Court Opinion

ID: 4026365
Source: CourtListenerOpinion
Date Created: 2016-08-18 19:03:00.472334+00
Date Added: 2024-06-11T12:54:28.552470
License: Public Domain

Filed 8/18/16 Marriage of Zellet CA2/6

                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                   DIVISION SIX

In re Marriage of DONALD and                                                   2d Civil No. B268640
MARILYN ZELLET.                                                              (Super. Ct. No. 1343575)
                                                                              (Santa Barbara County)

DONALD ZELLET,

     Appellant,

v.

MARILYN ZELLET,

     Respondent.

                   Donald Zellet and Marilyn Zellet were married for 35 years.1 After they
separated, Donald received $1,056,000 from a community property investment. Without
Marilyn’s knowledge or approval, he spent most of the money on the parties’ three adult
children and other expenses. The trial court found that Donald had violated the automatic
temporary restraining orders (ATROs) and ordered him to pay Marilyn her half of the
investment, along with her attorney fees and costs. It also rejected his belated request for
spousal support. We affirm.

                   1
               Hereafter, we refer to the parties by their first names to avoid confusion.
No disrespect is intended.
                       FACTS AND PROCEDURAL BACKGROUND
              Donald and Marilyn separated on May 1, 2005. Donald petitioned for
dissolution on May 17, 2010. The summons served with the petition contained the
ATROs, restraining both parties “from transferring, encumbering, hypothecating,
concealing, or in any way disposing of any property, real or personal, whether
community, quasi-community, or separate, without the written consent of the other party
or an order of the court, except in the usual course of business or for the necessities of
                                               2
life . . . .” (Fam. Code, § 2040, subd. (a)(2); see Goold v. Superior Court (2006) 145
Cal. App. 4th 1, 3.)
              During the marriage, Donald invested in an offshore joint venture known as
“Pagoda.” In April 2011, Donald received a distribution of $1,056,000 from the Pagoda
venture. Donald immediately gave Marilyn $110,000 in cash and a car, which had a
value of $25,000. He told her he had not received the full amount and implied that he
was being generous by giving her the $110,000.
              At trial, Marilyn testified that she repeatedly asked Donald, orally and in
writing, for her half of the proceeds in cash. Donald refused, responding instead “I’ll
take care of you’ or ‘don’t be a brat’ or ‘perhaps the b word won’t come up.’” Donald
admitted he was “not too sure exactly when or even if [he] gave her details of how much
money [he] had as it was going along.” He testified, “I know that she knew that there
was a sale and I know she knew the total of what I was going to get . . . and it was there
for her to know.” But when asked when Marilyn learned the details of the Pagoda
transaction, he responded, “You got me. I don’t know.” The trial court found Donald’s
testimony “to be evasive and to lack credibility.”
              Donald conceded that if he had read the ATROs and had not “forgotten
about the divorce” he started, “Marilyn would have gotten half right away.” Instead, he
spent all the remaining Pagoda proceeds on gifts for the parties’ adult children and on
“multiple vehicles, out of country trips, prepayment of rent, losses from ill-advised

              2
                  All further statutory references are to the Family Code.

                                               2
investments and a lavish lifestyle.” Marilyn knew that Donald was spending money, but
testified that what he did with his money was his business and that she did not delve into
the finances of her adult children.
              The issues at trial primarily involved the distribution of the Pagoda
proceeds and spousal support. The trial court found that Donald not only violated the
ATROs, but that he had also breached his fiduciary duties to Marilyn. In so ruling, the
court rejected his claims of equitable estoppel and laches. Among other things, it
determined that “Donald does not have clean hands. Despite being on notice of
Marilyn’s request for her half of the Pagoda money, he failed to communicate with her
about the amount of money and the distributions, including to the parties’ adult children,
a former girlfriend who had loaned him money and purchases of annuities.” The court
ordered that Donald pay Marilyn the sum of $395,500, plus a portion of any future
distributions from the Pagoda venture.
              Donald’s petition for dissolution did not seek spousal support. He
requested it for the first time in his trial brief. Notwithstanding the untimely request, the
trial court weighed the spousal support factors in section 4320 and rejected his claim
based on those factors. It also found that his request was barred by the doctrines of
laches, waiver and estoppel, concluding that “Donald breached his fiduciary duty to
Marilyn by violating the [ATROs]” and “by not disclosing the amount of the [Pagoda]
money to her or giving her an accounting of how it was being spent and failing to give
her the community property share to which she was entitled.”
              The trial court granted Marilyn’s request for $20,113.09 in attorney fees
and $2,527.30 in costs. It found that because Donald had failed to fully and accurately
report income, assets and obligations, he was liable for such fees and costs under section
2107, subdivision (c). Donald appeals.
                                        DISCUSSION
                                      Equitable Estoppel
              Donald contends the trial court committed reversible error by rejecting the
defense of equitable estoppel as a bar to Marilyn’s recovery of half of the Pagoda

