Opinion
D073228
12-20-2019
In re the Marriage of ARCANGELO FIORE and MARCIA JIMENEZ. MARCIA JIMENEZ, Petitioner and Appellant, v. ARCANGELO FIORE, Appellant.
Fair Cadora and Kevin L. Cadora for Appellant Arcangelo Fiore. Marcia Jimenez, in pro. per., for Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. DS38156) APPEALS from orders of the Superior Court of San Diego County, Sharon L. Kalemkiarian, Judge. Affirmed in part, reversed in part, and remanded with directions. Fair Cadora and Kevin L. Cadora for Appellant Arcangelo Fiore. Marcia Jimenez, in pro. per., for Appellant.
In this marital dissolution action between Arcangelo Fiore and Marcia Jimenez, both parties appeal from various postjudgment orders and rulings set forth in the trial court's "STATEMENT OF DECISION AND FINDINGS AND ORDER AFTER HEARING" (statement of decision). The court filed the statement of decision after it held a hearing on postjudgment motions and requests by Jimenez for division of certain omitted assets (i.e., property not adjudicated in prior dissolution proceedings), retroactive modification of child support, and attorney fees based on need under Family Code section 2030 and as sanctions under section 271.
All subsequent statutory references are to the Family Code unless otherwise specified.
Fiore's appeal mainly concerns real property in Italy that the parties refer to as Via Landini or the Via Landini property. Fiore purchased Via Landini during the marriage and sold it in 2011. He argues that the net proceeds from the sale of the property to be divided as community property should be $156,932 rather than $325,600, as the trial court determined. Specifically, he contends that: (1) the court erred in failing to deduct from the Via Landini sales proceeds a tax charged against the sales price, the balance of a mortgage on the property, and $20,068 representing overpayments of child support that the court tentatively ruled would be credited to Fiore but declined to credit in its final statement of decision; (2) the statement of decision does not adequately address the evidence that the court relied on in determining Jimenez's share of the proceeds from the sale of Via Landini; (3) the court erred by not applying the equitable defenses of laches and "fairness and hardship" to Jimenez's omitted asset claim regarding Via Landini; (4) the court erred by not applying the equitable defense of unclean hands to all of Jimenez's omitted asset claims, based on Jimenez's undisclosed property interests in Mexico; and (5) the statement of decision is defective because it does not adequately address the court's consideration of these equitable principles or its ultimate decision to not credit him with $20,068 in overpayments of child support.
Jimenez contends that the trial court erred by (1) rejecting her claim that Fiore used community property funds to make the down payment on real property in Italy located at Via Sabatini (Via Sabatini or the Via Sabatini property); (2) ruling that certain items of personal property left at Via Landini (the Via Landini personal property) were not unadjudicated assets; (3) finding that Jimenez failed to present sufficient evidence that Fiore had breached his fiduciary duty as to Via Landini and failing to address whether he had also breached his fiduciary duty as to the Via Landini personal property and the Via Sabatini down payment; (4) insufficiently modifying Fiore's child support payments and denying retroactive modification under section 3653; (5) denying her an award of attorney fees and costs under section 3652 as the prevailing party on the child support litigation; (6) ignoring her request for attorney fees under section 3667, based on the inaccuracy and incompleteness of Fiore's income and expense declarations; (7) denying her request for an order augmenting the $20,000 attorney fees award that a different judge had made under sections 2030 and 2032; and (8) denying her request for sanctions under sections 271 and 1101.
We reverse the orders in the statement of decision denying Jimenez's request to adjudicate the Via Landini personal property as omitted assets and denying her request for sanctions under section 271. We remand for the court to adjudicate the Via Landini personal property as omitted assets, to rule on Jimenez's requests for attorney fees under sections 3652 and 3667, and to reconsider her request for sanctions under section 271. We otherwise affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Jimenez and Fiore were married in Mexico on April 15, 1997, and separated 11 years and six months later, on October 22, 2008. They had two children during the marriage—twin daughters born in July 1999.
Before the marriage, Jimenez had experience working in retail and also as a radio announcer in Mexico. She did not work outside the home during the marriage. In proceedings in the trial court, Jimenez represented that, at the beginning of the marriage, Fiore worked for a multinational company that sold paper products, and that during the marriage, he owned, worked for, or provided consulting services to various companies in Italy and the United States. Fiore represented that he was "self-employed and the owner of a sales agency."
In 1999, Fiore purchased the Via Landini property in Italy and the parties moved into the home. Fiore indicated on the purchase contract that he was single. At trial, he explained that he made that representation because he had married in Mexico and it would have been a lengthy and complicated process to certify and translate into Italian the documents showing that he was married. He claimed that he had purchased the property with separate property funds and that the property was his separate property. However, on appeal he acknowledges that Via Landini was an omitted asset under section 2556 because it was purchased during the marriage and there was no evidence that rebutted the presumption that it was community property.
In 2002, the parties purchased a property on Northshore Drive in Chula Vista, California (the Northshore property). The down payment on that property was made with Jimenez's separate property funds and the mortgage payments were made with community property funds. The family moved into the Northshore property in 2005, and traveled back and forth between Via Landini and the Northshore property during the marriage.
Jimenez filed a petition for dissolution on October 27, 2008. Fiore was personally served with the petition on October 28 at the Northshore property but did not appear. On December 26, 2008, Jimenez filed a request to enter default and default was entered. Jimenez also filed a community and quasi-community property declaration in which she listed the Northshore property, but did not include Via Landini. On January 20, 2009, the trial court held a default hearing on the petition and on April 28, 2009, entered a judgment of dissolution that ended the parties' marital status. The judgment awarded physical custody of the children to Jimenez, reserved on the issues of child and spousal support, and awarded the Northshore property to Jimenez at a market value of negative $18,100. In March 2009, Fiore purchased the Via Sabatini property. He made a down payment on the property equivalent to $62,430 USD (United States dollar).
At a hearing on February 9, 2010, the court ordered Fiore to pay Jimenez child support of $1,190 per month. On March 10, 2011, the County of San Diego Department of Child Support Services (DCSS) filed a motion for judicial determination of child support arrearages, at Jimenez's request. Jimenez prepared a declaration in support of the motion indicating that Fiore had failed to make his monthly child support payment from February through July of 2010.
Fiore filed a response to the motion in which he represented that from February through July of 2010, he had paid Jimenez $12,319.82 "in lieu of child support," which amounted to an average monthly payment of $2,053.30. In a declaration he stated: "[Jimenez] herself has not accurately reflected her net worth, as she has not mentioned in her income declaration that she has ownership interests in various Mexican radio stations as noted by the exhibit attached to my response papers. It is my belief that monies are paid to [Jimenez] as a result of her ownership interests in these Mexican Radio stations that she has not included in her income and expense declaration submitted in support of her moving papers in this matter."
In June 2011, Fiore told Jimenez that he needed her cooperation to sell Via Landini because there was a judicial lien on the property and Italian law required her signature to sell it. In her trial brief, Jimenez stated that after she consulted with her attorney about the matter, she realized that Via Landini was community property. Jimenez filed an application for an order to show cause (OSC) in August 2011 to claim her interest in "undisclosed and omitted assets," including a bank account at Regents Bank in La Jolla (La Jolla bank account), Fiore's Italian businesses, and "significant real property in Italy purchased during [the] marriage[,]" one of which was Via Landini. Via Landini was sold on September 7, 2011.
Fiore filed a responsive declaration to the OSC in September 2011. He contended that Jimenez was aware of all community and separate property assets at the time that she sought a default judgment, and that all community assets had been previously divided. He averred that he was in Italy during most of the court proceedings and had not received notice of the proceedings because papers apparently had been sent to an old address. The La Jolla bank account had been "expended on [Jimenez's] separate property debts[,]" and "[t]he real property in Italy was purchased with separate property and [was] currently being placed on the market for sale." Fiore concluded: "I have substantial community tax debt in Italy which is why I was under the belief that [Jimenez] and I were in agreement with the way the property and debt [have] been divided."
Around the time Fiore filed his responsive declaration, he and Jimenez entered into an oral agreement. According to Jimenez, she agreed to abandon her omitted asset motion and "file bankruptcy in order to forfeit the mortgage payments on the [Northshore property]," and Fiore agreed to pay the cost of the bankruptcy and the attorney fees that she had incurred in bringing the omitted assets motion. Jimenez also agreed to sign papers for the sale of Via Landini. She claimed that Fiore promised to give her half of the proceeds from the sale of Via Landini to buy a house in San Diego. He told her that he would lose Via Landini if she did not sign the papers.
According to Fiore, Jimenez agreed to abandon her omitted asset motion in exchange for his agreement to pay her $1,600 per month instead of the court-ordered child support payments of $1,190. Fiore also agreed to purchase a vehicle for Jimenez and give her additional money to pay off her personal debt. He denied that he had agreed to purchase a house for her. He claimed that the Northshore property was facing foreclosure because Jimenez had credit card debt of $38,000 and could not afford to maintain the home on her own. He believed that "a Chapter 7 Bankruptcy would prove to be a smart choice in order to give her a fresh start."
Jimenez signed the papers for the sale of Via Landini on September 7, 2011, and on September 29, 2011, she requested that DCCS close its child support enforcement action against Fiore. She indicated on the request form that she was making the request because Fiore had agreed to pay her "[$] 1,900 a month for the time being[.]" The trial court took her omitted assets motion off calendar in October 2011.
Four years later, in October 2015, Jimenez filed a request for order (RFO or motion) seeking adjudication of omitted assets, including Via Landini, the La Jolla bank account, and Via Sabatini. She also sought retroactive child support modification and attorney fees and costs. She claimed that Fiore had failed to keep his promise to give her half of the proceeds from the sale of Via Landini to buy a house in San Diego, and that he had used the proceeds to buy more property in Italy, a property in Chula Vista, and a restaurant in San Diego, Olivetto Ristorante & Wine Bar. Based on Fiore's alleged "fraudulent actions and false promises," Jimenez asked the trial court to award her 100 percent of the proceeds of the sale of Via Landini under section 1101, subdivision (h). The court set the matter for trial on June 6, 2016, but later vacated the trial date and set a family resolution conference for October 24, 2016.
Section 1101, subdivision (h) provides that when a breach of fiduciary duty by a spouse falls within the ambit of Civil Code section 3294, California's punitive damages statute, the remedy may be "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."
In August 2016, Jimenez filed an RFO for attorney fees and costs based on financial need. She requested that Fiore be ordered to pay her $34,936, consisting of $14,936 for fees and costs incurred, $19,000 for estimated future fees and costs, and $1,000 for fees and costs for limited scope representation. On October 11, 2016, the court (Judge Hernandez) ordered Fiore to pay Jimenez interim attorney fees in the amount of $20,000, payable at the rate of $2,000 per month beginning November 1, 2016. The court set March 9, 2017, as the trial date for Jimenez's omitted asset RFO.
On December 6, 2016, Jimenez filed an RFO in pro per requesting modification of child support and back child support and noticing a hearing date of April 4, 2017. She then filed an ex parte application to shorten time for the hearing, requesting a hearing date in January 2017. The court granted her application to shorten time, but calendared her child support RFO to be heard on March 9, 2017, concurrently with the trial on her omitted asset RFO. The court later rescheduled the trial date to March 16, 2017, and assigned Judge Sharon L. Kalemkiarian to preside over the trial.
Fiore filed a responsive declaration to Jimenez's RFO's in which he claimed that Via Landini was his separate property and asked the court to deny Jimenez's "request for partition of the omitted asset." In addition, he requested an order for guideline child support based on the parties' incomes and custodial timeshare and asked that the court give him credit for payments made. He also asked the court to deny Jimenez's request for additional attorney fees and costs and to terminate the previous order awarding her attorney fees.
The trial court held a full-day trial on March 16, 2017. After hearing closing arguments, the court issued a tentative oral decision. The court tentatively denied Jimenez's requests for retroactive child support modification and for reimbursement from the Via Sabatini property, and rejected her claim of breach of fiduciary duty. The court found that Via Landini was community property and scheduled a hearing for July 14, 2017, to determine the net proceeds from the sale of Via Landini.
After noting that Fiore had made monthly payments to Jimenez that exceeded the amount of the court-ordered child support and had also made other payments under "some kind of agreement between [Jimenez and Fiore]," the court stated, "So that's a total of $20,068 over the period from July of [2014] forward for which I am giving [Fiore] credit for overpaying something. I'm not going to call it support. He was making payments to her. It appears to be subject to some kind of agreement, but I don't know what the details of that agreement were." The court indicated that it would credit Fiore the $20,068 he overpaid Jimenez against Jimenez's share of the proceeds from the sale of Via Landini.
