Opinion
A114584
5-9-2007
In re Marriage of ELEANOR LINDQUIST and JEFFREY C. LINDQUIST. ELEANOR LINDQUIST, Appellant, v. JEFFREY C. LINDQUIST, Respondent.
NOT TO BE PUBLISHED
On or about December 9, 2005, appellant Eleanor Lindquist filed an application for spousal support and health insurance coverage in the marital dissolution action she had previously initiated against her then husband, respondent Jeffrey Lindquist. Unfortunately for Eleanor, between the time she initially petitioned for dissolution and when she subsequently requested court-ordered spousal support—a period of nearly 14 months—Jeffrey had filed for bankruptcy and become unemployed.
In light of a bankruptcy court order providing that the dissolution action was stayed for all purposes except for entry of the dissolution itself, the trial court denied Eleanors application for support. After the Ninth Circuit Court of Appeals subsequently vacated the stay order and mandated that Eleanor be returned to the position she would have held had the dissolution action not been improperly stayed, Eleanor moved the trial court for spousal support retroactive to the date of the improper stay order and for sanctions, which the court denied. We conclude that the trial court did not abuse its discretion in so ruling, and thus affirm the order denying Eleanors application for retroactive spousal support and her request for sanctions.
I. Background
On September 27, 2004, Eleanor filed a petition in the San Mateo County Superior Court for dissolution of her union to Jeffrey after approximately 11 years of marriage. Significantly, in the petition Eleanor did not request a determination of her right to receive spousal support. Instead, the two agreed upon an informal support arrangement, by which Jeffrey maintained Eleanor on the health insurance he had through his employment at Intel Corp. (Intel) and paid her $2,600 per month.
At various points in the record, it appears Jeffrey was paying Eleanor $2,600 per month. At other points, however, the figure appears to be $2,500.
On January 21, 2005, Jeffrey filed a Chapter 13 petition for bankruptcy. At the time of Jeffreys filing, the spousal support arrangement remained informal, having never been reduced to a court order.
During the pendency of Jeffreys bankruptcy case, Eleanor filed several motions challenging various aspects of the proceeding, including a motion for relief from the Bankruptcy Codes automatic stay provision so she could proceed with the marital dissolution action. On June 17, 2005, the bankruptcy court issued an order (the June 17 order) granting Eleanors motion in part, as follows: "Relief from the Automatic Stay with regard to the Petition for Dissolution of the Marriage . . . is granted ONLY for the purpose of allowing an order for divorce to be entered. Relief from the Automatic Stay is NOT GRANTED for any other reason or any other purpose including, but not limited to, determination of (1) property settlement and (2) spousal support. Further, any interlocutory order previously submitted to the San Mateo County Superior Court cannot be entered. Any order or judgment, entered postpetition without further relief from the automatic stay from this Court, is void and without effect." The order was prepared by Jeffreys counsel in the bankruptcy action.
On November 11, 2005, Jeffrey lost his job at Intel. As a consequence, he stopped making the voluntary support payments to Eleanor, and her health insurance coverage was terminated.
On or about December 9, 2005, Eleanor filed an application in the dissolution case for an order awarding her $2,500 in spousal support and reinstating her health insurance. The hearing on the application was scheduled for January 17, 2006, and, in the interim, the court ordered Jeffrey "to reinstate health insurance coverage for Eleanor Lindquist immediately or cover her through COBRA."
On or about January 11, 2006, Jeffrey filed a response objecting to the requested order. In support, he submitted a declaration by his attorney in the dissolution action explaining that, pursuant to the bankruptcy courts June 17 order, the automatic bankruptcy stay remained in place in the dissolution action for all purposes—including support orders—with the sole exception of entry of the dissolution itself. Jeffreys counsel opined that the bankruptcy courts order thus prohibited Eleanor from seeking the requested relief. Jeffrey sought his attorneys fees and costs incurred in opposing Eleanors motion.
In a reply dated January 13, 2006, Eleanor argued that Jeffrey was "judicially estopped" from denying he owed her support and additional expenses because Jeffreys income and expense schedule in the bankruptcy case listed payments to her totaling $ 2,143 per month. Additionally, she argued, he "stipulated" to payment of spousal support, an apparent reference to a statement made during a hearing on Eleanors motion for relief from the bankruptcy stay by Jeffreys bankruptcy counsel that "its unfortunate that we cant find a way to pay Ms. Lindquist any additional funds, but she is entitled to the support that weve agreed to, and I dont believe that theres any dissolution court that can find that theres any other feasible way for him to pay any more. . . ." Eleanor also disputed that an application for spousal support is subject to the automatic bankruptcy stay, accusing Jeffreys counsel in the dissolution action of falsely representing the applicable law, and contending, to the contrary, that claims for support have the "highest priority over all claims" in a bankruptcy action.
