Court Opinion

ID: 6351763
Source: CourtListenerOpinion
Date Created: 2022-06-21 18:02:39.278598+00
Date Added: 2024-06-11T12:49:11.949022
License: Public Domain

Filed 6/21/22 Marriage of Shega CA4/1
                 NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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or ordered published for purposes of rule 8.1115.

                COURT OF APPEAL, FOURTH APPELLATE DISTRICT

                                                 DIVISION ONE

                                         STATE OF CALIFORNIA

In re the Marriage of MELINDA and
JOHN F. SHEGA.
                                                                D079129
MELINDA SHEGA,

         Appellant,                                             (Super. Ct. No. 18FL010929C)

         v.

JOHN F. SHEGA,

         Respondent.

         APPEAL from an order of the Superior Court of San Diego County,
William J. Howatt, Jr., Temporary Judge. (Pursuant to Cal. Const., art. VI,
§ 21.) Affirmed.
         Westover Law Group and Andrew L. Westover for Appellant.
         Linda Cianciolo for Respondent.

                                               INTRODUCTION
         Melinda Shega (Wife) appeals from an order denying her request for
attorney fees and costs in an action to enforce an order for spousal support
against John Shega (Husband) pursuant to Family Code section 3557.1 Wife
asserts the trial court abused its discretion by erroneously adding a
requirement of need to determining an award of attorney fees under section
3557. We see no error in the trial court’s analysis and affirm the trial court’s
order.
                 FACTUAL AND PROCEDURAL BACKGROUND
         After 35 years of marriage, Husband and Wife separated in 2018. Wife
then filed for divorce. They agreed to use a privately compensated temporary
judge for the divorce proceedings. In March 2019, the trial court entered a
stipulation and order appointing retired Judge William Howatt, Jr. as a
temporary judge pursuant to article VI, section 21 of the California State
Constitution and California Rules of Court, rule 2.831. The stipulation and
order of appointment granted Judge Howatt authority to “exercise all powers
and duties of a San Diego Superior Court Judge.” The parties expressly
agreed to pay the fees for the court reporter and the temporary judge “from a
community source.” At the time of separation, Husband and Wife had
substantial assets, including several real properties, some of which they used
as income-generating rental properties.
         In October 2019, Judge Howatt ordered Husband to pay spousal
support to Wife in the monthly amount of $12,500. In January 2020,
Husband advised Wife, through their respective attorneys, that he would be
paying the monthly spousal support from his 401(k) account, with the issue of
allocation reserved for trial. According to Husband, both his and Wife’s
401(k) accounts were managed by BNY Melon at that time. Husband then
transferred his portion of the 401(k) accounts to Fidelity Investments (the

1        All further unspecified statutory references are to the Family Code.

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401(k) account). He notified Wife’s attorney the checks would come from the
401(k) account starting in April 2020. That same month, Wife filed a “Notice
of Adverse Interest” with Fidelity Investments regarding the 401(k) account.
As a result, Fidelity Investments froze the 401(k) account and stopped
payment on a spousal support check that had been issued to Wife in April.
     On May 15, 2020, Wife’s attorney sent Husband a letter asserting he
was in arrears on spousal support. In response, Husband’s attorney
reiterated that Husband intended to make spousal support payments
through the now frozen 401(k) account, and “proposed a stipulation to resolve
the matter.” On June 5, 2020, Wife filed a Request for Order (RFO) seeking
to authorize payment of the arrears and ongoing spousal support from the
401(k) account. Three days later, Husband proposed a stipulation for
payment of arrears and ongoing spousal support from the 401(k) account, and
a loan of “up to $100,000” to Husband for his monthly expenses, including
attorney fees and business expenses. Wife countered with a stipulation that
excluded the loan to Husband.
     Unable to resolve the matter informally, the parties went to a hearing
on Wife’s RFO on July 1, 2020. Judge Howatt granted Wife’s RFO and
ordered payment of arrears be made from the 401(k) account. Wife received a
check for the arrears, totaling $60,000, in October 2020. Judge Howatt also
issued a Qualified Domestic Relations Order (QDRO) to allow Husband to
pay further spousal support from the 401(k) account. But, according to
Husband, Wife’s attorney erred in drafting the QDRO and caused a delay in
payments for July and August.
     In September 2020, Wife filed an Order to Show Cause and Affidavit of
Contempt, alleging Husband was in contempt of court for failure to pay five
months of spousal support. Husband filed an RFO seeking to withdraw

