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Beard v. Beard (11/7/97), 947 P 2d 831
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Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
EARL J. BEARD, )
) Supreme Court No. S-7533
Appellant, )
) Superior Court No.
v. ) 4FA-94-3094 Civil
)
ANNETTE M. BEARD, ) O P I N I O N
)
Appellee. ) [No. 4900 - November 7, 1997]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Mary E. Greene, Judge.
Appearances: Fleur L. Roberts, Law Offices of
Fleur L. Roberts, Fairbanks, for Appellant.
Annette M. Beard, pro se, Fairbanks.
Before: Compton, Chief Justice, Matthews,
Eastaugh, Fabe, and Bryner, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
We must decide whether, in awarding attorney's fees to
Annette Beard in this divorce action, the superior court failed to
give adequate consideration to the division of the parties'
property, the attorney's fees each party expended, and Annette's
litigation conduct. We affirm.
II. FACTS AND PROCEEDINGS
Earl Beard and Annette Beard married in 1959. The
superior court entered their divorce decree in 1995.
The court approved the parties' agreement to share legal
and physical custody of their son, born in 1978. Earl's adjusted
annual income, per his child support guidelines affidavit, was
$73,478.59. Earl was required to pay child support of $1,200 per
month while their son resides with Annette. [Fn. 1] Child support
will continue until the child reaches the age of nineteen so long
as he is unmarried and pursuing his education.
In dividing their marital property, the court considered
the parties' financial prospects, and found that "it is essential
to provide Ms. Beard with the lion's share of the assets." The
court found that Earl's earning capacity allows him to make
$100,000 a year. Apart from Earl's pension, the court awarded to
Annette assets valued at about $65,000, and awarded to Earl assets
valued at about $11,000. [Fn. 2]
The court also awarded Annette permanent spousal support,
finding it unlikely she would ever obtain meaningful employment.
Under this award, Annette receives $900 in spousal support monthly,
increasing to as much as $2,000 when Earl's child support
obligation ends.
After the parties sold the marital home, the court
allowed Annette to withdraw $2,000 from the sale proceeds to pay
attorney's fees. Annette moved for an additional attorney's fees
award of $15,000. Annette then owed her attorney a balance of
$20,270. Earl opposed the motion. The court ordered Annette's
counsel to file detailed billing records to support her fees
motion. After reviewing the records, Earl argued that the charges
were excessive or the result of Annette's own elective or vexatious
conduct.
Ruling on the attorney's fees motion, the superior court
found:
Ms. Beard engaged in conduct which greatly
increased the fees in this case: she failed to respond to the
complaint timely, she willfully violated repeated orders of the
court to vacate the family residence so it could be sold, and she
litigated and relitigated almost every issue in the case.
The court explained that if it were not for the conduct that caused
additional fees, it would grant Annette's request as made. "Due to
the conduct which unreasonably made this case more expensive,"the
court decreased the additional fees award to $11,000.
The superior court denied Earl's motion to reconsider the
award of attorney's fees. Earl appeals.
III. DISCUSSION
A. Standard of Review
An award of attorney's fees in divorce actions is within
the broad discretion of the trial court. Wright v. Wright, 904
P.2d 403, 410 n.11 (Alaska 1995). On appeal, we will not disturb
an attorney's fees award unless it appears that the trial court's
determination was manifestly unreasonable. Id.
The trial court is to follow a two-step process when
awarding attorney's fees based on vexatious conduct in a divorce
action. Wright, 904 P.2d at 410-11 (citing Kowalski v. Kowalski,
806 P.2d 1368, 1372-73 (Alaska 1991)). The court must first
determine what fee award would be appropriate based on the relative
economic situations and earning powers of the parties. Wright, 904
P.2d at 410-11. Only then may it increase the award to account for
the party's vexatious conduct. Id.
B. Whether the Superior Court Erred in Awarding Attorney's
Fees to Annette
1. The parties' relative economic situations and
earning powers
Alaska Statute 25.24.140(a) empowers the court in a
divorce action to require one spouse to pay another spouse's
attorney's fees and costs. [Fn. 3] This court has repeatedly held
that attorney's fees awards are to be based primarily on the
"relative economic situations and earning powers of the parties."