Eleanors motion came on for hearing on January 17, 2006. On January 30, 2006, the trial court entered an order denying Eleanors request that Jeffrey be ordered to reinstate her medical insurance and pay her spousal support, noting that the "matter is stayed in bankruptcy court" which deprived the trial court of jurisdiction to entertain Eleanors request. The court ordered Eleanor to pay Jeffreys attorneys fees in the amount of $1,000.
On January 30, 2006, Eleanor obtained an order from the United States Court of Appeals for the Ninth Circuit granting her "emergency motion to vacate the stay order issued" by the bankruptcy court. The Ninth Circuit stated, "The automatic bankruptcy stay does not apply to any proceedings in the petition for dissolution of marriage," and authorized Eleanor to "seek relief in the San Mateo County Superior Court for spousal support, medical insurance, the division of community property, and any other relief related to the dissolution of marriage." The Ninth Circuit then requested briefing on the issue of "the bankruptcy courts jurisdiction to enter an order staying proceedings in the petition for dissolution of marriage . . . ."
In light of the Ninth Circuits order, on February 1, 2006, Eleanor filed a motion in the dissolution action for reconsideration of her application for spousal support and health insurance coverage. She argued that the order denying her motion must be vacated in light of the Ninth Circuits order vacating the bankruptcy courts stay on the dissolution action. She also requested that the sanctions order against her be vacated, and that sanctions instead be imposed against Jeffreys counsel in the dissolution action, claiming he deliberately misrepresented the controlling law in order to deprive her of court-ordered spousal support.
In response, Jeffrey indicated he would "request that [Eleanor] be added to his COBRA coverage on the condition that she pay the premiums in advance." He urged, however, that "the original sanctions order was appropriate and the pending request without merit" because "[i]f memory serves, an order is the law until vacated by a higher tribunal."
Eleanor replied on February 17, 2006, and the matter came on for hearing on February 21, 2006. On March 1, 2006, the trial court vacated the sanctions award against Eleanor in light of the Ninth Circuits order vacating the June 17 stay order. The trial court also ordered that Jeffrey was to maintain health insurance for Eleanor until further order of the court. However, the trial court denied Eleanors request for spousal support, noting that Jeffrey was "collecting workers compensation and not capable of working."
A subsequent order dated August 15, 2006 clarified that Jeffrey was in fact receiving unemployment benefits, rather than workers compensation benefits.
On May 25, 2006, the Ninth Circuit, presumably having received the requested briefing, issued an order finding that the "automatic bankruptcy stay does not apply to any proceedings in the petition for dissolution of marriage between" Eleanor and Jeffrey. The court directed the bankruptcy court to enter an order granting Eleanor "such other and further relief to which she would have been entitled if the June 17, 2005 and January 31, 2006 [sic] orders had not been entered, including status as a priority claimant in [Jeffreys] bankruptcy if [Eleanor] otherwise proves her entitlement to such relief."
That same day, Eleanor filed another application in the dissolution action for an order awarding her $2,600 per month in spousal support and seeking "back spousal support as of January 5, 2005[ ] or June 17, 2005." Eleanor explained that Jeffrey was moving the bankruptcy court for summary judgment on her claim for priority treatment of spousal support because she never obtained a court order for support. She argued, however, that Jeffrey and his bankruptcy counsel prevented her from obtaining such an order by misrepresenting the law in order to obtain a stay in the dissolution action, a stay that the Ninth Circuit since ruled was "illegal." This "fraudulent scheme," in Eleanors words, prevented her from obtaining an order for spousal support, which in turn prevented her from becoming a priority claimant in Jeffreys bankruptcy action. Because the Ninth Circuit ordered that the bankruptcy court grant her such relief as she would have been entitled to had she been granted relief from the stay, she argued the trial court was compelled to grant her spousal support based upon Jeffreys earnings as of June 17, 2005, which was prior to his termination from Intel.
Nowhere in her application did Eleanor explain the significance of January 5, 2005.
Eleanor also requested that the trial court order Jeffrey to pay $5,017 in storage fees. This request is not at issue in this appeal. We also note that on appeal Eleanor contends that she is entitled to retroactive spousal support dating back to February 10, 2005, with no explanation as to the relevance of that date.