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$200,000 from the 401(k) account to cover monthly expenses on November 16,
2020, but he asserts he withdrew his RFO after he was served with notice of

the contempt proceeding.2
      On March 4, 2021, Husband appeared for arraignment on the contempt
allegations before Judge Jose Castillo, the presiding family law judge. The
family court denied Husband’s request to dismiss the contempt proceedings.
He was arraigned on the contempt allegations and a one-day trial was set for
April 23, 2021.
      That same day, on March 4, 2021, the family court took up the matter
of Husband’s RFO regarding, among other items, “Release of Freeze on
Fidelity Account and Payment to Mr. Mitchell [Husband’s asset manager at
Fidelity Investments].” The court ordered that Mitchell be paid for his
services. As reflected in the minute order, the court also ordered a
distribution of $800,000 from “Fidelity to be divided 1/2 to each party,” with
reservation of allocation. Payment was ordered to be made “directly” to the
parties and Husband was ordered “to give [Wife] 400,000.”
      Against this backdrop, on March 1, 2021, Wife filed an RFO seeking
$22,540 in attorney fees and $2,391 in costs incurred to enforce the spousal
support order. In a supporting declaration, Wife’s attorney specified, “[t]his
fee request is limited . . . to relief pursuant to Family Code Section 3557

only.”3

2     This RFO is not in the record on appeal. Although Husband asserts he
withdrew the RFO, it appears the court considered the RFO on March 4,
2021, as we discuss next.

3    Section 3557 provides that in an action to enforce an existing order for
spousal support, “absent good cause to the contrary, the court, in order to
ensure that each party has access to legal representation to preserve each

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      Husband opposed Wife’s RFO on two grounds. In his responsive
declaration, he first asserted they “each have equal access to funds after the
[c]ourt ordered a distribution of $400,000” on March 4, 2021. Second,
Husband asserted “[t]he fees requested were unnecessary” because Wife
could have avoided the underlying litigation by signing the stipulation he
proposed in June 2020 to allow him to pay the spousal support from the
401(k) account.
      Husband and Wife each filed an income and expense declaration (IED).
Wife reported she received approximately $3,600 of monthly income,
consisting of social security retirement and unemployment compensation;
$12,735 in cash and checking accounts; approximately $17,597 in another
checking account which she indicated was reserved for her daughter’s
wedding; and approximately $15 million of assets in real and personal
property. She claimed monthly expenses of $11,631. She further reported
that, as of February 27, 2021, she had paid over $107,000 in attorney fees, of
which $50,000 was paid from “[w]ithdrawals from pension allowed by [the]
court.” Wife owed an additional $8,948 in attorney fees.
      Husband reported on his IED approximately $33,667 in monthly
income, consisting of salary or wages, pension payments, social security
retirement, investment income, and pass-through income as the owner and
sole proprietor of an S corporation. The investment income included
approximately $3,759 in rental income and $7,619 in “[n]on-taxable ad-backs

party’s rights, upon determining (1) an award of attorney’s fees and cost
under this section is appropriate, (2) there is a disparity in access to funds to
retain counsel, and (3) one party is able to pay for legal representation for
both parties, shall award reasonable attorney’s fees to . . . [a] supported
spouse.” (§ 3557.)

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for depreciation.” He also received a one-time payment of $33,605 in April

2020 from the “PPP Stimulus.”4 He reported approximately $5,237,332 in
stocks, bonds and other easily liquidated assets, some of which he asserted
was community property in the parties’ “combined 401(k) accounts,” and
another $7 million in real property. Husband reported monthly expenses of
$57,230. And to date, he stated he has paid $151,171 in attorney fees from
his savings and retirement, and owed an outstanding balance of $22,806.
      Judge Howatt held a hearing on Wife’s RFO on March 24, 2021, at
which neither party testified and the matter was submitted on the pleadings

and argument of counsel.5 The court began by telling the parties it had
“gone through all the papers at least twice.” Wife argued she was entitled to
attorney fees and costs incurred to enforce court-ordered spousal support
under section 3557 and, among other things, Husband had the ability to pay
because he “is about to get $400,000” pursuant to the court-ordered
distribution from the Fidelity Investments account. The court interjected
there would be “an equal amount to [Wife] as well.”
      The court then acknowledged that, based on her IED, Wife had
approximately $3,000 a month from social security income and
unemployment compensation and savings of about $12,000. It then asked:

4      We believe this is a reference to the federal Paycheck Protection
Program (PPP), a Small Business Administration-backed loan to help
businesses keep their workforce employed during the COVID-19 pandemic
crisis. Under the PPP, upon application for forgiveness, the principal and
any accrued interest do not have to be repaid.