Jimenez filed an ex parte request for a statement of decision under section 3654 regarding the child support and attorney fees issues. The court granted the request and set a schedule for Fiore to "file proposals as to content/controverted issues," for the court to file a proposed statement of decision, and for the parties to file objections to the proposed statement.
At the hearing on July 14, 2017, the trial court determined that the amount of the net proceeds from the sale of Via Landini was $324,600, after deducting from the sale price of $363,009 Fiore's separate property down payment of $35,032, and a commission of $3,376. Accordingly, the court ruled that Fiore owed Jimenez half that amount or $162,300 as her community property share of the net proceeds. The court informed the parties that it would issue a tentative statement of decision and give the parties the opportunity to file objections to it before the court filed its final statement of decision.
Statement of decision
The trial court filed its final statement of decision on September 5, 2017, "on the issue of child support, and including findings and orders on the other issues raised by motion in the proceedings heard on March 16, 2017 and July 14, 2017."
The statement of decision first addressed Jimenez's omitted asset claims. The court found that Via Landini was an omitted community property asset and that the proceeds from the sale of the property would "be divided 50/50." The court reaffirmed its oral ruling that the proceeds from the sale were $324,600, after deducting costs of sale and Fiore's separate property down payment of $35,032, and that each party's community property interest was "one half of that amount, or $162,300, payable forthwith." The court reversed its tentative oral decision to award Fiore a credit against Jimenez's share of the Via Landini proceeds in the amount of $20,068 for overpayments of child support and other payments.
The court denied Jimenez's request for an order finding that the La Jolla bank account was an omitted asset subject to division. The court concluded that it did not have enough information from either party to establish that the account was an omitted asset, and that Jimenez had not met her burden to present sufficient evidence for the court to determine the nature and value of the asset. The court also found that the Via Landini personal property items were not omitted assets, and denied Jimenez's request for an order finding that Fiore had used community property funds to purchase Via Sabatini, concluding that Jimenez had presented no "evidence to support her suspicion."
The court rejected Jimenez's claim under section 1101, subdivision (a), that Fiore had breached his fiduciary duty by not disclosing her community interest in the Via Landini property. After noting that Jimenez's breach of fiduciary duty claim was "focused solely on the 'omitted asset' of the [Via] Landini property[,]" the court concluded that the evidence did not support a finding that Fiore attempted to impair Jimenez's one-half interest in Via Landini.
In a footnote, the court stated that the three-year statute of limitations under section 1101, subdivision (d)(1), had expired on Jimenez's breach of fiduciary duty claim, but added, "The Court is not raising this as a bar to the action sua sponte as it is an affirmative defense, but does note this for the benefit of the record."
In ruling on Jimenez's request for child support modification, the court used Fiore's "stated average monthly [income] of $4,000, on his March 3, 2017 income and expense declaration, as his income available for child support." The court ordered Fiore to pay child support of $1,237 per month, effective April 1, 2017. The court stated that it was making a child support guideline order "[b]ased upon the evidence before [it] and considering the credibility of the testimony received[.]" The court denied Jimenez's request to make the support order retroactive to October 8, 2015, the date she filed her RFO requesting modification of child support.
The court reaffirmed Judge Hernandez's October 11, 2016 order requiring Fiore to pay Jimenez attorney fees of $20,000, payable at the rate of $2,000 per month, but declined to order Fiore to pay any additional attorney fees. The court found that Fiore was unable to pay Jimenez's additional fees and that Jimenez had not shown a need for additional fees. The court also declined to award Jimenez attorney fees as sanctions under section 271 because it found no conduct on Fiore's part that warranted sanctions.
We will include additional relevant facts in our discussion of the legal issues.
DISCUSSION
FIORE'S APPEAL
I. Division of Via Landini Sales Proceeds
Fiore contends that the trial court's award of $162,300 to Jimenez as her community property share of the net proceeds from the sale of Via Landini is excessive because the court erroneously failed to deduct from the gross proceeds: (1) a 20 percent tax paid to the Italian government; (2) approximately $75,000 to pay off a mortgage on the property; and (3) $20,068 representing overpayments of child support that the court credited to Fiore in its tentative ruling, but not in its final statement of decision. Fiore contends that the statement of decision is defective because it does not adequately address the evidence that the court relied on in determining Jimenez's share of the proceeds from the sale of Via Landini or the court's decision to not credit him with $20,068 in overpayments of child support.
Alleged mortgage and tax payments
At trial, Fiore testified that he sold Via Landini for $363,009 in 2011 and that the net proceeds from the sale were $75,000 after he paid a 6 percent commission to the realtor, a 20 percent tax he referred to as "VAT," and the balance owing on a mortgage on the property. However, on appeal he contends that the net proceeds to be divided as community property should be $156,932 after deducting from the sales price his separate property down payment of $35,032, a commission of $3,376, a 20 percent tax ($72,601), $75,000 to pay off a mortgage on the property, and $20,068 representing overpayments of child support.
Presumably, VAT stands for "value added tax," although nothing in the record explains why the seller, rather than the buyer of real property, would pay such a tax.
The court deducted from the Via Landini sale proceeds only the commission and Fiore's separate property down payment.
On cross-examination, Jimenez's counsel asked Fiore whether he had provided proof of the mortgage on Via Landini to the either court or Jimenez. Fiore responded that he had no records from the sale of Via Landini. When asked if he could obtain records in Italy, Fiore answered, "No." He testified that he had attempted to get those records and was told "after five years, they don't have anything." He did not remember the length of the mortgage, although he had stated in response to interrogatories that it was for a 30-year term.
Jimenez's counsel showed Fiore a document translated into English that she represented to be the mortgage deed from Via Landini showing that the mortgage was to be paid in 20 semiannual payments beginning in December 1999. Therefore, the mortgage would have been paid in full in 2009. Fiore reviewed the document that Jimenez presented to him in Italian, rather than the translation, and questioned its legitimacy. He refused to confirm its terms because it was an "anonymous piece of paper" that he did not recognize and he refused to "discuss something that is anonymous." He later refused to confirm the document's terms because the document was "not a fact" and he "want[ed] to talk about the real facts." He noted that the document was "not from the bank." The court asked Fiore whether he remembered the amount of his mortgage payment and he responded that he could not remember.
In closing argument, Jimenez's counsel noted that Fiore had presented no proof to support his claim that there was a mortgage on Via Landini when he sold it. The court asked counsel whether Jimenez denied that the document she presented was a mortgage. Counsel responded, "Oh, no, your Honor. This is where I was going with it. The [document] states that . . . it's a ten-year mortgage. Via Landini was purchased in 1999 and it was sold in 2011. So how there was such a mortgage remaining on it, we don't know."
At the conclusion of the trial, the court found that Via Landini was community property but stated that it could not determine the amount of Jimenez's share of the proceeds from the sale of the property because "what needs to be proven up are the costs of sale." The court scheduled the July 14, 2017 hearing to determine the net proceeds from the sale of Via Landini. The court explained that the "continued hearing as to costs of sale" would include "the commission, the mortgage, and any tax liens that were paid off so that we get to a net." The court stated to Fiore, "I do appreciate, Mr. Fiore, it's tough to get records in the United States for a 2011 sale as well, but to the extent you can recreate the documents. And just be aware that if you cannot, I need evidence, and I'm going to take whatever evidence there is and then make a call as to what the net proceeds seem to have been."
At the hearing on July 14, 2017, the trial court asked Fiore's counsel whether Fiore had provided him with any additional "evidence of a tax lien that was paid at [the time of the sale] or any other obligations that were paid" from the Via Landini sales proceeds. Fiore's counsel responded that Fiore had provided him with additional evidence, and he had provided that evidence to Jimenez's counsel. Jimenez's counsel objected to Fiore's new evidence, consisting of "63 pages of lodgments," because she had not received the documents until the afternoon prior to the hearing, and the documents were not translated from Italian into English and were not certified.
The court asked to see Fiore's exhibits to "make a determination." Before reviewing them, the court said to Fiore's counsel, "I can't consider anything that's not translated; so anything that is not translated—and I had made that clear to your client." Fiore's counsel offered to explain what each exhibit was and the court responded, "That's not going to be enough, [counsel]. . . . I'm not putting this on you. [Fiore] knew what I needed by when." The court indicated that Fiore had waited too long to provide his exhibits.
The court reviewed the eight exhibits that Fiore had provided to his counsel and noted that four were in Italian and were not translated, and the others were not relevant to the sale of Via Landini. After reviewing the exhibits, the court stated that it would find "the community property split, is as described by [Jimenez's] counsel." The court found that each party's community property share of the net proceeds from the sale of Via Landini was $162,300. However, the court stayed "any payment obligations" until it issued its statement of decision, and advised the parties that crediting Fiore with $20,068 for overpayments of child support was "a tentative decision at this point."
Fiore contends that the trial court should have exercised its discretion to either take his testimony about the tax and mortgage payments that he made from the Via Landini sale proceeds at "face value," or continued the hearing on the costs of the sale and reserved jurisdiction to allow Fiore the opportunity to provide the relevant translated documents at some future date. We conclude that the court did not err in declining to take either action.
As the trier of fact, the trial court was entitled to reject Fiore's testimony about tax and mortgage payments on Via Landini because that testimony was not supported by any documentary evidence. In determining credibility, the court as trier of fact may consider a witness's interest in the result of the case and may reject the witness's testimony in toto even though it is uncontradicted, as long as the court does not act arbitrarily in doing so. (Hicks v. Reis (1943) 21 Cal.2d 654, 659; Oldenburg v. Sears, Roebuck & Co. (1957) 152 Cal.App.2d 733, 742 [trier of fact is the exclusive judge of the credibility of the evidence and can reject evidence as unworthy of credence].) A litigant's failure to produce corroborating documentary evidence that is reasonably available and that "any sensible litigant would expect to have to produce" may show that the litigant's uncorroborated testimony is false. (Singh v. Holder (9th Cir. 2011) 638 F.3d 1264, 1270.)
It was not an abuse of discretion for the trial court to refuse to allow Fiore more time to produce certified translations of Italian documents that Fiore claimed would show that he had been required to pay taxes and the balance of an existing mortgage from the proceeds of the sale of Via Landini, because the court had already provided him ample time to do so. The court made it clear at trial in March 2017 that it set the July 14, 2017 hearing for the express purpose of determining the "costs of sale" of Via Landini, including the amounts of "the commission, the mortgage, and any tax liens that were paid off so that we get to a net." The court acknowledged that it might be difficult to obtain records in Italy pertaining to the 2011 sale, but warned Fiore: "[I]f you cannot, I need evidence, and I'm going to take whatever evidence there is and then make a call as to what the net proceeds seem to have been."
Despite having been given four months to produce evidence of the tax and mortgage payments that Fiore claimed to have made from the Via Landini sales proceeds, Fiore produced uncertified, untranslated documents in Italian and documents in English that were irrelevant to the issue of the net proceeds from the sale of Via Landini. The trial court did not abuse its discretion in disregarding that evidence and making its net-proceeds determination based on the other evidence presented. (See In re Marriage of Huxley (1984) 159 Cal.App.3d 1253, 1262, disapproved on another point by In re Marriage of Fabian (1986) 41 Cal.3d 440, 451, fn. 13 [court did not err in refusing to admit in evidence a document that was not certified or authenticated and was in a foreign language so that the court was unable to ascertain the meaning of its terms].)
Jimenez included the exhibits that Fiore submitted for the July 14, 2017 hearing in the record on appeal. She contends that "the documents purported by Fiore do not exist[,]" and that the documents in Italian that Fiore presented do not support his claim that he paid taxes and a mortgage from the Via Landini sales proceeds. In his reply brief, Fiore maintains that Jimenez lodged the very documents that she claims do not exist, and that her own translated document pertaining to the sale of Via Landini shows that the parties paid a tax. Specifically, Fiore asserts that the translated document shows "there was 75,500.00 euros purportedly shared and paid to the Taxes of Register when Via Landini was sold, which [Jimenez] appears to have forgotten at the time of July 14, 2017 hearing because [Jimenez] never brought this tax payment to the Trial Court's attention." Fiore argues that this evidence warrants reversal and recalculation of the net proceeds from the sale of Via Landini.