In response, Jeffrey consented to the existing order requiring that he pay Eleanors monthly health insurance premium. As to her request for spousal support, however, Jeffrey quoted from his motion for summary judgment in the bankruptcy action: "[P]rior to the bankruptcy petition date of January 21, 2005, Eleanor Lindquist had not filed a motion for spousal support in the [d]issolution [p]roceeding. [¶] Eleanor Lindquist has complained incessantly in these proceedings that she was allegedly deprived of an opportunity to obtain a priority support order from the Superior Court of California allegedly due to allegedly improper conduct by the Debtor and[/]or Debtors counsel. While the Debtor and Debtors counsel deny any and all of her allegations of improper conduct her complaints are a red herring and a mere smokescreen intended to divert the court from the real issue, which is very simply [sic]. She has no priority status in this bankruptcy proceeding because she herself failed to file a motion for support prior to the bankruptcy petition date in the Dissolution Proceeding which she initiated in the Superior Court of California against Jeffrey Lindquist. For that, she has no one to blame but herself. The consequences of failing to file a motion for support prior to the bankruptcy petition date under California law is [sic] that she has no pre-bankruptcy claim for support. Whatever happens or happened after the bankruptcy petition date is totally irrelevant to the question of whether she has or could obtain a pre-bankruptcy petition date claim for support."
Shortly before argument Eleanor filed a request for judicial notice of a January 24, 2007 filing in the bankruptcy proceeding. That material is irrelevant to the issues on this appeal, and we deny the request.
Jeffrey further explained that while he was employed he voluntarily paid Eleanor spousal support in the monthly sum of $2,600. He noted, however, that "utilizing a SupportTax calculation for the period from June 17, 2005 to the time [his] employment was terminated with Intel," his support obligation would only have been $1,697 per month. Therefore, by his calculations, he overpaid Eleanor $6,840 during that time period. He therefore requested that, should the court determine Eleanor was entitled to retroactive spousal support, the court should find the support would have been in the amount of $1,697 per month, in which case Eleanor would owe Jeffrey for his overpayment.
On July 18, 2006, the court denied Eleanors request for an order for retroactive spousal support and sanctions. This timely appeal followed.
II. Discussion
We have conducted our analysis without the benefit of input from Jeffrey, since he elected not to file a respondents brief.
A. Standard Of Review
The propriety of setting or modifying spousal support rests in the sound discretion of the trial court. (In re Marriage of Olson (1993) 14 Cal.App.4th 1, 7 [modifying support] (Olson ); In re Marriage of Smith (1990) 225 Cal.App.3d 469, 479 [setting support].) We therefore review the trial courts order denying Eleanors application for retroactive spousal support for an abuse of discretion. In doing so, we must " `accept as true all evidence tending to establish the correctness of the trial judges findings, resolving all conflicts in the evidence in favor of the prevailing party and indulging in all legitimate and reasonable inferences to uphold the judgment. " (In re Marriage of Stephenson (1995) 39 Cal.App.4th 71, 82, fn. 5.) " `An abuse of discretion occurs "where, considering all the relevant circumstances, the court has exceeded the bounds of reason or it can fairly be said that no judge would reasonably make the same order under the same circumstances." " (In re Marriage of Bower (2002) 96 Cal.App.4th 893, 898-899, quoting Olson, supra, 14 Cal.App.4th at p. 7.)
B. The Trial Court Did Not Abuse Its Discretion In Denying Eleanors Request For Retroactive Spousal Support And Sanctions
1. The Ninth Circuits Order Did Not Require That Eleanor Be Awarded Spousal Support As Of June 17, 2005
Eleanors arguments on appeal reduce to one essential claim: that the Ninth Circuits order mandating she be returned to the same position she would have been in if the June 17 order denying her request for relief from the stay had not been entered means that she was entitled to spousal support based on Jeffreys income as of June 17, 2005. Any ruling to the contrary, she contends, permits Jeffrey to take advantage of his own wrongdoing, namely his counsels representation that the automatic bankruptcy stay applied to the dissolution action. We disagree.
Eleanors argument is necessarily based on the premise that but for the June 17 order denying relief from the stay, she would have applied for court-ordered spousal support. However, Eleanor cites no evidence to substantiate this premise—and the record belies it. First, Eleanor filed a petition for dissolution on September 27, 2004, and Jeffrey filed for bankruptcy on January 21, 2005. At no time during the intervening four months did Eleanor seek court-ordered support. Similarly, nearly six months passed between Jeffreys filing of his bankruptcy petition and the bankruptcy courts issuance of the June 17, 2005 order denying Eleanors request for relief from the bankruptcy stay. At no time during those six months did Eleanor seek a court order for spousal support. Finally, the first time Eleanor sought a court order for spousal support was on or about December 9, 2005, which was shortly after Jeffrey lost his job at Intel and stopped making voluntary support payments. This first request for court-ordered support occurred nearly six months after the bankruptcy court denied Eleanors request for relief from the stay, yet at no time during that intervening period did she challenge the order.
