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Wife Loses Argument over Alimony Modification and Attorney Fees in San Diego

$7,500.00 is a lot of money for alimony (i.e., spousal support) for some people, but this is a case about a woman who settled for that amount in her divorce case but then tried to get even more money later on but lost in a case decided here in San Diego.

This case, which took 40 pages for the Court of Appeal in San Diego to decide, started with a settlement conference in front of a trial judge where the woman (Tonya) had her attorney read a settlement agreement into the record (in other words, the words everyone spoke were typed down by a court reporter). The agreement required the husband (Donald) to pay Tonya $,7500.00 per month plus 35 percent of “any gross bonuses received by [Donald], commencing August 15, 2009, and continuing thereafter until the death of either party or the remarriage of [Tonya], whichever occurs first, subject to the jurisdiction of the Court to alter, modify, or terminate this provision upon a proper showing having first made to the Court”.

A year later, Tonya sought to modify the alimony because she heard, or believed, that Donald may have received additional shares of restricted stock or stock options instead of a portion of his typical cash bonus. However, the Honorable Jeffrey Pollack denied the request to modify, finding that the parties intended “bonus” to mean year-end cash payments and not stock options. In other words, Tanya was not entitled to 35 percent of the stock options. It should be mentioned that Judge Pollack questioned Tonya about what she thought “bonus” meant back when she entered into the marital settlement agreement. (Interestingly, though, even thou she lost, Tonya was awarded $10,000.00 in attorney’s fees and costs pursuant to Family Code section 2030.)

Then, in 2013, Tonya took another crack at increasing alimony. A number of other motions were also filed, and they were all decided by a different judge, the Hon. David Oberholtzer. First, Judge Oberholtzer awarded Tonya an additional $15,000.00 in attorney fees. Then, in August, 2015, he heard the matters that resulted in the appeal here. The judge’s formal decision was issued in January, 2016.

Judge Oberholtzer noted that “the term ‘bonus’ typically refers to ‘additional remuneration paid to an employee for meeting or exceeding performance goals in the past’ and is distinguishable from stock options”. The judge also set a cap of $250,000.00 in bonus money to which the 35 percent factor could be applied.

Judge Oberholtzer, however, was affected by all the litigation that Tonya had filed and found that she had engaged in frivolous litigation. So he sanctioned her $50,000.00 pursuant to Family Code section 271 and said that amount could be paid at the rate of $25,000.00 per year in reductions in the amount of Donald’s annual bonus that he paid to Tonya as part of her spousal support. Get that?

Ruling 3-0, The Court of Appeal upheld Judge Oberholtzer’s decision. Writing for the panel, Justice William Dato noted that the term “bonus” is ambiguous, but he said that “competent evidence indicated the parties intended to use the term (bonus) in a manner consistent with the specific meaning of the term in the context of other similarly structured spousal support agreements”.

But the justices still reversed the trial court for misinterpreting the testimony of a doctor concerning Tonya’s ability to work. So there will be a further hearing still on spousal support. Stay tuned.

Finally, the justices affirmed the decision of the trial court to order Tonya’s attorney fee order against her to be satisfied directly from her spousal support.

Concurring with Justice Dato in his opinion were Presiding Justice Judith McConnell and Justice Patricia Benke. The case is entitled Marriage of Pearson, appeals case no. D070360.

Only part of the opinion was certified for publication, which means that only the certified part may be used as precedent. The part that was certified was the court’s ruling on the amount of attorney fees and the method for paying them.

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