared by Wife’s expert, showing a balance of 

$192,291, a figure that was largely consistent with the account balances Husband 

provided on his November 2011 assets schedule. The court was not required to accept 

the testimony by Husband’s expert that Husband had told him that $60,000 remained in 

those accounts. 

 

8

That figure is taken from Husband’s January 2012 income and expense 

declaration, which includes $2,915 for “auto expenses and transportation,” a 401K 

contribution of $406, and $592 for “health club, horses, accounting.” 
24

As Husband’s own calculation shows, the rate of return on his assets amounted to 

$3,660 per month, which more than covers the $2,600 monthly obligation. But the court 

based its finding on more than the income that could be imputed to Husband’s assets. In 

addition to Husband’s known assets, the court noted Husband’s demonstrable work 

history that provided for the parties’ “high standard of living” during the marriage, and 

Husband’s ability to earn a gainful living through self-employment. 

Husband argues that the court failed to consider that he would have to exhaust his 

accounts and sell the Exeter property to pay the judgment exceeding $800,000, and he 

would have to sell the Lemon Cove ranch and be left without a home or assets if, in 

addition, he is required to pay attorney’s fees and sanctions. The trial court did not abuse 

its discretion giving those speculative arguments little weight, particularly considering 

Husband’s professional skills and entrepreneurial abilities, his cash dealings, and his 

shifty handling of assets. Considering Husband’s ability to pay, in addition to the other 

factors under section 4320, on this record it was not an abuse of discretion to award Wife 

nine months’ spousal support at $6,000 and $2,600 per month thereafter. 

We find Husband’s authorities inapposite. In In re Marriage of Rosen (2002) 

105 Cal.App.4th 808, 824, the spousal support award was reversed because the trial court 

used an incorrect income figure for the payor spouse. The court’s numbers in this case 

are supported by the record. In In re Marriage of Lynn (2002) 101 Cal.App.4th 120, 133, 

the husband’s salary did not cover his basic living expenses and the support award. Here, 

the court contemplated that Husband would be able to provide for his living expenses 

through gainful self-employment, and Husband had additional assets from which to draw 

support if necessary. 

In In re Marriage of Reynolds (1998) 63 Cal.App.4th 1373, the trial court denied a 

67-year-old supporting spouse’s motion to terminate support based on that spouse’s 

retirement income and ability to work. The In re Marriage of Reynolds court concluded 

that the trial court had erred by applying a capacity to earn standard instead of 
25

recognizing the supporting spouse’s timely retirement. (Id. at p. 1379.) The appellate 

court further observed that investment principal should not be available to pay spousal 

support, especially where the principal is comprised of the supporting spouse’s share of 

community retirement assets divided as part of the marital dissolution. (Id. at p. 1380.) 

But the court also observed that a supporting spouse cannot deliberately shirk support 

obligations by refusing to work or by prematurely retiring. (Id. at p. 1379.) Here, 

Husband had not reached retirement age, the trial court found he had the ability to be 

gainfully employed, and it does not appear to have intended that Husband use investment 

principal to pay spousal support. 

ii. Offsetting Wife’s imputed investment income

The income-generating potential of Wife’s assets is not relevant to Husband’s 

ability to pay support, and the trial court did not abuse its discretion by not imputing 

income to the equalizing payment or the assets awarded to Wife under section 1101. The 

court considered the parties’ assets and debts as required under section 4320, 

subdivision (e). The court found that the “majority of the marital assets are [Husband’s] 

separate property” without encumbrance, that Wife would be “left with minimal personal 

property,” and that “a significant disparity exists between the parties’ access to financial 

resources.” Wife’s November 2011 schedule of assets showed about $10,000 in liquid 

assets and $66,000 in debt. There is no showing in the record that the equalizing

payment would be available for investment after Wife settled her debts. The remainder 

of the judgment constituted a penalty award to Wife, and Husband cites no authority 

requiring the trial court to offset spousal support with income imputed to a penalty 

attributable to the supporting spouse’s wrongful conduct. 

Husband’s authorities are distinguishable. In In re Marriage of Ackerman (2006) 

146 Cal.App.4th 191, 211, the court found no abuse of discretion in the trial court’s 

imputing income to the supported spouse’s share of the community assets after 

considering the supported spouse’s need to buy a house. In In re Marriage of Martin
26

(1991) 229 Cal.App.3d 1196, 1201, the court upheld a spousal support order against the 

supporting spouse’s sufficiency of the evidence challenge. Similar to In re Marriage of 

Ackerman, the trial court in In re Marriage of Martin had imputed income to the buy-out 

received by the supported spouse in exchange for the supporting spouse’s retention of the 

community assets, after considering the supported spouse’s stated goal of purchasing a 

home. (Id. at p. 1199.) Neither case holds that the trial court must consider imputed 

income from an equalizing payment, and in any event the instant case is distinguishable 

because the court here did not determine that Wife would have income generating assets 

after paying her debts. In In re Marriage of Schmir (2005) 134 Cal.App.4th 43, 52–53, 

the court upheld an order terminating spousal support where the supported spouse had 

reached retirement age and was able to take distributions from her IRA without penalty. 