The English translation that Fiore refers to is incomprehensible. The relevant language appears to say that tax based on the value of the property in 1986 is 75,500 euros, but that is far from clear. The record does not indicate that the trial court reviewed, or was even aware of, this translated document. Fiore faults Jimenez for failing to bring the document to the court's attention, but if the document supports Fiore's position, as he claims on appeal, it was his burden to present it as evidence and explain it to the court. To the extent that the court erred by failing to review the document, the error was harmless because the document does not constitute adequate proof that Fiore paid taxes from the proceeds of the sale of Via Landini.
The translated document states in relevant part: "To the senses of the article 1 paragraph 497 of the law 23 December 2005 no. 266 and the following changes and integrations, the buyer part in it derogates to the discipline of which to the article 43 of the D.P.R. 131/1986, and done it except the application of the article 39, first paragraph, letter d ), last period, of the D.P.R. 'September 29 1973 no. 600, treating of transfer towards physical people that doesn't act in the exercise of activity commercial, artistic and professional, right justice property to use housing and relative related works, require me that the retable base, to the goals of the Taxes of Register, mortgage and the cadastral income is constituted by the value of the properties determined to the senses of the article 52 comma 4 and 5 of the mentioned D.P.R. 131/1986, in Euro 75,500.00 (Seventy five thousand dot, five hundred dot zero, zero) For the fiscal goals, they declare the parts should be proportionally shared proportionally among the single mappalis and that however the value attributed to every of them is superior to the capitalization of the relative Cadastral income according to the Coefficients foreseen by the norms of Law in vigor."
Adequacy of statement of decision
Fiore contends that the statement of decision is defective because it does not adequately address the evidence that the trial court relied on in determining Jimenez's share of the proceeds from the sale of Via Landini. Specifically, he complains that the statement of decision does not address (1) whether the court found his testimony credible; (2) what specific evidence the court considered regarding the costs of sale for Via Landini; or (3) why the court did not consider his testimony in its ultimate ruling.
"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. [Citations.] [¶] [Code of Civil Procedure s]ections 632 and 634 (both as amended in 1981) set forth the means by which to avoid application of these inferences in favor of the judgment. When the court announces its tentative decision, a party may, under section 632, request the court to issue a statement of decision explaining the basis of its determination, and shall specify the issues on which the party is requesting the statement; following such a request, the party may make proposals relating to the contents of the statement. Thereafter, under section 634, the party must state any objection to the statement in order to avoid an implied finding on appeal in favor of the prevailing party. The section declares that if omissions or ambiguities in the statement are timely brought to the trial court's attention, the appellate court will not imply findings in favor of the prevailing party. The clear implication of this provision, of course, is that if a party does not bring such deficiencies to the trial court's attention, that party waives the right to claim on appeal that the statement was deficient in these regards, and hence the appellate court will imply findings to support the judgment. . . ." (In Re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134 (Arceneaux), italics added.)
"A statement of decision need not address all the legal and factual issues raised by the parties. Instead, it need do no more than state the grounds upon which the judgment rests, without necessarily specifying the particular evidence considered by the trial court in reaching its decision. [Citations.] '[A] trial court rendering a statement of decision under . . . [Code of Civil Procedure] section 632 is required to state only ultimate rather than evidentiary facts because findings of ultimate facts necessarily include findings on all intermediate evidentiary facts necessary to sustain them. [Citation.]' [Citations.]" (Muzquiz v. City of Emeryville (2000) 79 Cal.App.4th 1106, 1124-1125 (Muzquiz), italics added.) "[T]he term 'ultimate fact' generally refers to a core fact, such as an essential element of a claim. [Citation.] Ultimate facts are distinguished from evidentiary facts and from legal conclusions." (Central Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501, 513 [75 Cal.Rptr.3d 771, 780-781].)
Applying these standards, we find no error in the trial court's statement of decision regarding the Via Landini sales proceeds. The statement of decision states the court's undisputed findings that Via Landini was community property and an omitted asset that would be "divided 50/50." The court noted that it had received evidence of the costs of the sale of Via Landini and Fiore's "proof of a separate property reimbursement for the down payment." The court then set forth the ultimate facts necessary to resolve Jimenez's omitted asset claim—namely, the gross proceeds from the sale, the reimbursement to which Fiore was entitled from the gross proceeds, and the remaining net proceeds to be divided.
The court was required to do no more regarding the division of the Via Landini sales proceeds. The statement of decision sufficiently states the grounds upon which the court's omitted asset adjudication rests; it was not necessary for the court to specify the particular evidence that it considered in reaching its decision. (Muzquiz, supra, 79 Cal.App.4th at pp. 1106, 1125.) The court was not required to state whether it found Fiore's testimony credible, specify the particular evidence it had considered regarding the costs of sale for Via Landini, or explain why it did not rely on Fiore's testimony regarding the costs of sale in its ultimate ruling. Further, Fiore's written "proposal as to content, regarding [Jimenez's] request for a statement of decision on the issues of child support and arrears[]" and his written objections to the trial court's proposed statement of decision focused solely on the court's decision regarding child support, and did not address the court's decision regarding division of the Via Landini sales proceeds. As a result, Fiore has forfeited his right to claim on appeal that the statement of decision was deficient with respect to the division of the Via Landini sales proceeds. (Arceneaux, supra, 51 Cal.3d at p. 1134.)
Presumably, the court did consider Fiore's testimony regarding the costs of sale and rejected it because it was uncorroborated by documentary evidence.
$20,068 representing overpayments of child support
Fiore contends that the trial court erred in ultimately declining to credit to him from the Via Landini sales proceeds $20,068, representing payments that he made to Jimenez in excess of the amount of court-ordered child support. The court tentatively ruled at trial that Fiore was entitled to a credit in that amount from the Via Landini sales proceeds, but ultimately denied him that credit in its statement of decision.
Fiore offers no meaningful argument as to why it was reversible error for the trial court not to award him the $20,068 credit for overpayment of child support; he simply contends that the court's ultimate decision was an abuse of discretion that exemplifies the court's failure to consider the principles of "fairness and hardship," because the court initially issued a "fair and just" decision to apply the credit to him, but ultimately changed its mind and withdrew the credit. The court's statement of decision, in Fiore's words, "failed to provide the reasons for . . . why the credits were initially provided and then withdrawn warranting a reversal of the Court's order . . . ."
Fiore's assertion that the trial court failed to explain in its final statement of decision why it decided not to award him the $20,068 credit that it tentatively awarded him in its oral ruling at trial is incorrect. In the statement of decision, the court noted Fiore's objection to the change in its order and explained: "It would be error to take payments which [Fiore] alleged were in the nature of child support, from October 2015 to present, and take away part of [Jimenez's] community asset because [Fiore] was voluntarily paying child support above the court order, and pursuant to some other agreement. [¶] [Fiore] further protests that taking away the credit is a 'windfall' to [Jimenez]. The Court does not agree. [Fiore] voluntarily made payments to [Jimenez] of child support beyond the court ordered amount. He had use of 100 [percent] of the funds from Via Landini from the time of sale to present."
Later in the statement of decision, the court returned to this issue and explained: "[W]hile a payor can request credit for overpayment of support to be applied to reduce a future support order, it is not appropriate to take an overpayment of support and deduct that from a community property asset owed to the payee. The court has concluded after further review, that [Fiore's] payments up to [Jimenez's] motion to modify cannot be considered as child support 'overpayment', and that any payments after her motion for modification were voluntary and are not open to reimbursement as the new child support order is less than the alleged overpayments."
The statement of decision adequately explains why the trial court ultimately decided not to award Fiore the $20,068 credit for child support overpayment. Because Fiore offers no argument as to why that decision is erroneous, apart from his mistaken contention that the statement of decision failed to explain it, he has not met his burden on appeal to show that the court committed reversible error.
II. Equitable Defenses
Fiore contends that the trial court erred by not applying the equitable defenses of laches and "fairness and hardship" to Jimenez's omitted asset claim regarding Via Landini, and by not applying the equitable defense of unclean hands to all of Jimenez's omitted asset claims, based on what Fiore claims is her failure to disclose property interests in Mexico. He further contends that the statement of decision is defective because it does not adequately address the court's consideration of these equitable principles.
Laches
Regarding laches, Fiore contends that the trial court's ruling regarding omitted assets is flawed in two ways. First, he argues that because the trial court initially found that laches barred Jimenez's omitted asset claims with respect to the La Jolla bank account and the Via Landini personal property, it should also have found that laches barred her omitted asset claim regarding the Via Landini sale proceeds. Fiore reasons that because Jimenez knew about Via Landini and the personal property that she had left there for a longer period of time than she knew about the La Jolla bank account, laches necessarily barred her claim regarding the Via Landini sale proceeds as well as the other two claims. Second, he complains that the court failed to address laches in its statement of decision as it applied to Via Landini.
Fiore's reasoning is flawed because the trial court did not find in its final statement of decision that laches was a complete bar to Jimenez's omitted asset claims regarding the La Jolla bank account or the Via Landini personal property; the word "laches" does not appear in the final statement of decision. The court found that laches applied to those assets only in its tentative oral ruling and proposed statement of decision. We do not review the trial court's tentative rulings. (See Guzman v. Visalia Community Bank (1999) 71 Cal.App.4th 1370, 1378 [84 Cal.Rptr.2d 581, 586 ["A tentative ruling is just that, tentative."].) In any event, we find no error in the court's rejection of Fiore's laches defense to Jimenez's omitted asset claim regarding the sale of Via Landini.
As noted ante, in its final statement of decision, the trial court denied Jimenez's omitted asset claim regarding the La Jolla bank account because it concluded that it did not have enough information from the parties to establish that the account was an omitted asset, and that Jimenez had not met her burden to present sufficient evidence to permit the court to determine the nature and value of the asset. The court ultimately denied Jimenez's claim regarding the Via Landini personal property because it found that those items were not omitted assets.
In its tentative oral ruling at trial, the court found that laches applied to Jimenez's claims regarding the La Jolla bank account and the Via Landini personal propety. The court's proposed statement of decision included the finding that "laches would apply to bar [Jimenez's] request to have the Court award [the La Jolla bank account] to her. With respect to the Via Landini personal property, the court noted that Jimenez would have known about the items that she left in Via Landini in 2011 when she signed the contract to sell it and found "laches in that she waited this long to bring this claim forward."
"Laches is an equitable time limitation on a party's right to bring suit, resting on the maxim that 'equity aids the vigilant, not those who sleep on their rights.' [Citations.] [¶] A defendant must demonstrate three elements to successfully assert a laches defense: (1) delay in asserting a right or a claim; (2) the delay was not reasonable or excusable; and (3) prejudice to the party against whom laches is asserted." (Magic Kitchen LLC v. Good Things Internat., Ltd. (2007) 153 Cal.App.4th 1144, 1156-1157 (Magic Kitchen).) "Prejudice is never presumed; rather it must be affirmatively demonstrated by the defendant in order to sustain his burdens of proof and the production of evidence on the issue. [Citation.] Generally speaking, the existence of laches is a question of fact to be determined by the trial court in light of all of the applicable circumstances, and in the absence of manifest injustice or a lack of substantial support in the evidence its determination will be sustained." (Miller v. Eisenhower Medical Center (1980) 27 Cal.3d 614, 624; City of Oakland v. Oakland Police & Fire Retirement System (2014) 224 Cal.App.4th 210, 248 ["Generally, laches is a question of fact, but where the relevant facts are undisputed, it may be decided as a matter of law."].)
We first address Fiore's claim that the trial court erred by failing to address laches in its statement of decision as it applied to Via Landini. Fiore did not ask the court to address laches in either in his "proposal as to content, regarding [Jimenez's] request for a statement of decision on the issues of child support and arrears[]" or in his written objections to the court's proposed statement of decision. He has therefore forfeited his right to claim on appeal that the statement of decision was deficient in failing to address his laches defense, and we may imply the finding that laches did not bar Jimenez's omitted asset claim regarding Via Landini. (Arceneaux, supra, 51 Cal.3d at p. 1134.) We reiterate that the trial court was not required to address in its statement of decision every legal and factual issue raised by the parties (Muzquiz, supra, 79 Cal.App.4th at pp. 1124-1125), and also was not required to discuss the evidence supporting its implied finding that the necessary facts to establish a laches defense did not exist. (Ibid.)
Because the existence of laches is a question of fact, "[g]enerally, a trial court's laches ruling will be sustained on appeal if there is substantial evidence to support the ruling." (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61, 67.) Thus, the question that Fiore raises is whether substantial evidence supports the court's implied finding that laches does not apply as a defense to Jimenez's omitted asset claim regarding Via Landini. Fiore is essentially arguing that, given the evidence presented at trial, no reasonable trier of fact could find that laches does not bar that claim. We conclude that substantial evidence supports the court's rejection of Fiore's laches defense.
