Trusts and Estates

In re Marriage of Nakamoto & Hsu

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79 Cal.App.5th 457
Filed May 4, 2022; certified for publication June 2, 2022
Fourth District, Div. Three

By Golnaz Yazdchi
Sheppard Mullin Richter & Hampton LLP 

Headnote: Attorneys’ Fees

Summary: Attorneys’ fees properly denied to party in dissolution proceedings on needs-basis, where the party over litigated the case and failed to show reasonable grounds to appeal.

Hsu sought an award of attorney’s fees based on need in his dissolution proceedings. The underlying dispute at issue was between Hsu and his two siblings concerning a handwritten agreement resolving the family’s disputes concerning their parents’ estate.  Under the handwritten agreement, Hsu was to be paid $4 million.  Months after signing the handwritten agreement, Hsu and his siblings executed a formal compromise agreement that set forth many of the terms of the handwritten agreement, but omitted the $4 million payment.  Hsu joined involuntarily his siblings and several business entities they own to the dissolution proceedings.   Hsu and his spouse claimed Hsu never received the $4 million, which would be a community asset under a transmutation agreement, which Hsu’s siblings disputed.  The siblings prevailed in the lower court on their assertion that the handwritten agreement was not a binding contract.  Hsu was awarded certain attorneys’ fees on the basis of need from the joined third parties (his siblings and others) throughout the proceedings, but when the trial concerning the enforceability of the handwritten agreement exceeded Hsu’s three-day estimate, Hsu was denied additional fees for the trial and appeal because he over-litigated the case and incurred unnecessary fees and had no reasonable grounds to appeal.

The appellate court affirmed.  Spouses are entitled to request need-based attorney fees in dissolution proceedings from joined parties before, during, or after trial, so long as the fee request is just and reasonable under the relative circumstances of the respective parties.  Though most of Hsu and his spouse’s requests were at least partially granted, substantial evidence supported the denial of additional fees on the grounds that Hsu over-litigated the case, and that he failed to show reasonable grounds to appeal.  Examples included Hsu incurring trial time to challenge (1) the authenticity of documents and events, which in the end he conceded, and (2) that any consideration was given to him for the formal compromise agreement, which the court found to be not credible, misleading, and even false.

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