                                              3
proceeds. He maintains that her knowledge of the expenditure of those proceeds makes it
“intolerably unfair” for her to claim her share. We disagree.
              “Generally speaking, four elements must be present in order to apply the
doctrine of equitable estoppel: (1) the party to be estopped must be apprised of the facts;
(2) he must intend that his conduct shall be acted upon, or must so act that the party
asserting the estoppel had a right to believe it was so intended; (3) the other party must be
ignorant of the true state of facts; and (4) he must rely upon the conduct to his injury.
[Citations.]” (Driscoll v. City of Los Angeles (1967) 67 Cal. 2d 297, 305.) “Where, as
here, the facts are disputed, we test determinations as to equitable estoppel based on the
substantial evidence standard. [Citation.]” (In re Marriage of Kelkar (2014) 229
Cal. App. 4th 833, 847.) Under that standard, we accept as true all evidence tending to
establish the correctness of the trial court’s findings and resolve every conflict in favor of
the judgment. (Burquet v. Brumbaugh (2014) 223 Cal. App. 4th 1140, 1143.)
              The trial court found that Marilyn was not fully apprised of the facts
concerning Donald’s expenditure of her share of the Pagoda proceeds until two years
after the money was received. Although Donald claims that she knew that various
purchases were being distributed to their children, that knowledge does not establish that
she knew he was spending her money rather than his own. She believed he was spending
his share. Moreover, Donald conceded he was “not sure exactly when or even if [he]
gave her details of how much money [he] had as it was going along.” And when he was
asked if Marilyn knew of the accounting of the proceeds, Donald responded, “You got
me. I don’t know.” The court found Donald “purposefully kept [Marilyn] in the dark by
his own admissions,” and refused to “reward” him for his “deceptive conduct.”
Substantial evidence supports these findings.
                                           Laches
              Donald contends that Marilyn waited too long to assert her claim to the
Pagoda proceeds and, as a result, her claim is barred by the doctrine of laches. He argues
that she purposely waited to assert the claim until after the funds had been spent. As
discussed above, this assertion is not supported by the record. Marilyn was aware that

                                              4
Donald was spending money, but “testified that what he did with his money was his
business and that she doesn’t delve into the finances of her adult children.”
              In any event, a party seeking to assert an equitable defense such as laches
must come into the court with “clean hands.” (13 Witkin, Summary of Cal. Law (10th
ed. 2005) Equity, § 9, p. 289; In re Marriage of Cutler (2000) 79 Cal. App. 4th 460, 479.)
“This maxim is far more than a mere banality. It is a self-imposed ordinance that closes
the doors of a court of equity to one tainted with inequitableness or bad faith relative to
the matter in which he seeks relief . . . .” (Precision Instrument Mfg. Co. v. Automotive
Maintenance Machinery Co. (1945) 324 U.S. 806, 814.)
              Here, the trial court found that “Donald does not have clean hands.” Even
though Donald was on notice of Marilyn’s request for half of the Pagoda proceeds, “he
failed to communicate with her about the amount of money and the distributions,
including to the parties’ adult children, a former girlfriend who had loaned him money
and purposes of annuities, in violation of the [ATROs].” This evidence of wrongdoing
justified rejection of the laches defense.
                                      Spousal Support
              Donald contends the trial court abused its discretion by failing to award him
spousal support and by terminating jurisdiction to award it. (See Marriage of Lim &
Carrasco (2013) 214 Cal. App. 4th 768, 773 [standard of review for spousal support
determinations is abuse of discretion].) Marilyn responds that the trial court properly
found that Donald’s request for spousal support was barred by the doctrine of laches,
waiver and estoppel. Marilyn is correct.
              The doctrine of laches requires ‘“unreasonable delay plus either
acquiescence in the act about which plaintiff complains or prejudice to the defendant
resulting from the delay.’ [Citation.]” (Johnson v. City of Loma Linda (2000) 24 Cal. 4th
61, 69.) The trial court found that “Marilyn did not have notice that Donald was
requesting spousal support for five years until the eve of trial. Had she known, she may
have retained counsel earlier and/or conducted discovery.” This five-year delay and
resulting prejudice to Marilyn substantiate the court’s denial of spousal support.