To establish a laches defense, a defendant must show that unreasonable delay in bringing a claim prejudiced the defendant. (Magic Kitchen, supra, 153 Cal.App.4th at pp. 1156-1157.) Based on Jimenez's declaration in support of her second RFO and her testimony, the trial court could have reasonably found that Jimenez's delay in filing that RFO in 2015 after abandoning her first RFO in 2011 was not unreasonable. Jimenez testified that during the marriage and at the time of the divorce, Fiore told her that he owned Via Landini and she believed him. Jimenez did not list Via Landini on her schedule of assets and debts in the dissolution proceedings because she believed that she did not have an ownership interest in the property.
Jimenez first had reason to believe that she might have an ownership interest in Via Landini when Fiore's attorney sent her attorney a power of attorney to sign pertaining to the sale of Via Landini and her attorney advised her not to sign it, stating that it was "[v]ery fishy." Jimenez realized that she was a part owner of Via Landini in 2011, when she signed documents for the sale of the property in Italy and noticed that the papers showed her as a part owner. She filed her first omitted assets motion (RFO) in August 2011.
Jimenez abandoned her omitted assets motion in September 2011, as part of a verbal agreement between her and Fiore. Jimenez testified and declared that she had abandoned the motion and agreed to sign the papers for the sale of Via Landini in exchange for Fiore's agreement to buy her a house in San Diego or give her half of the proceeds from the sale of Via Landini for her to use to purchase a house. When asked why she waited until October 2015 to file her second omitted assets motion regarding Via Landini, she testified that she trusted Fiore and that "he was stringing [her] along with lies." In her trial brief, Jimenez specified September 2015 as the time when she realized that Fiore was not going to fulfill his promises under their agreement.
Based on Jimenez's testimony and declaration, the trial court could have reasonably concluded that Fiore failed to meet his burden to show that Jimenez had unreasonably delayed in bringing her omitted assets motion regarding Via Landini because (1) substantial evidence showed that Jimenez filed her first omitted asset motion regarding Via Landini promptly after she learned that she had a community property interest in the property; (2) she abandoned that motion for valuable consideration under a verbal agreement with Fiore; and (3) she filed her second omitted assets motion shortly (about a month) after she realized that Fiore was not going to perform his promises under the parties' verbal agreement.
The court could also have reasonably concluded that Fiore's laches defense failed because he did not meet his burden of showing that he was prejudiced by the four-year period between Jimenez's filing of her first and second omitted assets motions. Fiore suggests that he was prejudiced because he used proceeds from the sale of Via Landini to make payments to Jimenez under their 2011 verbal agreement. However, the court could have reasonably found that Fiore reneged on a promise to buy a house for Jimenez in San Diego or give her half of the proceeds from the sale of Via Landini to buy a house, and that the financial gain that he realized by keeping Jimenez's share of the proceeds for his own use for four years outweighed any financial disadvantage that he may have suffered by making increased child support payments and other payments to Jimenez during that period. The court did not commit reversible error in rejecting Fiore's laches defense.
Fairness and hardship
Fiore suggests for the first time on appeal that the trial court erred by failing to consider what he refers to as the "equitable factors of fairness and hardship" in ruling on Jimenez's omitted asset claim regarding Via Landini.
"Fairness and hardship" is not a discrete equitable defense; fairness and hardship are equitable principles that have been applied in a few cases in which a former spouse sought his or her community share of the other spouse's retirement benefits well after the division of marital property was final, and the reviewing court held that the claimant could be equitably estopped from being awarded such benefits retroactively where a retroactive award would be unfair and cause hardship to the pensioner spouse. (See Henn v. Henn (1980) 26 Cal.3d 323 (Henn); Hill v. Hattrem (1981) 117 Cal.App.3d 569, 574 [A trial court may grant equitable relief in determining the division of previously paid retirement benefits and principles of estoppel and due process may be relevant due to the potential hardship and unfairness of enforcing newly discovered rights when substantial reliance may have been placed upon previous law.]; Casas v. Thompson (1986) 42 Cal.3d 131, 151-152 (Casas).) In Casas, the California Supreme Court noted that "Henn instructs the trial court to apply equitable principles in determining whether to enforce by restitution a spouse's community property interest in pension payments received by the retiree spouse before partition and to what degree. [Citation.] Where the court finds no unjust result in awarding full retroactive benefits, the court may 'tailor the form of that award' to avoid placing an undue burden on the spouse ordered to pay." (Casas, at p. 152.)
The trial court in this case did not err in failing to apply the "fairness and hardship" analysis from Henn and its progeny to the adjudication of Jimenez's community property interest in Via Landini. Fiore did not expressly raise "fairness and hardship" as a distinct equitable defense or ask the court to address it in its statement of decision. His fairness and hardship argument on appeal essentially goes to the prejudice element of his laches defense. As we have discussed, the court could have reasonably found that Fiore was not prejudiced by the timing of Jimenez's second omitted asset motion. The court did not err in failing to specifically address the equitable principles of "fairness and hardship" in its statement of decision.
In his proposals for the statement of decision and objections to the trial court's proposed statement of decision, Fiore argued that "the family court is a court of equity and fairness" and that denying him the credits from the Via Landini proceeds that it had tentatively awarded him in its oral ruling at trial would result in an inequitable windfall to Jimenez.
Unclean hands
Fiore contends that the trial court abused its discretion by not applying the equitable doctrine of unclean hands to Jimenez's omitted asset claim regarding Via Landini and not revealing in its statement of decision whether it had considered unclean hands. He notes that he argued unclean hands in his "trial pleadings" based on Jimenez's failure to disclose her interests in commercial property and a radio station in Mexico during the dissolution proceedings.
"The doctrine of unclean hands is a defense to an equitable action . . . . [Citation.] It rests on the maxim that ' " 'he who comes into equity must come with clean hands.' " ' [Citation.] 'The doctrine demands that a plaintiff act fairly in the matter for which he seeks a remedy. He must come into court with clean hands, and keep them clean, or he will be denied relief, regardless of the merits of his claim.' [Citation.] Whether the doctrine of unclean hands applies is a question of fact." (Aguayo v. Amaro (2013) 213 Cal.App.4th 1102, 1110.)
Because Fiore did not ask the trial court to address unclean hands in its statement of decision and did not object to the proposed statement of decision on the ground that the court failed to address the doctrine, the court did not err in omitting any mention of unclean hands in its statement of decision, and we may imply the finding that the defense of unclean hands did not bar Jimenez's omitted asset claims. The court did not err in failing to find that Jimenez came into court with unclean hands because there was substantial evidence that she did not own, or receive money from, any property interest in Mexico. Jimenez's sister, Laura Jimenez testified at trial that their mother had left an inheritance that included the Mexican radio station and other property interests, but that Jimenez was not a beneficiary of that inheritance, and their mother had left Jimenez nothing in her will. Laura further testified that she had business interests in three or four properties in Mexico, but Jimenez was not an owner of those properties. Jimenez testified that she had no property interests in Mexico. She owned an 8.33 percent interest in a permit to run a radio station, but had received no income from the permit, and had received no money from an inheritance from her mother or from anyone else.
Although the court found that Jimenez's testimony about her income was "not entirely credible" in light of evidence that she had received checks throughout 2015 from a broadcasting business in Mexico that her sister owned, the court found that Jimenez was not employed by the radio station and was "not an owner of the station at this time." The court further found that if Jimenez's family was making gifts to her through the station, "they were not regular enough to represent 'income' under the law." It follows that Jimenez was not guilty of unclean hands in failing to report income from the Mexican radio station in the dissolution proceedings. The evidence sufficiently supports the court's implied finding that the doctrine of unclean hands did not bar Jimenez's omitted asset claims.
Moreover, "[t]he unclean hands rule does not call for denial of relief to a plaintiff guilty of any past improper conduct; it is only misconduct in the particular transaction or connected with the subject matter of the litigation which is a defense. [Citation.] The bar applies only if the inequitable conduct occurred in a transaction directly related to the matter before the court and affects the equitable relationship between the litigants." (Wilson v. S.L. Rey, Inc. (1993) 17 Cal.App.4th 234, 244, italics added.) Jimenez's alleged failure to disclose Mexican business and property interests in the prior dissolution proceedings was not directly related to the division of the community property portion of the Via Landini proceeds or to Jimenez's other omitted asset claims. Thus, even if any failure to disclose on her part could be deemed improper or inequitable, it did not support an unclean hands defense to her omitted asset claims.
JIMENEZ'S APPEAL
I. Down Payment on Via Sabatini Property
Jimenez contends that the trial court erred in rejecting her claim that Fiore used community property funds to make the down payment on the Via Sabatini property, and that she is therefore entitled to reimbursement of her share of the down payment or half of the community's interest in the property. In rejecting that claim, the court noted that Jimenez "brought forth no evidence to support her suspicion." The court continued: "It was undisputed that this property was [Fiore's] separate property, purchased post-separation. [Jimenez] provided no tracing as to any community property funds that may have been used by [Fiore] to purchase the Via Sabatini property." Jimenez argues that the court erred in placing the burden on her to trace the Via Sabatini down payment to community funds because it was Fiore's burden to trace the down payment that he made on Via Sabatini to a separate property source. We disagree.
"Appellate review of a trial court's finding that a particular item is separate or community property is limited to a determination of whether any substantial evidence supports the finding." (In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 849.) Section 771, subdivision (a) provides that "[t]he earnings and accumulations of a spouse . . . after the date of separation of the spouses, are the separate property of the spouse."
"Ordinarily, 'a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting.' (Evid. Code, § 500.) This general rule applies '[e]xcept as otherwise provided by law.' " (Ibid.) '[C]ourts may alter the normal allocation of the burden of proof' based on considerations of fairness and policy." (In re Marriage of Prentis-Margulis & Margulis (2011) 198 Cal.App.4th 1252, 1267 (Margulis).)
The Margulis court concluded that a spouse who managed community property assets "should bear the burden of proving the proper disposition of missing assets if the nonmanaging spouse makes the requisite prima facie showing." (Margulis, supra, 198 Cal.App.4th at p. 1274, italics added.) The Margulis court articulated the requisite prima facie showing as follows: "[O]nce a nonmanaging spouse makes a prima facie showing concerning the existence and value of community assets in the control of the other spouse postseparation, the burden of proof shifts to the managing spouse to rebut the showing or prove the proper disposition or lesser value of these assets." (Id. at p. 1267.)
The alleged "community assets" at issue with respect to the Via Sabatini down payment were funds under Fiore's control that he used to make the down payment. Accordingly, the requisite prima facie showing concerning the existence of community assets for Jimenez's omitted asset claim regarding Via Sabatini was a showing by Jimenez that the funds that Fiore used for the down payment were community funds. Only if Jimenez had made that showing, there would be the burden shift to Fiore to rebut that showing. (Margulis, supra, 198 Cal.App.4th at p. 1273, fn. 11.)
Jimenez did not make a prima facie showing that the funds that Fiore used to make the down payment on Via Sabatini were community funds. " 'Prima facie evidence' is defined as '[e]vidence that will establish a fact or sustain a judgment unless contradictory evidence is produced.' " (People v. Skiles (2011) 51 Cal.4th 1178, 1186 (Skiles), citing Black's Law Dict. (9th ed. 2009) pp. 638-639.) In her opening brief, Jimenez contends that the facts "give clear rise to a prima facie showing . . . that the down payment was likely made with community assets under Fiore's control post-separation . . . ." To support that contention, she cites the following "facts" or evidence: (1) the certified sales contract and mortgage agreement pertaining to Via Sabatini, obtained by Jimenez, indicate the total sale amount, mortgage loan amount, and by calculation the down payment of 47,000 EUR; (2) Fiore corroborated in his trial testimony that the down payment was between 40,000 and 50,000 EUR; (3) Jimenez claimed that Fiore was preparing to purchase Via Sabatini by applying for a mortgage several months before the date of separation; (4) Fiore failed to respond to the divorce proceedings and failed to disclose community property assets; (5) the date of purchase was only a few months after the date of separation and the divorce proceedings; (6) Fiore testified that he made the $62,430 down payment from savings; (7) Fiore asked Jimenez to sign an Italian document certifying an absence of community purchases; (8) Fiore stated on the purchase contract that he was married under a separate property regime; and (9) Fiore was the managing spouse who controlled the community assets.