There is only one logical conclusion to be drawn from these facts: the June 17 order had no impact on whether or not Eleanor sought court-ordered spousal support. Instead, as long as she was receiving voluntary payments from Jeffrey, Eleanor made no effort to obtain a court order for support. Only when Jeffrey stopped making the voluntary payments did Eleanor move for a court order. Eleanors position that but for the June 17, 2005 order, she would have moved the court for spousal support is simply contrary to the evidence. Consequently, the Ninth Circuits mandate that Eleanor be returned to her status as of June 17, 2005 did not require the court in the dissolution action to award her support payments retroactive to June 17, 2005, and the court did not abuse its discretion in failing to do so.
We also note that the Ninth Circuits order that Eleanor be given "status as a priority claimant in [Jeffreys] bankruptcy if [she] otherwise proves her entitlement to such relief" is of no avail, because Eleanor could not prove her entitlement to status as a priority claimant on her spousal support claim. Title 11 U.S.C.A. section 507(a) sets forth the priorities for unsecured claimants in a bankruptcy action. Section 507(a)(1)(A) establishes first priority for "[a]llowed unsecured claims for domestic support obligations that, as of the date of the filing of the petition in a case under this title, are owed to or recoverable by a spouse, former, spouse, or child of the debtor . . . ." (Italics added.) As of the date Jeffrey filed his bankruptcy petition, Eleanor had not sought an order for spousal support. Thus, she could not be a priority claimant.
2. Judicial Estoppel
Eleanor also argues that Jeffrey is judicially estopped from objecting to a retroactive award of spousal support, a theory she derives from the fact that Jeffrey listed support payments to Eleanor on his initial income and expense schedules in the bankruptcy action and comments made by Jeffreys bankruptcy counsel at a May 18, 2005 hearing before the bankruptcy court in which counsel acknowledged that Eleanor was entitled to support in the amount Jeffrey had agreed to pay her. Eleanor correctly observes that "judicial estoppel is an equitable doctrine which precludes a party from assuming a position in a legal proceedings [sic] which is inconsistent with one previously asserted." However, she is incorrect that judicial estoppel applies to the facts before us.
As we recently confirmed in Levin v. Ligon (2006) 140 Cal.App.4th 1456, 1469, judicial estoppel can only apply when " `(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake. " (quoting Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 183.) The purpose of judicial estoppel is "to protect the integrity of the judicial process" by preventing a litigant from playing "fast and loose with the courts." (Gottlieb v. Kest (2006) 141 Cal.App.4th at 110, 131.)
In this case, we need only look at the fourth requirement—that the litigant has taken two positions that are totally inconsistent—to determine that judicial estoppel does not apply. As noted above, in the bankruptcy proceeding Jeffrey listed support payments to Eleanor on his income and expense schedules, and his counsel represented to the court that Eleanor was entitled to the support payments on which the parties had agreed. These events occurred when Jeffrey was gainfully employed at Intel, and were reflective of his ability to pay support at that time. However, Jeffrey subsequently lost his job and no longer had any income from employment. Only when he lacked the means to make the spousal support payments did he then terminate the voluntary payments he was making to Eleanor. We fail to see the inconsistency in those positions.
Our conclusion is consistent with the opinion of the United States Bankruptcy Court for the District of Oregon. In one of the many motions Eleanor filed in Jeffreys bankruptcy action, she sought an order of contempt against Jeffrey for his alleged violation of "stipulations by his counsel before the court that he would make spousal support and medical insurance payments for her benefit," again a reference to the purported stipulation made during the May 18, 2005 hearing on Eleanors motion for relief from the bankruptcy stay. (In re Lindquist (2006) 349 B.R. 246, 249.) In ruling on the motion, the bankruptcy court explained that the statement occurred during an exchange in which the court and Jeffreys counsel attempted to explain to Eleanor, who was appearing pro se, how Jeffreys chapter 13 plan would operate. In ultimately denying Eleanors motion for contempt, the court explained: "I agree with [Jeffreys] counsel that the subject statements do not constitute a `binding agreement of support from which no deviation can occur, regardless of a change in circumstances. " (Ibid.) The court continued: "[Jeffrey] stopped making support payments to [Eleanor] after he lost his job at Intel in the fall of 2005. The record reflects that he is making COBRA payments to provide health insurance for the benefit of Ms. Lindquist, as required by the order of the San Mateo County, California Superior Court . . . . [Jeffrey] is not making the $1,375 per month support payments to [Eleanor], as projected in his original and amended Schedule J filed in this case, and that is highly unfortunate, both for him and for [Eleanor]. But he violated no court order or stipulation in ceasing to make such payments when he lost his job and thus lost the income from which to make such payments. Inclusion of the proposed support payment in the original and amended Schedule J does not constitute an order that [Jeffrey] make the payment, even in light of the order confirming [his] chapter 13 plan . . . ." (Id. at pp. 249-250.)