                                              5
              ‘“Waiver is the intentional relinquishment of a known right after
knowledge of the facts.’ [Citations.]” (City of Ukiah v. Fones (1966) 64 Cal. 2d 104,
107.) When Donald filed his petition for dissolution, he was aware of the right to request
an award of spousal support because he asked the trial court to terminate spousal support
as to Marilyn. He had numerous opportunities to seek an award of spousal support over
the next five years, yet chose not to do so. The court did not abuse its discretion by
determining he had waived his right to seek such support.
              The elements of equitable estoppel also are present. The purpose of the
petition for dissolution is to alert the respondent as to the issues the petitioner intends to
raise. Because Donald did not raise the issue, Marilyn was justified in believing that
Donald would not be seeking spousal support and that she had no need to prepare for the
issue at trial. Accordingly, Donald was estopped from pursuing the issue.
              Even if the issue were properly raised, Donald failed to establish his
entitlement to spousal support under section 4320. Subdivision (d) of that section
requires that the trial court base a spousal support award on the “needs of each party
based on the standard of living established during the marriage.” The trial court found
that there was no evidence presented on the parties’ standard of living during the
marriage. Without that evidence, the court could not properly weigh the section 4320
factors. (See In re Marriage of Cheriton (2001) 92 Cal. App. 4th 269, 302-304 [“the
marital standard of living is relevant as a reference point against which the other statutory
factors are to be weighed”].)
              In addition, section 4320, subdivision (n) requires the trial court to consider
“[a]ny other factors the court determines are just and equitable.” The court found that
“[u]nder the unique circumstances of this case, neither party is entitled to an award of
spousal support.” The court specifically cited Donald’s breach of fiduciary duties in
violating the ATROs and in failing to disclose the amount of the Pagoda proceeds, to give
Marilyn her community property share and to provide an accounting of how the money
was being spent.

                                               6
              Finally, Donald contends the trial court abused its discretion by terminating
jurisdiction to award spousal support. It is true that “after a lengthy marriage, when
factors such as age and poor health may inhibit a supported spouse’s ability to become
self-supporting notwithstanding good faith efforts, it is an abuse of discretion to terminate
support and jurisdiction unless the evidence shows the spouse can be self-supporting.
[Citations].” (In re Marriage of Heistermann (1991) 234 Cal. App. 3d 1195, 1201 & fn.8.)
This rule does not apply here because the trial court found that the parties are self-
supporting. (See In re Marriage of Prietsch & Calhoun (1987) 190 Cal. App. 3d 645,
664.) Substantial evidence established that both parties have their own earnings, are
receiving Social Security benefits, have received rental income from a son and were
entitled to one-half of the $1,056,000 in Pagoda proceeds. Under these circumstances,
the trial court appropriately terminated jurisdiction to award spousal support.
                      Marilyn’s Request for Attorney Fees and Costs
              The trial court awarded Marilyn her attorney fees and costs under section
2107, subdivision (c).3 Citing In re Marriage of Fong (2011) 193 Cal. App. 4th 278, the
court found that Marilyn was entitled to fees and costs because Donald “failed to comply
with his fiduciary obligation to [Marilyn] to fully and accurately report income, assets
and obligations.” Donald contends the award must be reversed because it was based on
an outdated income and expense declaration.
              Donald relies upon section 2107, subdivision (d), which states that only a
party that is in compliance with their own financial disclosures may request that the court
impose monetary sanctions, including reasonable attorney fees and costs under
subdivision (c). Donald argues Marilyn is a “non-complying” party because she did not

              3
               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."