5    The parties argued, and the court made orders concerning, other
matters not at issue in the present appeal.

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“Is that enough to get her past the requirement that she has a need for the
payment of -- or the reimbursement for those attorney’s fee expenses and
costs? And that brings to the floor the question that I do have with regard to
[section] 3557 and that is[,] is there a requirement of a determination of need
as there is in every other fee section that must be established in order to
qualify under 3557 award?” After clarifying that Wife has a community
property interest in the jointly owned $15 million of assets, Wife’s counsel
said: “Look, Judge, if you want to find that she has the ability to pay, of
course, she’s going to get $400,000. If that’s the standard, that she doesn’t
have -- and that’s the reason, say so. We can end the discussion.” The court
stated again, “My question is[, is] need a consideration under [section] 3557?”
To which, Wife’s counsel responded: “Of course it is. But there’s many
considerations.”
      Judge Howatt, apparently not agreeing with Wife’s counsel, asked:
“Where does it say that?” The court then looked at section 3557 and said to
Wife’s counsel:
      “[A]s I look at it, [section] 3557 says on determining an award of
      attorney fees and costs under this section is appropriate, so we
      got one thing there that I’ve got to decide. There is a disparity in
      the access to funds to retain counsel, number two. And number
      three, one party is able to pay for legal representation for both
      parties. And the court shall, that’s must, no discretion, award
      reasonable attorney’s fees. . . . Where in that section does it say
      need?”

Wife’s counsel then corrected himself and conceded, “Requirement of need. It
doesn’t.” The court thanked counsel and confirmed, “I’m not required to find
a need.” The court acknowledged it was required only to find that the fees
were appropriate, that there is a disparity in access to funds to retain
counsel, and that the party paying fees had the ability to do so for both

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parties. Wife’s counsel agreed, and confirmed Wife was seeking fees only
under section 3557.
      Husband argued Wife’s request for fees was not appropriate or
reasonable, and, further, there was no disparity in access to funds as both
parties were about to receive $400,000. He asserted he was unable to pay the
spousal support because Wife sent the notice of adverse interest, which froze
the 401(k) account, and then refused to sign the stipulation authorizing the
distribution of funds to her. He asserted the issues could have been resolved
by the parties and litigation could have been avoided. Wife’s counsel
disagreed, and asserted litigation was necessary, in part, because Husband
had included an additional provision authorizing him to borrow funds from
the 401(k) account, which Wife did not agree to, and he then refused to
execute a revised stipulation to omit the loan.
      On April 1, 2021, the court issued a written “Description and Orders
After Hearing.” (Capitalization omitted.) It denied Wife’s request for an
award of attorney fees and costs under section 3557. Wife timely appealed.
                                DISCUSSION
      Wife asserts the trial court’s ruling was based on an erroneous
understanding of the elements of section 3557. She contends the “key issue
for this court to consider is whether an award of attorney fees under [section
3557] requires a ‘demonstration of need.’ ” As we explain, we conclude the
court did not base its decision on a requirement that Wife demonstrate
financial need. Rather, the court appropriately considered the two relevant
statutory factors raised by Husband, that is, whether the request was
appropriate and whether there was a disparity in access to funds.
      We review the trial court’s denial of a request for attorney fees for an
abuse of discretion. (In re Marriage of Sullivan (1984) 37 Cal.3d 762, 768.)