Eleanor cites two cases to support her judicial estoppel claim. Both are readily distinguishable. The first, Alexander v. Hammarberg (1951) 103 Cal.App.2d 872, 879, concerned the issue of joint tort feasors and did not even involve the applicability of judicial estoppel.
The second, International Engine Parts, Inc. v. Feddersen & Co. (1998) 64 Cal.App.4th 345, held that a corporation and its principals were barred from asserting a professional negligence action against an accounting firm where they had failed to disclose the negligence claim in the corporations earlier bankruptcy proceeding. (Id. at pp. 351-353.) This case is consistent with the rule laid down in Oneida Motor Freight, Inc. v. United Jersey Bank (3d Cir. 1988) 848 F.2d 414, in which the federal court held that where a debtor in bankruptcy violates its statutory and fiduciary duty to disclose a current claim during a bankruptcy proceeding, equitable and judicial estoppel operate as a bar to further litigation by the debtor. This rule of law is inapplicable here, however, because this situation is not one in which Jeffrey failed to identify a potential asset in his bankruptcy proceeding yet then turned around and attempted to collect on that asset.
3. Unclean Hands
Eleanor also accuses Jeffrey of unclean hands for having "illegally . . . obtained a stay of all access to family law court issued by the bankruptcy court and done to obtain a discharge of spousal support . . . ." While Eleanors allegations of nefarious conduct by Jeffrey and his counsel are plentiful, the evidence supporting these allegations is not. To be sure, as made clear by the Ninth Circuit, the bankruptcy courts June 17 order, which was prepared by Jeffreys bankruptcy counsel, was erroneous. But there is simply no indication in the record that Jeffrey and his counsel knowingly and maliciously procured the order with the intent to deprive Eleanor of court-ordered spousal support.
Nor can Eleanor find solace in the case of Yoo v. Jho (2007) 147 Cal.App.4th 1249, cited in the supplemental papers filed after the hearing. We do not understand any "illegal contract" to be involved here, only a determination that Eleanor was not entitled to retroactive spousal support.
4. Sanctions
Eleanors final argument that she was entitled to sanctions pursuant to Family Code section 271 is similarly without merit. As we have concluded above, the trial court did not abuse its discretion in denying Eleanors application for retroactive spousal support, so it most certainly did not abuse its discretion in denying her request for sanctions for filing that application.
Family Code section 271 provides: "(a) Notwithstanding any other provision of this code, the court may base an award of attorneys fees and costs on the extent to which the conduct of each party or attorney furthers or frustrates the policy of the law to promote settlement of litigation and, where possible, to reduce the cost of litigation by encouraging cooperation between the parties and attorneys. An award of attorneys fees and costs pursuant to this section is in the nature of a sanction. In making an award pursuant to this section, the court shall take into consideration all evidence concerning the parties incomes, assets, and liabilities. The court shall not impose a sanction pursuant to this section that imposes an unreasonable financial burden on the party against whom the sanction is imposed. In order to obtain an award under this section, the party requesting an award of attorneys fees and costs is not required to demonstrate any financial need for the award. [¶] (b) An award of attorneys fees and costs as a sanction pursuant to this section shall be imposed only after notice to the party against whom the sanction is proposed to be imposed and opportunity for that party to be heard. [¶] (c) An award of attorneys fees and costs as a sanction pursuant to this section is payable only from the property or income of the party against whom the sanction is imposed, except that the award may be against the sanctioned partys share of the community property."
Eleanor also claims entitlement to sanctions due to the fact that Jeffreys counsel "required" her "to obtain a Writ of Mandamus from the Ninth Circuit which granted a Writ of Mandamus that the Oder [sic] of June 17, 2005 and January 31, 2006 was illegal . . . ." The Ninth Circuit order arose in Jeffreys bankruptcy case, not in the dissolution action, and Eleanor has not presented any authority suggesting it is proper to sanction a party in one case (here, the dissolution action) for the partys purportedly sanctionable conduct in another case (the bankruptcy action).
III. Disposition
The order denying Eleanors request for retroactive spousal support and sanctions is affirmed.
We concur:
Kline, P.J.
Haerle, J.