Jimenez asserts that this evidence was sufficient to shift the burden of proof to Fiore to, in her words, "prove the proper disposition or lesser value of those assets." However, the prima facie showing that Jimenez had to make in order to shift the burden to Fiore to trace his down payment to separate property funds was a showing that the funds Fiore used to make the down payment on Via Sabatini were community funds earned or acquired during the marriage. The sales price of Via Sabatini and the amount of the down payment on the property do not show the source of the down payment; nor does the fact that Fiore failed to respond to Jimenez's dissolution petition and disclose community assets. Fiore's testimony that he made the down payment from savings and the facts that he purchased Via Sabatini a few months after the date of separation, asked Jimenez to sign a document certifying the absence of community purchases, and stated on the purchase contract that he was married under a separate property regime do not show that he used community funds for the down payment. That Fiore controlled the community assets during marriage is marginally relevant to whether he made the Via Sabatini down payment with community funds after separation, but that fact alone does not constitute prima facie evidence that he made the down payment with community funds-i.e., it does not establish that he used community funds for the Via Sabatini down payment, absent contradictory evidence. (Skiles, supra, 51 Cal.4th at p. 1186.)
Because Jimenez did not make the required prima facie showing, it was her burden to trace the funds used for the down payment on Via Sabatini to a community property source. She failed to meet that burden, and Fiore testified that he made the down payment from "savings." He later testified that his brother had loaned him the money for the down payment and that he repaid his brother from savings. The "savings" account in question is not identified in the record, Fiore was not asked to identify it, and Jimenez did not attempt to prove that it was a community account. Fiore's testimony constitutes substantial evidence supporting the court's finding that the funds were Fiore's separate property. Given that evidence and Jimenez's failure to present evidence tracing the funds to a community property source, the court did not err in rejecting Jimenez's omitted asset claim regarding the Via Sabatini down payment.
II. Via Landini Personal Property
Jimenez contends that the trial court erred in ruling that the personal property left at Via Landini did not constitute unadjudicated community property assets. In its statement of decision, the court noted that there was testimony regarding "a fur coat, jewelry, a community property car, and fixtures and furnishings." The court articulated two bases for its ruling that these items were not omitted assets. First, the court stated that it had not received "reliable or credible information from [Jimenez] as to the value of these personal items." Second, the court stated: "[Jimenez] would have known the [Via Landini personal property was] left behind in 2011, at the time she signed the contract for the sale of [Via Landini]. Yet in her property declaration filed with the [C]ourt on December 26, 2008, she indicates that under the categories of item 2, 'Household Furniture' and item 3, 'Jewelry, Antiques, Art and Coin Collections' NONE." Following that observation, the court found that the Via Landini personal property items were not omitted assets.
The trial court appears to have been implying that if Jimenez knew about the Via Landini personal property in 2011, she also should have known about them in 2008, but did not identify them in her 2008 property declaration or in her first omitted assets motion that she filed in 2011. As noted, the court in its tentative statement of decision reasoned that Jimenez would have known about the items that she left at Via Landini in 2011 when she signed the contract to sell it. The court tentatively found "laches in that [Jimenez] waited [until her second omitted assets motion in 2015] to bring this claim forward."
Jimenez challenges the trial court's finding that there was not reliable or credible evidence of the value of the Via Landini personal property. She notes that a schedule of assets that she apparently lodged as an exhibit (but that was not admitted at trial) provided detailed estimates of the value of the Via Landini personal property items, and that Fiore testified that he had sold a Ford Escort for 2,000 euros. She contends that because the court did not attempt to set a reasonable value for the omitted Via Landini personal property that undisputedly existed, the matter must be remanded for adjudication of those items as omitted assets. We agree.
"The trial court is required to divide the community property equally. [Citation.] On appeal, we review a ruling dividing property under the abuse of discretion standard." (In re Marriage of Quay (1993) 18 Cal.App.4th 961, 966.) "When applying the deferential abuse of discretion standard, 'the trial court's findings of fact are reviewed for substantial evidence, its conclusions of law are reviewed de novo, and its application of the law to the facts is reversible only if arbitrary and capricious.' " (In re C.B. (2010) 190 Cal.App.4th 102, 123.)
Section 2556 provides: "In a proceeding for dissolution of marriage, for nullity of marriage, or for legal separation of the parties, the court has continuing jurisdiction to award community estate assets or community estate liabilities to the parties that have not been previously adjudicated by a judgment in the proceeding. A party may file a postjudgment motion or order to show cause in the proceeding in order to obtain adjudication of any community estate asset or liability omitted or not adjudicated by the judgment. In these cases, the court shall equally divide the omitted or unadjudicated community estate asset or liability, unless the court finds upon good cause shown that the interests of justice require an unequal division of the asset or liability."
Contrary to the trial court's suggestion in its statement of decision, Jimenez's failure to identify the Via Landini personal property in her property declaration that she filed in the dissolution proceedings did not preclude her from seeking their adjudication as omitted assets under section 2556. In Henn, the California Supreme Court held that a spouse could not be collaterally estopped from litigating her community property right to a portion of her former spouse's military pension by her failure to seek adjudication of the pension in the prior divorce proceedings, which resulted in entry of a final judgment. (Henn, supra, 26 Cal.3d at pp. 328-332.) The Henn court stated: "Under California law, a spouse's entitlement to a share of the community property arises at the time that the property is acquired. [Citation.] That interest is not altered except by judicial decree or an agreement between the parties. Hence 'under settled principles of California community property law, "property which is not mentioned in the pleadings as community property is left unadjudicated by decree of divorce, and is subject to future litigation, the parties being tenants in common meanwhile." ' [Citations.] This rule applies to partial divisions of community property as well as divorces unaccompanied by any property adjudication whatsoever." (Id. at p. 330.)
"At the time the California Supreme Court decided Henn, a former spouse was required to file a new case in order to seek division of community property assets that were omitted from a dissolution judgment. [Citation.] To alleviate the burden of filing an entirely new action to divide community property previously omitted in a dissolution judgment, the Legislature enacted Civil Code former section 4353 that was later recodified without substantive change at Family Code section 2556." (In re Marriage of Huntley (2017) 10 Cal.App.5th 1053, 1059 (Huntley).)
Although generally the family court loses jurisdiction to modify a marital dissolution judgment after it has become final, "a dissolution judgment does not affect the disposition of community property as to which the judgment is silent." (Huntley, supra, 10 Cal.App.5th at p. 1059.) "In providing courts with continuing jurisdiction [to dispose of such community property], section 2556 imposes no time limit on former spouses to seek to adjudicate omitted or unadjudicated community property after a dissolution judgment was entered. . . . [A]rguments 'that a dilatory party who suffers an involuntary dismissal should be barred from the postjudgment relief available under [section 2556] are not supported by any statutory language.' [Citation.] . . . [T]here is no statute of limitations imposed by Family Code section 2556 on a former spouse who seeks adjudication of omitted or unadjudicated community property. Section 2556 also imposes no limitation for default judgments . . . ." (Id. at p. 1060.)
"Section 2556 applies even when former spouses were aware of the community property at the time the dissolution judgment was entered. . . . 'Regardless of whether the parties know of, or discuss, the [omitted asset], if the "court was not called upon to award it, and did not award it, as community property, separate property, or any property at all" [citation], then [it] is a missed asset subject to a postdissolution claim.' " (Huntley, supra, 10 Cal.App.5th at p. 1060.) "In sum, section 2556 applies to community property not actually adjudicated in the previously entered dissolution judgment. ' "The mere mention of an asset in the judgment is not controlling. [Citation.] '[T]he crucial question is whether the [community property] benefits were actually litigated and divided in the previous proceeding.' " ' " (Id. at p. 1061.)
Thus, the trial court was required to adjudicate the Via Landini personal property as omitted assets regardless of whether Jimenez was aware of them during the prior dissolution proceedings. To the extent that the court denied Jimenez's omitted asset claim regarding the Via Landini personal property based on insufficient evidence of the value of the items, the court erred. When the trial court is required to divide community property equally, the court must ascertain the value of the property to be divided. (In re Marriage of Juick (1971) 21 Cal.App.3d 421, 425 (Juick); May v. May (1969) 275 Cal.App.2d 264, 277 (May); Villafuerte v. Villafuerte (1954) 125 Cal.App.2d 466, 469 "Although, in cases where the evidence as to values is sufficient, the defect in the findings may be remedied by the appellate court or the case may be remanded for the rectification of findings [citations]; [where] there is no evidence [of values] before [the reviewing] court, the only alternative is a remand to the trial court for its augmentation of the findings." (Juick, at p. 425; accord, May, at p. 279 ["If the evidence as to value were insufficient, the case should be remanded for a new trial upon the question of the value of the community property involved."].)
Although Jimenez included in the record on appeal some evidence of the value of the Via Landini personal property in the form of a schedule of assets lodged as an exhibit, that schedule was not admitted in evidence and is insufficient, standing alone, to permit us to remedy "the defect in the [trial court's] findings" pertaining to the value of the Via Landini personal property. (Juick, supra, 21 Cal.App.3d at p. 425.) Accordingly, we will reverse the court's order denying Jimenez's claim to adjudicate the Via Landini personal property as omitted assets and remand the matter for a determination of the character and value of that property and appropriate division of any community property items.
III. Breach of Fiduciary Duty
Jimenez contends that the trial court erred in finding that Jimenez failed to present sufficient evidence of a breach of fiduciary duty as to Via Landini, and in failing to address whether he had breached such a duty as to the Via Landini personal property, and the Via Sabatini down payment. In its statement of decision, the trial court adjudicated Jimenez's breach of fiduciary duty claim only as to Via Landini, finding that Jimenez had "not met her burden in establishing that [Fiore] breached his fiduciary duty to her under . . . section 1101(a). The court then stated: "[Jimenez's] theory regarding the breach of duty is focused solely on the 'omitted asset' of the [Via] Landini property."
The court correctly limited its adjudication of Jimenez's breach of fiduciary duty claim to Via Landini because Jimenez did not put at issue a breach of fiduciary duty as to the Via Landini personal property or the Via Sabatini down payment. California Rules of Court, rule 5.92(a)(1)(A) provides that "[t]he term 'request for order' has the same meaning as the terms 'motion' or 'notice of motion' when they are used in the Code of Civil Procedure[.]" Under rule 5.92(b)(1), the RFO "must set forth facts sufficient to notify the other party of the moving party's contentions in support of the relief requested."
All subsequent rule references are to the California Rules of Court.
"[A] 'dissolution court cannot grant unrequested relief against a party who appears without affording that party notice and an opportunity to respond.' " (In re Marriage of Siegel (2015) 239 Cal.App.4th 944, 953-954, 958.) The court exceeds its jurisdiction when it issues orders that are not based on any pending motion or RFO. (In re Marriage of Gruen (2011) 191 Cal.App.4th 627, 640; Gonzales v. Superior Court (1987) 189 Cal.App.3d 1542, 1545 [A notice of motion must state the grounds upon which the motion is made, and only those specified grounds may be considered by the trial court.].)
Jimenez's omitted asset in her RFO that was tried in March 2017, included Jimenez's declaration setting forth her claims. Regarding Via Landini, Jimenez put breach of fiduciary duty at issue by requesting that the trial court award her "100% of the proceeds of the property located at Via Landini #96, 51900 PT (Pistoia), Italy. I make this request because of Respondent's fraudulent actions and false promises. He lied to me and made me rely on those false promises made by him to buy me a home in San Diego, CA. He made me do what he said at all times and he has not compensated me for my share of the property in Italy. I now request 100% of the proceeds for this reason. I rely on code section FC 1101(h) for my request."
The only other omitted asset as to which Jimenez suggested a breach of fiduciary duty in her RFO is the La Jolla bank account. Jimenez alleged in her declaration in support of her RFO that there was a balance of $12,500 in that account at the time of separation and that Fiore "fraudulently took [my community property share of] the money from me." However, on appeal Jimenez states that she abandoned her claim to a share of the La Jolla bank account because she learned, through discovery, that there were no significant community funds in the account at the date of separation.
Regarding the Via Sabatini down payment, Jimenez requested that the trial court order Fiore to prove what funds were used to purchase the Via Sabatini property in March 2009 "right after our separation[,]" and to award her community property share of the property "if it is found to have been purchased with community property funds." Jimenez did not allege that Fiore actually used community funds for the down payment on the Via Sabatini property or that he had breached his fiduciary duty to her in connection with his purchase of that property. In any event, as discussed ante, the court properly denied Jimenez's omitted asset claim regarding the Via Sabatini down payment and, accordingly, did not err in failing to find that Fiore breached a fiduciary duty with respect to the down payment.