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“A discretionary order that is based on the application of improper criteria or
incorrect legal assumptions is not an exercise of informed discretion, and is
subject to reversal.” (Mark T. v. Jamie Z. (2011) 194 Cal.App.4th 1115,
1125–1126.) Wife, as the appellant, has the burden of establishing such
error. (In re Marriage of Cochran (2001) 87 Cal.App.4th 1050, 1056.) We
begin with the presumptions that the trial court made the requisite findings
on the issue before it and the trial court’s ruling is correct. (Ibid.; Chaffin v.
Frye (1975) 45 Cal.App.3d 39, 45.) We indulge all intendment and
presumptions in favor of correctness, and will not disturb the ruling of the
trial court absent a clear showing of abuse. (In re Marriage of Cochran, at
p. 1056; In re Marriage of Sullivan, at p. 769.) We review any related
questions of statutory interpretation de novo. (Librers v. Black (2005) 129
Cal.App.4th 114, 124.)
      As Judge Howatt correctly noted, there are three statutory
requirements a court must consider when ruling on a request for fees
pursuant to section 3557: (1) whether the award is appropriate; (2) whether
there is a disparity in access to funds to retain counsel between the parties;
and (3) whether one party is able to pay for legal representation for both
parties. (§ 3557.) The purpose of an award under section 3557 is to “ensure
that each party has access to legal representation to preserve each party’s
rights.” (Ibid.)
      It is clear from the record here that the court both understood the
requirements of section 3557 and appropriately exercised its discretion under
the statute to deny Wife’s request. As we have explained, the court went
through the statutory language at the hearing, pointed out the three specific
requirements set forth in the statute, and correctly noted—despite Wife’s
counsel’s mistake to the contrary—that the statute does not make any

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reference to need. Husband’s counsel then presented his arguments
regarding two of the requirements discussed by the court, whether an award
would be appropriate in light of Husband’s continued efforts to resolve the
matter without litigation, and whether there was a disparity in access to
funds to retain counsel.
      The court’s written ruling confirms it understood the requirements of
section 3557, and based its discretionary decision to deny Wife’s request on
the two statutory factors argued by Husband. In the written order, the court
explained:
      “[S]ection 3557 is a unique section which authorizes a supported
      spouse in an action to enforce an existing order for support to
      receive an award of attorney fees and costs. An award of fees
      under this section is appropriate where there is a disparity in
      access to funds to retain counsel and one party has the ability to
      pay the fees for legal representation of both parties. The statute
      further provides that the court ‘shall award reasonable attorney’s
      fees to . . . a supported spouse in an action to enforce an existing
      order for support.’ ”

The court explicitly stated: “[S]ection 3557 does not include a requirement
for need based award of attorney’s fees and costs.” (Italics added.)
      After explaining the statutory requirements, and noting that need was
not one of them, the court turned to the two specific arguments made by
Husband. It stated: “It cannot be overlooked that on March 4, 2021 Judge
Castillo made an order that the Fidelity Account manager was directed to
distribute $400,000 to [Husband] and $400,000 to [Wife]. It is on this basis
that [Husband] argues that there is no reasonable necessity for [an award of]
fees and costs to [Wife] under an application predicated on . . . section 3557.”
The court went on to state it was “also aware of an offer of stipulation from
[Husband] to [Wife] to resolve these issues without the necessity of court
action.” And it noted that Wife’s counsel did not provide a copy of the

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purported counter proposed stipulation, but simply asserted “there was no
agreement and the litigation proceeded.”
      At the conclusion of the order denying Wife’s request, the court
“cautioned” both parties that, based on their IEDs, “substantial attorney’s
fees and costs have been expended by the parties and they are nowhere closer
to a resolution of their divorce. . . . With the distribution of the $400,000 to
each party it may be more difficult for either party to obtain payment of
attorney’s fees and costs from the other party.”
      The court’s explanation of its ruling makes clear that the court based
its decision on two key factors. First, the court concluded the fee request was
not appropriate because the underlying litigation was not necessary in the

first instance.6 Second, the court found there was not a lack of disparity in
access to funds to retain counsel, primarily because the family court had

ordered a distribution of $400,000 to each Husband and Wife.7 (§ 3557,
subd. (a)(2).) Notably, the court did not make any reference to Wife’s overall
financial state or whether she had demonstrated financial need in its

6     Wife asserts section 3557, subdivision (a), was satisfied because
Husband did not contest the amount of fees allegedly incurred. To the
contrary, Husband continually asserted the requested fee award was not
reasonable or appropriate and also asserted, in the alternative, if the court
was inclined to grant an award of attorney fees, it should award less than the
full amount Wife had requested because at least some of the litigation was
not necessary.