                                              7
serve a final declaration of disclosure or a “current” income and expense declaration
under section 2107. Section 2107, subdivision (d) states specifically that “[t]he failure to
comply with the disclosure requirements does not constitute harmless error.” This
provision superseded prior case law affirming judgments under a “harmless error”
standard despite a violation of the disclosure statutes. (See In re Marriage of Steiner &
Hosseini (2004) 117 Cal. App. 4th 519, 526 (Steiner).)
              But statutes cannot preempt constitutional requirements. Pursuant to the
California Constitution, no judgment may be set aside or new trial granted unless there
has been a miscarriage of justice. (Cal. Const. art. VI, § 13; Steiner, supra, 117
Cal.App.4th at p. 526 [“The California Constitution trumps any conflicting provision of
the Family Code”].) Thus, notwithstanding section 2107, subdivision (d), a party seeking
set-aside relief or reversal on appeal for noncompliance with the statutory disclosure
requirements, must show some prejudice as a result of the nondisclosure. In other words,
the party seeking to set aside the judgment must identify some portion of the judgment
materially affected by the nondisclosure. (In re Marriage of Kieturakis (2006) 138
Cal. App. 4th 56, 92; Steiner, supra, 117 Cal.App.4th at pp. 525-528 & fn. 3 [holding that
in the absence of “some reasonably specific articulated showing of a miscarriage of
justice,” the parties’ failure to exchange final declarations of disclosure did not constitute
reversible error].)
              Donald bears the burden, therefore, of showing on appeal ‘“exactly how the
error caused a miscarriage of justice . . . .’” (In re Marriage of Dellaria (2009) 172
Cal. App. 4th 196, 205; Steiner, supra, 117 Cal.App.4th at p. 526.) Donald has not met
this burden. He has not shown that any portion of the attorney fees and costs award was
materially affected by Marilyn’s failure to submit a current disclosure declaration at trial
or that there was any miscarriage of justice. The trial court made the award based not on
need, but rather on Donald’s violation of the ATROs and breach of his fiduciary duties to
Marilyn. In fact, it was these acts that necessitated the time and expense of a trial. We
reject his contention that noncompliance with the current disclosure requirement
constitutes reversible error.

                                              8
                      Donald’s Request for Attorney Fees and Costs
              Donald argues that the trial court erred by denying his request for attorney
fees and costs under section 271, which authorizes an award of fees and costs as a
sanction for uncooperative conduct that frustrates settlement and increases litigation
costs. (See In re Marriage of Fong, supra, 193 Cal.App.4th at p. 291.) The decision
whether to award fees and costs under this section is reviewed for abuse of discretion.
(In re Marriage of Corona (2009) 172 Cal. App. 4th 1205, 1225.)
              Donald has not demonstrated an abuse of discretion. Although the trial
court did not expressly rule on Donald’s request, it must be presumed that the trial
court intended to deny his request for attorney fees and costs because he had violated
the ATROs and breached his fiduciary duties to Marilyn. It was his conduct, not
Marilyn’s, which the court found to be uncooperative. Indeed, it was his conduct that led
to a two-day trial when he refused to provide any accounting regarding the Pagoda
proceeds or to stop spending Marilyn’s half of the proceeds. Given these findings, it
would be inequitable to require Marilyn to pay his fees and costs.
                                      DISPOSITION
              The judgment is affirmed. Respondent shall recover her costs on appeal.
              NOT TO BE PUBLISHED.

                                          PERREN, J.

We concur:

              GILBERT, P. J.

              TANGEMAN, J.

                                             9
                               Donna D. Geck, Judge
                       Superior Court County of Santa Barbara
                        ______________________________

             Helen Crawford Zajic for Appellant.
             The Law Offices of Matthew J. Long, Matthew J. Long and Guneet Kaur
for Respondent.