Jimenez's omitted asset in her RFO did not include a claim regarding the Via Landini personal property. However, in her trial brief Jimenez stated: "When in August 2005 the family moved from Via Landini to the Northshore house in California, substantial community and separate property items were left behind. These omitted assets are listed in Petitioner's May 21, 2016 updated Schedule of Assets and Debts produced postjudgment and amount to $86,000 USD." Jimenez did not claim in her trial brief that Fiore had breached his fiduciary duty in connection with the Via Landini personal property.
In his trial brief, Fiore responded: "[Jimenez] claims that she left 'substantial' community and separate property items behind in Italy. Once again, she failed to disclose these on her Property Declaration, but now includes them on an updated Schedule of Assets and Debts produced post-judgment. Estimations of their value are severely inflated and Petitioner has presented no credible evidence." Because neither party raised the issue of a breach of fiduciary duty in connection to the Via Landini personal property, the court did not err in not finding that Fiore breached a fiduciary duty with respect to those omitted assets.
The trial court could properly rule on Jimenez's omitted asset claim regarding the Via Landini personal property notwithstanding Jimenez's failure to include the claim in her RFO because both parties argued the merits of the claim and Fiore did not object that he had not received notice of the claim. "The purpose of the notice requirements 'is to cause the moving party to "sufficiently define the issues for the information and attention of the adverse party and the court." ' " (Kinda v. Carpenter (2016) 247 Cal.App.4th 1268, 1277.) This purpose may be met notwithstanding deficient notice when supporting papers contain the grounds for the relief sought even though the notice of motion does not, or when "the omitted issue, or ground for relief, was raised without objection before the trial court." (Ibid.)
Breach of fiduciary duty regarding Via Landini
Regarding the sale of Via Landini, the trial court awarded Jimenez her share of the proceeds from the sale, but found that Jimenez failed to meet her burden of establishing that Fiore breached his fiduciary duty under section 1101, subdivision (a), with respect to that transaction and, therefore, declined to award Jimenez 100 percent of the sale proceeds, as she had requested. Section 1101, subdivision (a) provides that "[a] spouse has a claim against the other spouse for any breach of the fiduciary duty that results in impairment to the claimant spouse's present undivided one-half interest in the community estate, including, but not limited to, a single transaction or a pattern or series of transactions, which transaction or transactions have caused or will cause a detrimental impact to the claimant spouse's undivided one-half interest in the community estate." Jimenez argues that we should review the court's rejection of her claim de novo because the relevant facts are undisputed. Fiore responds that de novo review is improper because the facts relating to Jimenez's breach of fiduciary duty claim were disputed.
We review questions of fact under the substantial evidence test and review questions of law, which relate to the selection of a rule, de novo. (Haworth v. Superior Court (2010) 50 Cal.4th 372, 384.) " 'Mixed questions of law and fact concern the application of the rule to the facts and the consequent determination whether the rule is satisfied. If the pertinent inquiry requires application of experience with human affairs, the question is predominantly factual and its determination is reviewed under the substantial-evidence test. If, by contrast, the inquiry requires a critical consideration, in a factual context, of legal principles and their underlying values, the question is predominantly legal and its determination is reviewed independently.' " (Ibid., quoting Crocker National Bank v. City and County of San Francisco (1989) 49 Cal.3d 881, 888.)
Jimenez claims that Fiore "breached his fiduciary duty through a series of transactions[,]" and sets forth a chronological list of what she refers to as "the facts surrounding Fiore's breach of fiduciary duty[,]" including procedural facts, concerning the prejudgment and postjudgment dissolution proceedings. However, Jimenez does not clearly identify Fiore's specific actions or omissions that she claims constituted a breach of fiduciary duty with respect to the sale of Via Landini; nor does she clearly specify the resulting impairment of her one-half interest in the community property portion of Via Landini. Her claim is, essentially, that Fiore breached his fiduciary duty by attempting to conceal the community property character of Via Landini and avoid sharing with her the proceeds from the sale of Via Landini.
In summary, Jimenez contends that Fiore avoided his duty in the dissolution proceedings to disclose community property assets, including Via Landini, by not appearing in the dissolution proceedings, which resulted in a default judgment. Fiore purchased Via Landini by himself during the marriage and stated on the purchase contract that he was single, but when he wanted to sell the property in 2011, Jimenez's signature was required for the sale under Italian law. Fiore attempted to get Jimenez to sign a power of attorney that would allow him to sell the property without her signature, but she refused to sign the power of attorney, consulted an attorney, learned that Via Landini was an omitted community property asset, and proceeded to file her first motion to adjudicate the property as an omitted asset. However, Jimenez later abandoned that motion as part of an oral settlement agreement with Fiore under which she claims he agreed, among other things, to purchase a new home for her in San Diego or convey her share of the Via Landini proceeds to purchase a home. When Jimenez finally realized in 2015 that Fiore was not going to perform his part of the oral settlement agreement, she filed her second motion seeking adjudication of Via Landini as an omitted asset. In response to that motion, Fiore contended that Via Landini was his separate property, but later conceded that it was a community asset.
Fiore stated in his trial brief: "The Via Landini property in Italy was purchased with [Fiore's] separate property funds. However, it was purchased during marriage, thus making it quasi-community property. There was never a signed writing during marriage that made the property exclusively [Fiore's]." At trial, Fiore testified that he did not know whether Via Landini was community or separate property.
In short, Jimenez claims that Fiore breached his fiduciary duty by concealing from Jimenez her community property interest in Via Landini and claiming that Via Landini was his separate property, not performing his part of the oral agreement pursuant to which she abandoned her first omitted asset motion regarding the property, and requiring her to litigate to obtain her share of the proceeds from the sale of Via Landini. Jimenez argues that our de novo review of the undisputed facts would, in her words, "involve a finding of clear and convincing substantial evidence of fraudulent and/or oppressive breach of fiduciary duty, or a high probability of truth of the facts."
Courts have explained that the clear and convincing evidence standard " 'requires a finding of high probability. The evidence must be so clear as to leave no substantial doubt. It must be sufficiently strong to command the unhesitating assent of every reasonable mind.' " (Copp v. Paxton (1996) 45 Cal.App.4th 829, 846.)
The question on appeal is whether, given these facts, the trial court could have reasonably found that Jimenez failed to prove that Fiore breached his fiduciary duty under section 1101, subdivision (a). In its statement of decision, the court cited evidence pertaining to Jimenez's breach of fiduciary duty claim and the procedural background of the claim. The court noted Jimenez's testimony that she had trusted Fiore and that she did not discover that she was on the title to the Via Landini property until 2011, when Fiore asked her to sign the power of attorney regarding the property. The court also noted Jimenez's testimony that when she flew to Italy and signed paperwork for the sale of Via Landini in September 2011, she learned she was an owner of the property, or at least that her signature was required to sell it. Jimenez believed that Fiore deposited the sale proceeds in a bank account. The court observed that Jimenez had filed her first omitted asset motion in 2011 but that it was taken off calendar because she did not appear.
The court cited the evidence that Fiore had purchased Via Landini as a single man, and Fiore's testimony that he did so to avoid having to have documents translated from Spanish to Italian to establish his marriage under Italian law. The court also noted Fiore's testimony that he was not sure who owned Via Landini under Italian law, and Jimenez's claim that Fiore had always told her that under Italian law, he owned the property. The court then stated: "The question before the [C]ourt is whether this evidence is evidence of Husband's attempt to 'impair' wife's one-half interest in the home. The court finds that this evidence does not support that conclusion."
Substantial evidence supports the trial court's conclusion that Jimenez did not meet her burden under section 1101, subdivision (a) to show that Fiore impaired her community property interest in Via Landini. Via Landini was not subject to division as a community property asset until there were sale proceeds to divide, and Jimenez asserted her community property interest in Via Landini before it was sold. She filed her first omitted asset motion in August 2011 and the property was sold on September 7, 2011. Presumably, the court would have ruled in 2011 that the Via Landini proceeds were in part community property and divided them if Jimenez had not voluntarily abandoned her first motion seeking that division under an oral settlement agreement with Fiore. Because she asserted her right to her community property share of the Via Landini proceeds in court before Via Landini was sold, and ultimately obtained her share of the proceeds, Jimenez cannot be heard to complain that Fiore impaired her interest in Via Landini.
Although Fiore's fiduciary duty to Jimenez may have obligated him to disclose all community property under his control if he had responded to Jimenez's dissolution petition and appeared in the dissolution proceedings before entry of judgment, we are aware of no authority supporting the proposition that a spouse breaches his or her fiduciary duty under section 1101, subdivision (a), by failing to appear in a dissolution proceeding and allowing the other spouse to proceed by default. In any event, Fiore's failure to identify Via Landini as community property during proceedings before it was sold did not impair or detrimentally affect Jimenez's interest in the property; nor did his unsuccessful request that she sign a power of attorney that would have enabled him to sell the property without her signature.
Jimenez suggests that Fiore impaired her interest in Via Landini by not performing his promise under their oral agreement to either use the proceeds from the sale of the property to purchase a house for her in San Diego or to share the proceeds with her. However, as the trial court noted in its statement of decision, the parties presented conflicting testimony about the terms of their agreement (or agreements) and the court was unable to make definite findings regarding the actual terms of an agreement. The court stated: "Once [Jimenez] became aware that she could have a community interest in the property, there is substantial evidence that [she] and [Fiore] at various times were entering into agreements (without counsel) post-sale of the property as to how their post-dissolution financial affairs would be arranged. There was testimony that he helped her with a bankruptcy; that he agreed to pay her more child support in exchange for the Landini property, and that he was going to help her buy another home. This testimony was ambiguous as to the end result, but the Court believes that each party was negotiating various financial arrangements in part because each was aware that there were assets related to the Via Landini property that had not been distributed to [Jimenez]." (Italics added.)
Based on the evidence, the trial court reasonably declined to find that Fiore breached a contractual promise to share the Via Landini proceeds with Jimenez, limiting its finding regarding the parties' settlement agreement to the fact that they had negotiated "various financial arrangements," in part to settle Jimenez's motion to adjudicate Via Landini as an omitted community property asset. Although the court was not able to make definite findings regarding the terms of the agreement, it could have reasonably found that Fiore relied on the agreement and believed that he was performing his part by paying Jimenez more in child support than the court-ordered amount, buying her a vehicle, and giving her additional money for her bankruptcy case and to pay off personal debt. In any event, Jimenez's failure to obtain her share of the Via Landini proceeds under her agreement with Fiore did not impair her interest in Via Landini because the court ultimately awarded Jimenez her share of the sale proceeds.
Similarly, Fiore's claim in the litigation that Via Landini was his separate property did not impair Jimenez's interest in the property because, at the conclusion of the proceedings, the court ruled that Via Landini was community property. Moreover, Fiore's litigation position cannot serve as the basis for Jimenez's claim of breach of fiduciary duty because communication of a defense to an adverse party in the course or in anticipation of litigation is absolutely privileged under Civil Code section 47, subdivision (b). The litigation privilege under that statute "applies to any publication required or permitted by law in the course of a judicial proceeding to achieve the objects of the litigation, even though the publication is made outside the courtroom and no function of the court or its officers is involved." (Silberg v. Anderson (1990) 50 Cal.3d 205, 212.) "The usual formulation is that the privilege applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that have some connection or logical relation to the action." (Ibid.) The privilege "is absolute and applies regardless of malice." (Jacob B. v. County of Shasta (2007) 40 Cal.4th 948, 955-956.) "Case law is clear that section 47(b) absolutely protects litigants and other participants from being sued on the basis of communications they make in the context of family law proceedings." (Wise v. Thrifty Payless, Inc. (2000) 83 Cal.App.4th 1296, 1302.) Accordingly, Fiore cannot be held liable for breach of fiduciary duty based on his litigation position that Via Landini was his separate property. The court did not err in rejecting Jimenez's breach of fiduciary duty claim regarding Via Landini.
Civil Code section 47, provides in relevant part: "A privileged publication or broadcast is one made: [¶] . . . (b) [i]n any . . . [¶] . . . judicial proceeding, [¶] . . ."
IV. Modification of Child Support
Jimenez contends that the trial court erred by insufficiently modifying Fiore's monthly child support payments from $1,190 to $1,237 and by denying retroactive modification under section 3653.
In February 2010, the court ordered Fiore to pay Jimenez child support of $1,190 per month. In her October 2015 RFO seeking adjudication of omitted assets, Jimenez requested guideline child support retroactive to October 8, 2015, the date she filed the RFO. On December 6, 2016, Jimenez filed an RFO in pro per requesting modification of child support retroactive to October 8, 2015, and back child support.
