The Cost of Bad Behavior in a Dissolution Proceeding
One of the most common complaints by and sources of frustration to clients during a divorce is connected to the issue of attorney’s fees: specifically, the attorney’s fees which the client does not incur by choice. Fees incurred “not by choice” usually are due to unscrupulous conduct and behavior of the other party which drive up the fees in the case, including actions of that party which may cause marital assets to decrease in value.
Litigants who are forced to incur such fees often feel that there must be some kind of recourse within the realm of family law to recoup their attorney’s fees. Family Code section 271 authorizes the court to impose attorney’s fees and costs as a sanction if a party’s conduct frustrates settlement or increases the costs of litigation. However, these sanctions are directly tied and limited only to attorney’s fees. In other words, the sanctions cannot be punitive.
In a recent Court of Appeal case from the First Appellate District, entitled Sagonowsky v. Kekoa, filed December 12, 2016, the trial court imposed over $700,000 sanctions against Ms. Sagonowsky for her actions in a “lengthy and acrimonious marital dissolution — which the trial court dubbed a ‘litigation war’.” Ms. Sagnowski appealed the trial court’s decision and challenged the sanction award to Mr. Kekoa.
While Ms. Sagonowsky never challenged the trial court’s characterization of her actions during the dissolution proceeding (which the trial court characterized as “deplorable conduct”), she did challenge the amount of the sanctions.
Ms. Sagonowsky claimed that Family Code section 271 did not authorize the trial court to award sanctions as punishment for her culpable conduct, which included her actions which caused the reduction of the sales price of a property, something she contended had no bearing on Mr. Kekoa’s attorney’s fees and costs. The Court of Appeal agreed with Ms. Sagonowsky, and reduced the sanctions award to Mr. Kekoa, because certain amounts relating to the sanction award were “untethered to attorney’s fees and costs incurred by Mr. Kekoa”.
The Court of Appeal stated that a sanctions award pursuant to Family Code section 271 is limited to attorney’s fees and costs. Thus, a court cannot award sanctions to punish a party for their culpable conduct, or impose sanctions against a party for causing a reduction in the sale price of real property. This is because those amounts bear no relation to the actual attorney’s fees and costs incurred by the other party.
While many litigants, such as Ms. Sagonowsky, may indeed be guilty of deplorable conduct during a dissolution proceeding, without directly tying such conduct to the other party’s increased attorney’s fees, the other party risks having the court deny their request for sanctions – which is exactly what occurred to Mr. Kekoa.