Here, Wife has no retirement assets to draw from. 

D. CHALLENGES TO SECOND STATEMENT OF DECISION

Husband argues that the trial court erred by refusing to consider his current ability 

to pay any attorney’s fees to Wife as of the hearing, by awarding Wife fees exceeding 1.5 

times the fees Husband paid his attorneys, and by awarding Wife fees for breach of 

fiduciary duty claims that she failed to prove. We address each argument in turn.

1. The Ability to Pay Determination

Husband argues that the trial court erred by awarding attorney’s fees to Wife

without making an ability to pay determination. According to Husband, the court made 

no findings regarding his ability to pay the attorney’s fees sanctions award or the needbased fee award, and it “failed to consider and apply the critical section 270 standard and 

thereby abused its discretion.” Section 270 requires “a court order[ing] a party to pay 

attorney’s fees or costs under [the Family] code, [to] first determine that the party has or 

is reasonably likely to have the ability to pay.”

9

 

9

The parties dispute whether the section 270’s ability to pay requirement applies 

to an award of attorney’s fees as a sanction under section 1101, subdivision (g). We do 
27

The phase two statement of decision noted the attorney’s fees issues were 

challenging “due to multiple circumstances, including the extensive nature of the 

litigation at both the pre-trial and trial stages; the overall contentious nature of the 

litigation which was not conducive to keeping down the cost of attorneys’ fees; an 

unsuccessful interim appeal by Wife that drew criticism from the Court of Appeal 

regarding attorneys’ fees accrued up to that time; Husband’s repeated concealment of 

assets; the parties’ inability to reach accord on a multiplicity of issues throughout the 

course of litigation of the case; the sizeable amount (an understatement) of attorneys’ 

fees/costs claimed to have been incurred by the parties—particularly Wife 

($1,543,352.11); and the apparent lack of monetary resources available to either party to 

pay the overall amount of attorneys’ fees requested by the parties.” In specifically 

addressing the need-based fee award under section 2030, the court noted the finding 

made in the first statement of decision and the earlier long-cause order showing a 

significant financial disparity between the parties. The decision continued, “That being 

said, however, the amount of attorneys’ fees/costs requested by Wife ($1,543,352.11) is 

not consonant with Husband’s financial capacity—particularly in light of the amount of 

attorneys’ fees awarded pursuant to Sections 1101 and 2107.” The specific reference to 

Husband’s financial capacity in the statement of decision reflects the trial court’s 

consideration of Husband’s ability to pay. 

The record contains substantial consideration of Husband’s ability to pay. The 

issue was thoroughly addressed in the parties’ two sets of briefing on the issue, and 

discussed during argument. At the May 2013 hearing, Wife acknowledged that any 

payments made in satisfaction of the April 2013 order would impact Husband’s ability to 

 

not reach that issue because the trial court’s ability to pay determination implicitly 

encompassed the sanctions award. By determining that Husband had the ability to pay a 

portion of Wife’s attorney’s fees under section 2030 after it had awarded Wife attorney’s 

fees under sections 1101 and 2107, the court necessarily determined that Husband had, or 

was reasonably likely to have, the ability to pay the sanctions award.
28

pay, but pressed that Husband still had $1.3 million remaining. Husband argued that he 

“has no income. He has unemployment insurance or disability, and that’s it. He has no 

earning capacity.” He also argued that as of September 2013 Wife had an earning 

capacity of $3,000 per month, but his was limited to $1,600 in unemployment 

compensation. The court recognized that the valuation of farm equipment (a post-trial 

matter then pending before the all-purpose judge) “could bear on the Court’s 

determination as to ability to pay based upon valuation of the property, but the Court has 

already addressed valuation of a number of items of property,” so the farm equipment 

valuation would not bear directly on its attorney’s fees determination. It acknowledged 

in its phase two tentative decision that any sanctions award would be relevant to the 

parties’ financial circumstances for purposes of determining a section 2030 fee award. 