Kowalski, 806 P.2d at 1372; see, e.g., Burrell v. Burrell, 537 P.2d
1, 7 (Alaska 1975). This standard ensures that "both spouses have
the proper means to litigate the divorce action on a fairly equal
plane." Lone Wolf v. Lone Wolf, 741 P.2d 1187, 1192 (Alaska 1987).
Earl argues that the superior court did not consider the
disparate division of the parties' net marital estate, the amount
of attorney's fees each party expended, and the actual amount of
attorney's fees. Earl also argues that the uneven property
division made Annette's economic situation superior to Earl's
despite her lower earning capacity.
Annette replies that her economic situation is not
superior to Earl's because the assets she received were overvalued
and because Earl has a superior earning capacity.
The superior court did not clearly err in finding that
Earl's earning capacity is much greater than Annette's. The
superior court found that "it is quite unlikely that Ms. Beard will
ever obtain meaningful employment." The court also found that
Earl's net annual income was roughly $76,240, and that his total
earning capacity was $100,000. Accounting for expenses and
support, the court calculated that Earl would have nearly $2,000 in
disposable monthly income, while Annette would have none.
In Burrell, 537 P.2d at 76, we noted that "the parties'
relative economic situations and earning powers are relevant
factors to be weighed"in deciding whether to award attorney's fees
in a divorce case. These are not necessarily the only relevant
factors. In Johnson v. Johnson, 564 P.2d 71, 76-77 (Alaska 1977),
the trial court denied a party's fees request after finding that
the parties had expended an equal amount of fees, that they had
expended an equal amount of time and effort, and that the property
had been divided equally. Id. We noted that the expenditures and
property division bear on the parties' relative economic standing,
and that, in any event, these were reasonable factors for the trial
court to consider. Id.
Review of these factors in the present case reveals no
abuse of discretion. Annette received assets valued at about
$65,000 plus sixty percent of Earl's pension, while Earl received
assets valued at about $11,000 plus forty percent of his pension.
(Earl's appellate briefs and excerpt of record do not,
surprisingly, inform us of the total size of Earl's pension fund,
but his pension apparently did not vest until 1995.) Nevertheless,
even after the property division, Annette did not have a sound
financial situation because she had no income other than Earl's
support payments and she was supporting their son. It appears that
the parties expended attorney's fees totaling about $40,000 and
that Earl's were not significantly less that Annette's. The
property awarded to Earl had substantially less relative value than
that awarded to Annette, but the net disparity is not large in
comparison with either the total fees the parties expended or
Earl's adjusted annual income.
Earl relies on two cases in which we upheld the denial of
attorney's fees. See Johnson, 564 P.2d at 76-77 (ruling that the
superior court's denial of attorney's fees was reasonable);
Carstens v. Carstens, 867 P.2d 805, 811 (Alaska 1994) (holding that
it was reasonable to deny a motion for attorney's fees where the
spouse moving for attorney's fees had received a significant cash
settlement, but had a lower future earning capacity). Those cases
are factually distinguishable from the case now before us. In
Johnson, the court divided the property equally, and both spouses
were bankrupt. 564 P.2d at 76-77. Therefore, the parties had
comparable financial situations, and we held that the superior
court did not abuse its discretion in denying a request for
attorney's fees. Id. at 77. In Carstens, the spouse moving for
attorney's fees received an $80,000 cash buy-out plus $20,000 for
rehabilitative alimony. 867 P.2d at 810. We held that the
superior court did not abuse its discretion in determining that it
was equitable for the parties to pay their own fees where the
movant had received a large cash settlement and the other spouse
had incurred significant debt. Id. at 811.
The disparity in the Beards' earning powers is so marked
that the difference in the value of the assets awarded to each is
of comparatively little importance. Because Earl and Annette do
not have comparable economic situations, and Earl's overall
financial situation is much more secure than Annette's, the
superior court did not abuse its discretion in deciding to award
substantial attorney's fees to Annette.
2. Effect of conduct on attorney's fees award
The trial court has the discretion to increase an award
of attorney's fees if a party has acted in bad faith or engaged in
vexatious conduct. Kowalski, 806 P.2d at 1373 (citation omitted).