In her declaration filed with her December 2016 RFO, Jimenez stated that Fiore had falsely claimed on his tax returns and income and expense declaration that he earned $2,000 per month. Jimenez maintained that Fiore's business tax returns, bank statements, and other financial documents showed that he earned $15,000 per month or more, and that the previous order awarding her child support of $1,190 per month "was the result of not knowing his true income." The trial court ultimately set the December 2016 RFO to be heard on March 16, 2017, concurrently with the trial on Jimenez's omitted assets RFO.
In its statement of decision, the trial court ordered Fiore to pay monthly child support in the amount of $1,237, effective April 1, 2017. The court denied Jimenez's request to make the support order retroactive to October 8, 2015, the date she filed her RFO requesting modification of child support. The court found "good cause to make the order retroactive as of April 1, 2017."
We review a child support order for abuse of discretion and, in doing so, determine whether substantial evidence supports the factual findings made in connection with the order. (In re Marriage of Alter (2009) 171 Cal.App.4th 718, 730.) In applying the abuse of discretion standard, we do not substitute our judgment for that of the trial court; we consider only whether any judge reasonably could have made the order. (Id. at pp. 730-731.) However, the court must follow established legal principles in exercising its discretion, and we apply the independent or de novo standard of review in determining whether it did so. (Ibid.) We also apply de novo review to issues of statutory construction and questions of law presented on undisputed facts. (Id. at p. 732.)
"An order of child support 'may be modified or terminated at any time as the court deems to be necessary.' (§ 3651, subd. (a).) Statutory procedures for modification of child support 'require a party to introduce admissible evidence of changed circumstances as a necessary predicate for modification.' " (In re Marriage of Leonard (2004) 119 Cal.App.4th 546, 556 (Leonard).) " 'Ordinarily, a factual change of circumstances is required [for an order modifying support] (e.g., increase or decrease in either party's income available to pay child support).' [Citation.] 'There are no rigid guidelines for judging whether circumstances have sufficiently changed to warrant a child support modification. So long as the statewide statutory formula support requirements are met [citation], the determination is made on a case-by-case basis and may properly rest on fluctuations in need or ability to pay.' [Citations.] The ultimate determination of whether the individual facts of the case warrant modification of support is within the discretion of the trial court. [Citation.] The reviewing court will resolve any conflicts in the evidence in favor of the trial court's determination. (Ibid.)
Finding of good cause to deny retroactive modification of support
Section 3653, subdivision (b) provides: "If an order modifying or terminating a support order is entered due to the unemployment of either the support obligor or the support obligee, the order shall be made retroactive to the later of the date of the service on the opposing party of the notice of motion or order to show cause to modify or terminate or the date of unemployment . . . , unless the court finds good cause not to make the order retroactive and states its reasons on the record." This provision "requires the court to make retroactive the order modifying or terminating support due to the parent's unemployment, unless it makes a specific finding of good cause and specifies on the record its reasons for denying retroactivity." (Leonard, supra, 119 Cal.App.4th at p. 557.)
Jimenez argues that the trial court was required to make the child support modification order retroactive to the date of her unemployment in November 2015 under section 3653, subdivision (b), because she was unemployed, and contends that the court's finding of good cause to deny retroactivity was inadequate. We agree that the trial court was required under section 3653, subdivision (b), to either make its child support modification order retroactive to the date of Jimenez's unemployment or state on the record its reasons for finding good cause to not make the order retroactive. We conclude that, contrary to Jimenez's contention, the court's finding of good cause to deny retroactivity was sufficient.
Although the trial court found, in its statement of decision, that Jimenez's testimony about her income was "not entirely credible, as there was evidence presented that she had received numerous checks throughout 2015 from a broadcasting business in Mexico owned by her sister[,]" the court also found that Jimenez was not employed by the radio station and that she was "not an owner of the station at this time." The court further found that Jimenez "had no income during the period from October 2015, forward." These findings amount to a finding that Jimenez was unemployed; therefore, the court was required to state its reasons for finding good cause to not make its order modifying child support retroactive.
In considering the meaning of "good cause" in section 3653, subdivision (b), the Leonard court recognized "the fundamental purpose of our statutes concerning child support obligations" and noted that "the statewide uniform guideline for support 'seeks to place the interests of children as the state's top priority.' (§ 4053 subd. (e).) In the context of this state's high standard of living and high cost of child-rearing, '[c]hild support orders must ensure that children actually receive fair, timely, and sufficient support.' (§ 4053, subd. (l)." (Leonard, supra, 119 Cal.App.4th at p. 559, fn. omitted.)
Other statutory principles to be considered "in reviewing a trial court's finding of good cause under section 3653(b) include: 'A parent's first and principal obligation is to support his or her minor children according to the parent's circumstances and station in life' (§ 4053, subd. (a)); '[b]oth parents are mutually responsible for the support of their children' (§ 4053, subd. (b)); and '[e]ach parent should pay for the support of the children according to his or her ability.' (§ 4053, subd. (d).) 'The guideline takes into account each parent's actual income and level of responsibility for the children.' (§ 4053, subd.(c).) Further, '[c]hildren should share in the standard of living of both parents.' (§ 4053, subd. (f)[.].)" (Leonard, supra, 119 Cal.App.4th at p. 559.)
The Leonard court concluded that " 'good cause' under section 3653(b) requires the court to make a good faith finding that nonretroactivity is justified by ' "real circumstances, substantial reasons, [and] objective conditions." ' [Citation.] A determination under section 3653(b) that there is good cause to make nonretroactive the modification or termination of a prior child support order must give due consideration to the above stated statutory principles concerning child support." (Leonard, supra, 119 Cal.App.4th at p. 559.)
The trial court sufficiently articulated real circumstances, substantial reasons, and objective conditions that justified its decision to deny retroactivity. The court found that "[t]he needs of the children were being met since October 8, 2015, as the evidence was that [Fiore] was overpaying support, even above the new court order of $1,237." The court noted that "[t]he parties appeared to have entered into some oral agreements as to support[,]" and found that "the children's best interests were being met during the period from October 2015 to the effective date of this order of April 1, 2017."
The trial court found that "[t]he evidence on the child support payments and side agreements was quite convoluted and contradictory. It was uncontroverted that there was no written agreement as to the Court's order of $1,190 on February 9, 2010." The court concluded that "[a]lthough it is unclear exactly what, if anything, the parties may have agreed to, it was uncontroverted that [Fiore] had for many months paid more than the Court[-]ordered $1,190."
Specifically, the trial court found that Fiore "made overpayments to [Jimenez] over the $1,190 child support order, pursuant to out of court oral agreements between [the parties]. The evidence was that [Fiore] was making child support payments of at least $1,300 a month up until March 2017. And he was making additional payments on behalf of [Jimenez]. These included payments for rent, for [Jimenez's] mortgage, for travel to Italy, [Jimenez's] non court-ordered attorney fees for her bankruptcy, and other items arguably benefitting the children." The court's findings that Fiore provided financial support to Jimenez, including payments for housing costs and at least $1,300 per month for child support until the time of trial, and that the needs of the children had been met since October 2015 (when Jimenez filed her initial request to modify child support), sufficiently support its finding of good cause to not make the support modification order retroactive past April 1, 2017.
Amount of child support modification
In its statement of decision, the trial court used Fiore's "stated average monthly [income] of $4,000, on his March 3, 2017 income and expense declaration, as his income available for child support[,]" and ordered Fiore to pay monthly child support in the amount of $1,237, effective April 1, 2017. Jimenez contends that the increase of Fiore's monthly child support payments from $1,190 to $1,237 is insufficient because it is based on the erroneous finding that Fiore earned only $4,000 per month. Jimenez claimed that Fiore earned at least $15,000 per month as shown by his business tax returns, bank statements, and other financial documents. We conclude that there is substantial evidence to support the court's finding that Fiore's income was $4,000 per month.
The trial court observed that Fiore's "income was difficult to ascertain," but presumed that his tax returns were correct and noted that his "income and expense declaration was presented under penalty of perjury." After referencing certain deficiencies in Fiore's income and expense declaration, the court explained that "[w]ith limited reliable information from each party, [it] relied upon the corporate tax returns and [Fiore's] income and expense declaration." Using Fiore's "stated average monthly [income] of $4,000, on his March 3, 2017 income and expense declaration, as his income available for child support[,]" the court ordered Fiore to pay monthly child support in the amount of $1,237, effective April 1, 2017. The court noted that it made a child support guideline order based on the evidence before it "and considering the credibility of the testimony received[.]"
The trial court was entitled to rely on Fiore's tax returns as evidence of his income. "A parent's gross income, as stated under penalty of perjury on recent tax returns, should be presumptively correct. [Citation.] Returns are, after all, ultimately enforced by federal and state criminal penalties. Hence it is not surprising that tax returns are the core component of determinations under the [child support] guideline formula." (In re Marriage of Loh (2001) 93 Cal.App.4th 325, 332.) Similarly, the court was entitled to rely on Fiore's March 2017 income and expense declaration, which he signed under penalty of perjury, as substantial evidence of his income. (See In re Marriage of Paulin (1996) 46 Cal.App.4th 1378, 1382 [substantial evidence supported father's hardship deduction where income and expense declaration showed father's total monthly expenses and net monthly disposable income before payment of child support]; In re Marriage of Wolfe (1985) 173 Cal.App.3d 889, 895.)
Further, Fiore testified that his income was less than $2,000 per month at the time of trial, and that the income of $4,000 per month stated on his recent income and expense declaration was the amount that he used to make. He testified that he used credit cards and all of his savings to pay expenses. When asked whether he had provided proof of his credit card statements, Fiore responded that he thought he had. Regarding that testimony, the court stated in the statement of decision: "On cross-examination, [Jimenez's] counsel established that [Fiore] has had expenses, including travel to Italy with the two teenage daughters, well beyond his income. But when he answered that he had used savings and credit cards to pay these expenses, [counsel] asked why he hadn't produced those credit card statements to show that he has used them. While this raised an inference that [Fiore] had more money than he indicated on his income and expense declaration, the inference is not persuasive to the Court." In other words, the court found Fiore's testimony credible.
Jimenez complains that the trial court disregarded her evidence of Fiore's true income, including evidence of his bank deposits, and dismissed her profit-loss analysis of Fiore's income and expense flow through his business checking account. The statement of decision reflects that the court considered this evidence. The court stated: "[Jimenez] asked the court to rely upon evidence of [Fiore's] 2016 tax return for CLS, or in the alternative, total deposits into his bank accounts, to calculate his income. The 2015 tax return showed gross receipts for the business of $114,419. The taxable income reported on the tax return for the corporation was $22,310. This is much less than even the $4,000 per month that [Fiore] represented as his monthly average income. [Jimenez] attempted to provide the court with a ledger that showed the expenses [Fiore] had incorrectly deducted from his business income. The ledger did not clearly sync to the tax return for the business, and was not helpful to the Court in making an income determination. As for the gross deposits to [Fiore's] bank account in 2016 of $122,265, the gross deposits, even if all business income, do not equate to income available for support. [Fiore] testified that he would spend about 70 [percent] of his gross receipts on business expenses. That again would leave much less than $4,000 per month in income stated on his income and expense declaration. [¶] The Court is to presume that tax returns are correct, and [Fiore's] income and expense declaration was presented under penalty of perjury."
Although the court noted certain deficiencies in Fiore's income and expense declaration, it stated that it relied on that declaration and on Fiore's corporate tax returns to determine his income available for child support. The court reasonably did so and adequately explained its reasons. That evidence sufficiently supports the court's findings regarding Fiore's income.
V. Denial of Attorney Fees and Costs Under Sections 3652 and 3667
Jimenez contends that the trial court erred in ignoring her request for attorney fees and costs under section 3652 as the prevailing party on the child support litigation. Section 3652 provides: "Except as against a governmental agency, an order modifying, terminating, or setting aside a support order may include an award of attorney's fees and court costs to the prevailing party." Because the statute provides that the court "may" award prevailing-party attorney fees, an award of such under section 3652 is discretionary.
Jimenez asserts that she was "technically the prevailing party" as to the order modifying child support, even though the order only slightly increased support. She notes that she requested attorney fees under section 3652 during the statement of decision process, but the court ignored her request in its statement of decision. She cites In re Marriage of Cryer (2011) 198 Cal.App.4th 1039 (Cryer) for the proposition that "[a]lthough an order modifying a support order may include an award of attorney fees to the prevailing party (see § 3652), such an award is proper only if a section 2030 need- based award is not warranted." (Id. at p. 1056.) She argues that although she was denied additional attorney fees and costs under sections 2030 and 2032, she was not awarded fees under section 3652 and "was thereby further prejudiced."