Husband contends that the court considered outdated information. But the court 

was aware that Husband had been terminated from employment at the end of 2011, and 

that he had transferred the Exeter property and the proceeds of an IRA account to Wife in 

partial satisfaction of the April 2013 accounting order. Although the court ruled at the 

May 2013 hearing that “new submissions attached to the arguments on attorney’s fees 

and costs are not going to be considered by the Court,” Husband did not object to that 

ruling. Thus, to the extent the trial court did not consider Husband’s and Wife’s April 

2013 income and expense declarations attached to his briefing, Husband has forfeited his 

right to challenge that ruling on appeal. (In re S.B. (2004) 32 Cal.4th 1287, 1293.) 

Husband also does not show how those declarations would have made a difference given 

that Husband’s declaration showed a decrease in monthly expenses from $8,773 in 

January 2012 to $3,471 in April 2013, and Wife’s declaration showed $188 in average 

monthly income, far less than the $35,000 annual income imputed to her in the first 

statement of decision. 

In his November 2013 supplemental briefing, Husband provided the court with a 

chart comparing his financial positions in November 2011 and July 2013. The chart 
29

showed nearly $460,000 in depleted assets independent from the assets transferred to 

Wife to satisfy the April 2013 order. Wife requested that the court “strike or disregard 

any and all post-trial alleged facts or assertions made without evidentiary citations,” 

including “information in the pleadings, none of which is verified, none of which is under 

penalty of perjury[.]” The court responded that it “would certainly not be inclined to 

consider matters that are outside the evidentiary record,” and Husband did not object to 

that ruling or offer testimony or seek leave to file a verified declaration.

The trial court was within its discretion to find that Husband had the financial 

capacity to pay the attorney’s fees award. The record shows Husband has the ability to 

earn a living through self-employment. Further, it shows Husband, who had repeatedly 

concealed assets and liked to deal in cash, holding over $2.1 million in assets at trial. 

Although Husband claimed a changed financial condition following the trial, the trial 

court did not abuse its discretion to the extent it rejected Husband’s unsubstantiated 

showing of diminished assets. Considering the undisputed transfer of assets to Wife to 

satisfy the April 2013 order, the record shows Husband was reasonably likely to have the 

ability to pay Wife $318,510 as a sanction and an additional $307,48510 in need-based 

fees. 

2. The Section 2030 Need-Based Fee Award 

Husband argues that the trial court’s need-based attorney’s fees award was an 

abuse of discretion because, when added to the sanctions award, it resulted in him paying 

Wife 1.5 times ($730,995) the fees that he incurred ($480,558). Husband argues that the 

purpose of a section 2030 fee award is to ensure parity in the parties’ legal representation, 

and an award of over 1.5 times the amount he paid his attorneys exceeded that parity and 

constituted an abuse of discretion, particularly in light of the $2.2 million marital estate. 

He also argues that the court based its finding that the parties had “a disparity in access to 

 

10 This figure assumes past payments to Wife totaling $105,000 for need-based 

attorney’s fees ordered in 2009 and 2010. 
30

funds” under section 2030 on stale information, and that the court did not consider 

Husband’s ability to pay for the legal representation of both parties.

We reject Husband’s arguments. The court found that Wife’s $318,510 sanctions 

request was “based on attorney time/efforts associated with discovery, factual 

investigations, pleadings, and pre-trial and trial efforts relative to proving Husband’s 

breach of fiduciary duty,” that the “time/effort that [Wife] attributes to investigating and 

proving violations of fiduciary duty appear to be reasonable—especially in light of the 

fact that Husband’s violations of fiduciary duty were a dominant part of Wife’s case,” 

and that she was entitled to the award “[g]iven Husband’s numerous and broad-ranging 

violations of his fiduciary duty towards Wife[.]” Thus, the $318,510 sanctions award 

was attributable entirely to Husband’s wrongful conduct. The need-based $412,485 

award was based on the evidentiary record which showed a significant disparity in the 

parties’ respective income earning capacities, and the recognition that neither party had 

the ability to pay the overall amount of attorney’s fees requested by the parties. 

“[T]he proper legal standard for determining a [need-based] attorney fee award 

requires the trial court to determine how to apportion the cost of the proceedings 

equitably between the parties under their relative circumstances.” (In re Marriage of 

Falcone and Fyke (2012) 203 Cal.App.4th 964, 975.) Section 2032, subdivision (b) 

states that “[f]inancial resources are only one factor for the court to consider in 

determining how to apportion the overall costs of the litigation equitably between the 

parties under their relative circumstances.” We will not reverse a need-based award 

“absent a showing that no judge could reasonably have made the order, considering all of 

the evidence viewed most favorably in support of the order.” (In re Marriage of Falcone 

and Fyke, supra, at p. 975.) 