Conduct justifying an increased award must be such that the parties
are prevented from litigating the action on an equal plane. See
Wright, 904 P.2d at 410-11 (increased fee award justified where
husband failed to disclose marital assets and wife incurred great
costs in searching for them); Hartland, 777 P.2d at 644 (increased
fee award justified where husband "engaged in unwarranted delay");
Horton v. Hansen, 722 P.2d 211, 218 (Alaska 1986) (full award of
attorney's fees justified where husband's behavior at trial was
vexatious).
The superior court awarded $11,000 of the $15,000
requested by Annette. It justified the $4,000 reduction by
Annette's vexatious litigation conduct.
Earl argues that given Annette's conduct, the court
should not have awarded any attorney's fees to Annette. Earl
claims that because in Wright we upheld the full award of
attorney's fees on account of vexatious conduct, it was error to
award any fees to Annette. 904 P.2d at 410-11.
Earl's emphasis on Wright is misplaced. In Wright, the
superior court divided a marital estate worth several million
dollars. Id. at 405-06. The husband's concealment of large
amounts of marital funds increased litigation costs because the
wife's counsel and accountant were forced to search for hidden and
dissipated assets. Id. at 410-11. Applying an abuse of discretion
standard of review, id. at 410 n.11, we held that a $125,000 fees
award was not manifestly unreasonable. Id. at 411.
Annette's conduct was not as costly or egregious as the
husband's actions in Wright, where the wife spent approximately
$125,000 to investigate the husband's finances. Id. at 410-11.
The superior court here found that Annette had not timely responded
to the complaint, had violated repeated court orders to vacate the
family residence, and had litigated and relitigated almost every
issue. Moreover, the attorneys quarreled over discovery,
settlement negotiations, and billing records filed on the motion
for attorney's fees. Although Annette's conduct was vexatious, it
was not nearly as serious as the husband's conduct in Wright, where
the superior court remarked: "His actions bespeak those of a man
who insists on defining his own terms of fairness. [The husband's]
definition of fairness apparently does not include traditional
notions of honesty, fair play and equality." Id. at 411 n.13.
Additionally, Annette did not seek an award of full
attorney's fees, which totaled over $22,000, but moved for a
partial award of $15,000. The vexatious acts cited by the superior
court did not require the complete denial of attorney's fees to
Annette, who has few financial resources. We conclude that a trial
court may rely on a divorcing party's misconduct to reduce or deny
an otherwise appropriate fees award, under authority of AS
25.24.140(a)(1) and Kowalski, 806 P.2d at 1373. Given the
circumstances presented here, the superior court did not abuse its
discretion by reducing Annette's attorney's fees award rather than
altogether denying any award. [Fn. 4]
IV. CONCLUSION
For these reasons, we conclude that the superior did not
abuse its discretion by awarding $11,000 in additional attorney's
fees to Annette.
AFFIRMED.
FOOTNOTES
Footnote 1:
Child support for one child is twenty percent of the non-
custodial parent's adjusted annual income. Alaska R. Civ. P.
90.3(a)(2)(A). Absent a showing of good cause, this percentage
does not apply to that part of the non-custodial parent's adjusted
annual income that exceeds $72,000. Alaska R. Civ. P. 90.3(c)(2).
The superior court calculated Earl's child support as if he had an
adjusted annual income of $72,000.
Footnote 2:
Annette received numerous household and personal items; Earl's
Alyeska savings and investment account accrued through March 1,
1995; sixty percent of Earl's pension plan; and approximately sixty
percent of the net proceeds from the sale of the marital home. The
court valued these assets at $65,001.12 (not including Earl's
pension). Earl received some personal items; his truck; forty
percent of his pension plan; approximately forty percent of the net
proceeds from the sale of the marital home; and all of the marital
debt. The court valued these assets at $11,187.30 (again not
including Earl's pension).
Footnote 3:
AS 25.24.140 states in pertinent part:
(a) During the pendency of the action, a
spouse may, upon application and in appropriate circumstances, be
awarded expenses, including
(1) attorney fees and costs that
reasonably approximate the actual fees and costs required to
prosecute or defend the action; in applying this paragraph, the
court shall take appropriate steps to ensure that the award of
attorney fees does not contribute to an unnecessary escalation in
the litigation.
Footnote 4:
Annette has not cross-appealed on a theory that the superior
court abused its discretion by taking her litigation conduct into
account in awarding attorney's fees of $11,000, rather than the
$15,000 she had requested.
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