The above-quoted statement in Cryer does not mandate an award of prevailing-party attorney fees under section 3652 when need-based fees are not awarded under section 2030; rather, it simply notes that fees under section 3652 are proper only when fees under section 2030 are not warranted. Cryer cited In re Marriage of Popenhager (1979) 99 Cal.App.3d 514 (Popenhager), in which the Court of Appeal observed that "[a]n award of attorney fees in favor of a prevailing party under [the predecessor statute to section 3652], where the other party is unable to afford his or her own attorney fees, is of no value to the prevailing party. Application of [that statute] then is appropriate only in the situation where a lower court has first found that both parties to the proceeding could otherwise afford to pay their own attorney fees." (Popenhager at p. 525.) Thus, the point of Cryer and Popenhager is that prevailing party attorney fees are not properly awarded against a party who cannot afford to pay his or her own attorney fees.
Jimenez also contends that the trial court erred in ignoring her request for attorney fees under section 3667 based on the inaccuracy and incompleteness of Fiore's income and expense declarations. Section 3667 provides, in relevant part: "Upon the subsequent filing of a motion for modification or termination of the support order by the requesting party, if the court finds that the income and expense declaration submitted by the responding party pursuant to this article was incomplete, inaccurate, or missing the prior year's federal and state personal income tax returns, or that the declaration was not submitted in good faith, the court may order sanctions against the responding party in the form of payment of all costs of the motion, including the filing fee and the costs of the depositions and subpoenas necessary to be utilized in order to obtain complete and accurate information."
An award of sanctions under section 3667 is discretionary because the statute provides that the court "may" award sanctions based on a defective or bad faith income and expense declaration. Jimenez points out that the trial court noted in its statement of decision that "[Fiore's] income and expense declaration was not complete—as it did not show the source of his current stated income, at $2,000 per month. Neither did he [attach] a 2016 tax return for CLS, or provide a profit and loss for 2016, as required at Item 7."
Jimenez asked the trial court to decide whether she was entitled to attorney fees under sections 3652 and 3667 in her request for a statement of decision, and she objected to the court's failure to address her entitlement to fees under those statutes in her objections to the court's proposed statement of decision. The court's statement of decision is silent regarding those requests and the record does not otherwise indicate that the court considered them. Because Jimenez timely brought those omissions from the statement of decision to the court's attention, we may not imply findings that Jimenez is not entitled to attorney fees under sections 3652 and 3667. (Arceneaux, supra, 51 Cal.3d at p. 1134.)
The trial court's failure to exercise its discretion under a statute is in itself an abuse of discretion. (Fletcher v. Superior Court (2002) 100 Cal.App.4th 386, 392; Richards, Watson & Gershon v. King (1995) 39 Cal.App.4th 1176, 1180; In re Marriage of Sharples (2014) 223 Cal.App.4th 160, 165 (Sharples) [although a court has considerable discretion in fashioning a need-based attorney fee award, the record must show the court actually exercised that discretion], In re Marriage of Lynn (2002) 101 Cal.App.4th 120, 132 [failure to exercise discretion to award spousal support]; In re Marriage of Gray (2007) 155 Cal.App.4th 504, 515 [failure to exercise discretion to equitably apportion and divide pension benefit].) Accordingly, we will remand the matter for the trial court to exercise its discretion in expressly ruling on Jimenez's requests for attorney fees under sections 3652 and 3667.
VII. Denial of Attorney Fees Under Sections 2030 and 2032
Jimenez contends that the trial court erred in denying her request for an order augmenting the $20,000 attorney fee award that Judge Hernandez had made under sections 2030 and 2032. The court reaffirmed Judge Hernandez's October 11, 2016 order requiring Fiore to pay Jimenez attorney fees in the amount of $20,000, payable at the rate of $2,000 per month, but declined to order Fiore to pay any additional attorney fees.
Section 2030 authorizes the trial court in a dissolution proceeding to order one party to pay for the other party's attorney fees and costs. (§ 2030, subd. (a)(1).) The statute reflects the public policy of providing, " ' " 'consistent with the financial circumstances of the parties, a parity between spouses in their ability to obtain effective legal representation.' " [Citation.]' " [Citation.] The purpose 'is not the redistribution of money from the greater income party to the lesser income party,' but rather 'parity: a fair hearing with two sides equally represented.' " [¶] "In ruling on a request for fees and costs under section 2030, the court is guided by section 2032, which provides that an award of fees and costs under section 2030 may be made 'where the making of the award, and the amount of the award, are just and reasonable under the relative circumstances of the respective parties.' [Citations.] In determining what is just and reasonable, 'the court shall take into consideration the need for the award to enable each party, to the extent practical, to have sufficient financial resources to present the party's case adequately . . . .' (§ 2032, subd. (b).) In addition to the parties' financial resources, the court may consider the parties' trial tactics." (Sharples, supra, (2014) 223 Cal.App.4th 164-165 (Sharples).)
"An award of attorney fees under Family Code section 2030 is reviewed for abuse of discretion, and we therefore must affirm unless no judge reasonably could make the order." (In re Marriage of Rosen (2002) 105 Cal.App.4th 808, 829.) " '[T]he family court has considerable latitude in fashioning or denying an attorney fees award . . . .' [Citation.] However, the court's 'decision must reflect an exercise of discretion and a consideration of the appropriate factors as set forth in code sections 2030 and 2032.' " (Sharples, supra, 223 Cal.App.4th at p. 165.)
The trial court noted that Jimenez's income and expense declaration filed in March 2017 specified attorney fees in the total amount of $20,000, and that Fiore had paid Jimenez additional attorney fees over those ordered by the court. Based on its finding that Fiore's monthly self-employment income was $4,000, the court found that Fiore would be unable to make his monthly child support and attorney fee payments to Jimenez and also pay her additional fees while paying his own attorney fees. In addition, the court concluded that Jimenez had not shown a need for additional attorney fees because the total amount of her fees that she had incurred at that point in time was $20,000, and her March 2017 income and expense declaration did not indicate that she owed anything to her attorneys. The court stated that "while [Jimenez's] sister testified that [Jimenez] owed her back over $10,000 for fees, [Jimenez] did not present any promissory note indicating that these funds were in fact not a family gift."
Jimenez argues that the trial court's finding that she failed to show a need for additional attorney fees was erroneous because her obligation to repay the $10,100 loan from her sister was a need, and there was sufficient evidence, even without a promissory note, that the $10,100 was a loan and not a gift.
We agree that the absence of a promissory note reflecting that Jimenez's sister loaned Jimenez $10,100 to pay attorney fees is not sufficient evidence that the money was a gift rather than a loan, particularly in light of Jimenez's sister's declaration and testimony that the money was a loan. However, in light of our conclusion that the evidence sufficiently supports the trial court's findings regarding Fiore's income, we conclude that the court did not abuse its discretion in ruling that Fiore lacked the ability to pay any additional attorney fees that Jimenez may have incurred for the trial court proceedings, above the $20,000 in fees that Judge Hernandez had previously ordered.
VIII. Denial of Sanctions Under Sections 271 and 1101
Jimenez contends that the trial court erred in denying her request for sanctions under sections 271 and 1101. Because we have concluded that the court did not err in rejecting Jimenez's claim for breach of fiduciary duty under section 1101, we will limit our discussion to the court's denial of sanctions under section 271.
As previously noted, section 1101, subdivision (h) provides that when a breach of fiduciary duty by a spouse falls within the ambit of Civil Code section 3294, the remedy may be "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." In addition, section 1101, subdivision (g) authorizes the court to award, as a remedy for breach of fiduciary duty, "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."
Section 271, subdivision (a), authorizes the trial court to "base an award of attorney's 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 attorney's fees and costs pursuant to this section is in the nature of a sanction." Section 271, subdivision (b), provides that "[a]n award of attorney's 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."
Subdivision (a) of section 271 further provides that "[i]n 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 attorney's fees and costs is not required to demonstrate any financial need for the award."
Fiore argues that Jimenez's request for sanctions under section 271 did not comply with the notice requirement of subdivision (b) of the statute. He notes that Jimenez stated in her opening brief that she gave proper notice under California Rules of Court, rule 5.14, and asserts that rule 5.14 requires a noticed motion. Rule 5.14 is inapposite because it governs sanctions "for failure without good cause to comply with the applicable rules [of court]." (Cal. Rules of Court, rule 514(c).) Jimenez's request for sanctions under section 271 was not based on an alleged violation of a court rule.
California Rules of Court, rule 5.14(d) states that "[s]anctions must not be imposed under this rule except on a request for order by the person seeking sanctions or on the court's own motion after the court has provided notice and an opportunity to be heard."
Jimenez sufficiently complied with the notice requirement of section 271, subdivision (b). "[S]ection 271 does not specify the form of notice to be provided. . . . '[T]he only procedural requirement' is ' "notice to the party against whom the sanction is proposed to be imposed and opportunity for that party to be heard." ' " (In re Marriage of Davenport (2011) 194 Cal.App.4th 1507, 1529.) Jimenez requested sanctions under section 271 in her trial brief based largely on her claim that Fiore had "blatantly misrepresented his income and assets and has refused to adequately comply with disclosure requests." She added that Fiore's "misrepresentations and omissions in his disclosures and [income and expense declarations] regarding his income and bank accounts also constitute a failure to comply with fiduciary disclosure requirements and discovery requests." This language gave Fiore sufficient notice and opportunity to address Jimenez's request for sanctions under section 271, and he did address the request both in his trial brief and at trial. Jimenez also raised section 271 sanctions in her objections to the court's proposed statement of decision.
The court in its statement of decision erroneously stated that Jimenez asked for attorney fees as sanctions under section 271 in her October 2015 RFO.
In its statement of decision, the trial court explained that it declined to award Jimenez attorney fees as sanctions under section 271 because it found no conduct warranting sanctions. The court reiterated that Jimenez had not met her burden to show that Fiore breached his fiduciary duty by misleading her regarding the community character of Via Landini, and added that Jimenez "appeared to have used the Via Landini omitted asset claim as a way to pressure [Fiore] into making additional payments to her."
Jimenez argues that the trial court conflated section 271 sanctions with section 1101 sanctions for breach of fiduciary duty and did not actually consider her request for sanctions under section 271. We agree. The court's ruling was not responsive to Jimenez's request for sanctions under section 271 because the court apparently viewed that request to be solely related to Jimenez's breach of fiduciary duty claim with respect to Via Landini. However, the focus of Jimenez's request for section 271 sanctions was Fiore's alleged misrepresentation of his income and assets, noncompliance with discovery requests, and misrepresentations and omissions in his income and expense declarations. To the extent that Jimenez's sanction request was based on deficiencies in Fiore's income and expense declarations, it was duplicative of Jimenez's request for attorney fees under section 3667.
In her objections to the court's proposed statement of decision, Jimenez stated that ". . . section 271 sanctions differ from those in . . . section 1101. Section 271 does not apply to breach of fiduciary duty. Petitioner objects that SOD is ambiguous as to the application of the legal standard."
"We review a family court's decision to grant or deny attorney fees under section 271 . . . under an abuse of discretion standard. [Citation.] 'While sanctions are discretionary, the term judicial discretion implies absence of arbitrary determination, capricious disposition, or whimsical thinking. It imports the exercise of discriminating judgment within the bounds of reason. To exercise the power of judicial discretion, all the material facts must be known and considered, together also with the legal principles essential to an informed, intelligent and just decision.' " (In re Marriage of Tharp (2010) 188 Cal.App.4th 1295, 1316.)
The trial court did not consider the material facts relating to Jimenez's request for sanctions under section 271 and exercise its discretion regarding her specific claim of Fiore's alleged conduct warranting sanctions. Consequently, we will remand the matter for the trial court to exercise its discretion to grant or deny Jimenez's request for sanctions under section 271, together with her request for attorney fees under sections 3652 and 3667.
DISPOSITION
The order in the statement of decision filed September 5, 2017, denying Jimenez's request to adjudicate the Via Landini personal property as omitted assets is reversed. The matter is remanded to the trial court for further proceedings to adjudicate the Via Landini property items as omitted assets, to rule on Jimenez's requests for attorney fees under sections 3652 and 3667, and to reconsider her request for sanctions under section 271. The findings and orders in the statement of decision are otherwise affirmed. The parties shall bear their own costs on appeal.
AARON, J. WE CONCUR: BENKE, Acting P. J. GUERRERO, J.