After reviewing Wife’s attorneys’ billing records, the court awarded Wife less 

than 30 percent of her requested $1.5 million fee award, a reduction reflecting a 

reasonable exercise of discretion. The record shows Husband serving Wife with the 
31

dissolution petition, deficient disclosures, and a $75,000 marital settlement agreement in 

February 2009, telling her “it could get very ugly” if she did not sign the agreement.

Husband also warned Wife that he would not settle until she “got rid of” her attorneys 

and that he would “litigate this case until there is nothing – money or assets – left to be 

divided.” Not surprisingly, Wife’s attorneys acted aggressively to protect her interests, 

and it did get ugly. Had Husband been forthright with Wife when he initiated the 

dissolution, he could have avoided this expensive and burdensome proceeding for the 

parties and the courts. Husband’s exposure under section 2030 is not limited by the total 

amount of attorney’s fees he incurred. Parity here is reflected by Wife’s retention of 

competent counsel. Considering the equities in this case, it was not an abuse of 

discretion to award Wife attorney’s fees under section 2030 that resulted in Husband 

having to pay Wife 1.5 times the attorney’s fees he paid his own counsel.

3. The Section 1101/2107 Sanctions Award

Husband argues that Wife is not entitled to recover attorney’s fees for the 

disclosure violations that did not amount to fiduciary breaches. We agree with Husband 

that Wife is not entitled to a mandatory fee award under section 1101, subdivision (g) for 

the fiduciary breaches involving non-disclosure of Husband’s separate property and 

certain community assets that had dissipated before separation since we have determined 

that those violations did not impair Wife’s interest in the community estate under 

section 1101, subdivision (a). Although those violations cannot support an attorney’s 

fees award under section 1101, subdivision (g), they are independently sanctionable 

under section 2107, as Husband acknowledges. Husband persists, however, that Wife is 

not entitled to fees under section 2107 because “[a] section 2107(c) fee award must be in 

‘an amount sufficient to deter repetition of the conduct or comparable conduct’ ” and, 

because the “case is over” so “it is too late for a section 2107(c) fee award to serve the 

statutory purpose.” Husband cites no authority precluding a sanctions award from 
32

issuing at the conclusion of trial, and we do not read the statute as limiting sanctions to 

circumstances in which disclosure obligations still remain.

Section 2107, subdivision (c) provides: “If a party fails to comply with any 

provision of this chapter, the court shall, in addition to any other remedy provided by law, 

impose money sanctions against the noncomplying party. Sanctions shall be in an 

amount sufficient to deter repetition of the conduct or comparable conduct, and shall 

include reasonable attorney’s fees, costs incurred, or both, unless the court finds that the 

noncomplying party acted with substantial justification or that other circumstances make 

the imposition of the sanction unjust.” Accordingly, Wife is entitled to mandatory 

sanctions under section 2107, subdivision (c), including an award of reasonable 

attorney’s fees, for Husband’s failure to comply with the disclosure requirements, 

regardless of whether those violations amounted to breaches of fiduciary duty under 

section 1101. 

The trial court found in Wife’s favor on 12 of her 16 breach of fiduciary duty 

claims, and it awarded Wife $318,510 in attorney’s fees and $5,737.50 in costs based on 

proving those breaches. In light of our reversal (at least in part) of four of the trial court’s 

findings, we will remand to the trial court to reexamine those amounts under section 

1101, subdivision (g), and section 2107, subdivision (c), in the exercise of its discretion. 

We express no opinion as to whether any amount should be modified.

III. DISPOSITION

The May 2013 dissolution judgment is reversed and remanded for the trial court to 

reduce by $327,357 Wife’s section 1101 award for Husband’s fiduciary duty breaches, 

and to reduce the property division equalizing payment owed to Wife by $48,950.

The May 2014 attorney’s fees judgment is reversed, and the matter is remanded 

for the trial court to reexamine the amounts awarded to Wife under section 1101, 

subdivision (g), and under section 2107, subdivision (c), in light of our determinations 

regarding the May 2013 judgment.
33

Husband is awarded costs for the appeal from the May 2013 judgment. Wife is 

awarded costs for the appeal from the May 2014 judgment.

____________________________________

Grover, J.

WE CONCUR:

____________________________

Rushing, P.J. 

____________________________

Elia, J. 
Trial Court: Santa Clara County Superior Court

Superior Court No. 6-09-FL-001572 

Trial Judge: Hon. Theodore C. Zayner (lead of three

judges)

Counsel for Appellant 

Charles Schleich:

Russell James Hanlon

Law Offices of Russell J. Hanlon

Counsel for Respondent 

Lori Holek:

Taline Kizirian Boyamian

Boyamian Law, Inc. 

In re the Marriage of Charles and Lori Schleich / Schleich v Holek 

H039870 and H041234