7     Citing In re Marriage of Ananeh-Firempong (1990) 219 Cal.App.3d 272,
280−281, Wife contends on appeal she should not be “ ‘required to impair her
capital to finance marital dissolution litigation.’ ” But Wife did not make this
argument in the trial court, nor does she develop it on appeal. We therefore
need not consider it. (See Ochoa v. Pacific Gas & Electric Co. (1998) 61
Cal.App.4th 1480, 1488, fn. 3 [reviewing court need not address arguments
not raised in the trial court or developed on appeal].)

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discussion and consideration of the fee award. It is evident, from the court’s
comments at the hearing and its explanation of its ruling in the written
order, that the court denied Wife’s request based on its consideration of the
relevant statutory factors under section 3557. We find no abuse in the court’s
exercise of its discretion.
      Wife relies on the following isolated quote from the court’s written
decision and asserts the court erroneously added a requirement of need to its
analysis under section 3557: “However, as [Wife’s counsel] rightly points out,
all awards of attorney’s fees in Family Law require a demonstration of need.”
But the court’s statement on that point did not end there. It went on to say:
“As stated in [In re] Marriage of Newport (Fourth Dist., Div. Three, 1984) 154
Cal.App.3d 915: ‘The sole statutory limit on an award of fees and costs is
that they must be “reasonably necessary” for the prosecution or defense of the
proceeding.’ ([Id. at] page 918).” (Italics added.) Taken in its full context, the
court’s reference to a “demonstration of need” was that the fees must be
“ ‘ “reasonably necessary” for the prosecution or defense of the proceeding.’ ”
The first requirement of section 3557 is that the fees requested are
“appropriate.” (§ 3557.) And as we have discussed, the court properly
considered whether the underlying litigation could have been avoided in the
first instance in determining the fees requested were not appropriate.
      Wife further contends the court’s citation to In re Marriage of Newport,
supra, 154 Cal.App.3d 915, confirms the court was referring to a
demonstration of financial need because that case involved a request for fees

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under former Civil Code section 4370, subdivision (a),8 which did require a
demonstration of need. We disagree. The primary issue before the court in
In re Marriage of Newport was whether a former wife could recover attorney
fees and costs under former Civil Code section 4370, subdivision (a), after she
remarried. (Id. at p. 918.) The court concluded remarriage was not a bar to
an award of attorney fees and costs under the former statute, and in that
context stated, “[t]he sole statutory limit on an award of fees and costs is that
they must be ‘reasonably necessary’ for the prosecution or defense of the
proceeding.” (Ibid., italics added.) This is the language that Judge Howatt
quoted in the court’s order in this case, and the quote plainly was not a
reference to general financial need. Rather, the court, in each instance was
pointing out that all fee awards require a determination that the underlying
litigation was “reasonably necessary.” (See §§ 2030, 3557; see also In re
Marriage of Turkanis & Price (2013) 213 Cal.App.4th 332, 356 [“ ‘Financial
resources are only one factor for the court to consider’ . . . [t]he court should
[also] limit an award to fees that were reasonably necessary, including by
taking into account overlitigation.”].) And as the court here cautioned, both
parties had expended “substantial attorney’s fees . . . and they [we]re
nowhere closer to a resolution of their divorce.”

8      Former Civil Code section 4370 included both a more general attorney
fee provision for family law matters, in subdivision (a), and a more specific
attorney fee provision for actions to enforce an existing order for spousal
support, in subdivision (d). (See former Civ. Code, § 4370, subds. (a), (d),
repealed by Stats. 1992, ch. 162, § 3, operative Jan. 1, 1994.) It was repealed
in 1992, and the separate provisions were replaced by separate statutes.
(Ibid.) Current section 2030 is based on former Civil Code section 4370,
subdivision (a), and current section 3557 is based on former Civil Code
section 4370, subdivision (d).

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                                 DISPOSITION
      The order is affirmed. Husband is entitled to his costs on appeal. (Cal.
Rules of Court, rule 8.278(a)(1) & (2).)

                                                                        DO, J.

WE CONCUR:

McCONNELL, P. J.

HUFFMAN, J.

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