Marriage of Kahn - Self-Represented Parties, Discovery Sanctions and Indio Divorce Attorneys

Marriage of Kahn (2013) 215 Cal.App.4th 1113 -

Don't Think You Can Get Away With Discovery Game Playing By Becoming Self-Represented!

Or "How to Avoid Divorce Trance for Lawyers Who Represent Difficult Litigants" (I.e., "Run!")

This is a fun case to report, since it carries with it the names of a number of local attorneys, some of whom I have a high opinion of. It was released on April 26, 2013 and I've finally found time to get back to it.

Note as of September 10, 2013 - portions of the decision discussed herein have been decertified and stricken from the published decision. Therefore, I upload the original decision here which you can otherwise no longer find. However, please note that the decision is now far more limited as citable authority than it was originally.

The Palm Springs and Palm Desert area family law attorneys who are named in this decision are:

• Kira L. Klatchko and Douglas S. Phillips, outstanding appellate lawyers who came in on behalf of serial attorney litigant Robert S. Kahn, the Appellant Husband, after the bells had already been rung at the trial court level;
• Richard C. Houghton, also a smart attorney who represented the wife in this case, Jessie A. Kahn, throughout the proceedings;
• Attorney Thomas M. Stefanelli, a very honorable and well-liked gentleman who was Robert Kahn's attorney at the time Robert began the manipulative legal odyssey that would wind up with his name forever being associated with the textbook definition of "recalcitrant divorce litigant" (and Stefanelli had the foresight to "run!");
• Attorney Bertrand Cottle, whom I do not know; and
• Attorney B. Palmer Riedel, who runs a website called "AggressiveAdvocate.com" which website is probably what one day caught Robert's eye. Hopefully if this website catches your attention, you'll have a different impression of what you might attempt.

The Kahn decision is lengthy, spanning twenty-seven pages as it outlines an egregious fact situation on behalf of Robert - who sounds to have been filled with much bitterness following the break-up of his 48 year marriage, and an attitude of "make-me!"

Presumably, both Robert and Jessie are in their 70's or older. What is clear for Jessie is that Robert wasn't going to give her an inch, or a penny, of a significant community estate which Robert evidently controlled at the time of separation (and which he claimed he'd given to his girlfriend following the parties' separation). Evidently, neither party had any separate property by this time. I have ceaselessly and recently written over the years of the EnlightenedDivorceBlog™ about the horrors of financial power imbalances that are intended to, and often do have the effect, of wearing the less financially "out-spouse" out - most recently in my Blog about a San Diego couple in Marriage of Georgiou.

In the business, divorce lawyers refer to this as "starving the other party out." It happens all the time, in part because family law judges let obstreperous parties get away with it by hesitating to award significant deterring monetary or evidentiary sanctions or to recognize that fiduciary duties underpin every aspect of the California community property law system - it takes a lot of money and staying power for family law litigants to expose this conduct in ways that creates positive remedies in their favor. Riverside Appellate Justice L. Richli alludes to these fiduciary obligations in this recently published decision from the Fourth Appellate District, Division Two, which perhaps will serve as a useful reminder to our family court Indio bench officers.

• Husband claimed the parties' CP assets had disappeared or were worthless, either in discovery or in his Preliminary Declaration of Disclosure.
• Wife filed a motion for the appointment of a receiver, which was granted. Robert refused to cooperate with the receiver's management of a Beverly Hills building that Robert admitted to have an interest in, but which he claimed operated at a loss. Indeed, Robert insisted his only income was $570 from Social Security.
• On April 23, 2009, Jessie's attorneys served basic Family Law Form Interrogatories and a Request for Production of Documents. Robert was self-represented at that time but the next day he hired Thomas M. Stefanelli. Stefanelli requested and received an extension of time, advising he was meeting with Robert and promising responses shortly. Undoubtedly, Robert refused to cooperate with Stefanelli.
• On July 14, 2009, wife filed a motion to compel. Shortly thereafter, and not surprisingly because Stefanelli is not a guy who will continue with a dishonorable client, he substituted out of the case.
• No opposition was filed to the motion to compel. On August 19, 2009, Judge Lawrence Best ordered Robert to respond within 30 days. The trial court did not state that all objections were waived as a result of its order, but per C.C.P. sections 2030.290(a) (interrogatories) and section 2031.300(a) (document productions), all objections are deemed waived by operation of law when there is no response to these forms of discovery.
• Robert remaining missing in action, ignoring the Court's order.
• On December 1, 2009, Jessie through Attorney Houghton filed a motion to strike Robert's responsive pleading, which would have the effect of making the case a default dissolution. On December 14, 2009, Robert hired Attorney Bertrand Cottle. Cottle appeared at a hearing on December 17, 2009, assuring the Court that responses were forthcoming. Based upon that representation, the hearing on the motion for terminating sanctions was continued.
• Next, without responding, on April 13, 2010 Robert substituted Attorney B. Palmer Riedel in place of Cottle.
• On December 17, 2009, the Court had appointed a receiver. On April 20, 2010, the receiver filed his reported that Robert had refused to turn any books and records over, claiming a Fifth Amendment privilege and privacy rights, and further stating that Robert had interfered with the receiver's work with building tenants.
• In opposition to the continued motion for terminating sanctions, on April 23, 2010 through attorney Riedel Robert filed a declaration alleging that he'd been unrepresented after Stefanelli fled the case until Cottle came on board, and asserting he'd fallen down a flight of stairs in July, 2009, by which he "injured" his back. Supposedly he was "not ambulatory" until November 24, 2009. Gosh!
• Further, he claimed, the IRS was investigating him for back taxes amounting to $250,000 (huh) and that if he had produced the records then his constitutional rights to avoid self-incrimination with regard to IRS.
• Further, and I love this one, Robert claimed he'd actually verified the required discovery responses in March, 2010 with Attorney Cottle but that Attorney Cottle had "for some reason" failed to serve them. I mean, if you gotta blame somebody, blame your last attorney, right?
• When Attorney Riedel realized that Cottle had not served the responses, he served them "immediately". The appellate decision specifically notes that Robert's declaration failed to attach those "responses".
• Jessie's Reply paperwork did attach those responses, which turned out to be bogus. They contained a signature block for Cottle, but neither Cottle or Riedel had signed off on them. Why would that matter? Robert's "responses" to the interrogatories included objections that had been waived by their untimeliness months before; objections must be signed by attorneys, when a party has one. So too the responses to the production demand. The un-objected to responses were themselves evasive and useless. (Where have I seen this before?) Essentially, Robert's "responses" were utterly worthless claiming, for instance, that he had no documents responsive to any of the requests - Robert agreed to produce one document in answer to 43 requests.
• On May 14, 2010, Robert filed by Attorney Riedel Points and Authorities with a bunch of novel legal theories. These included (1) that Jessie's motion was not supported by evidence; (2) that Robert "had valid reasons for not timely" responding; (3) Robert had now responded; and (4) terminating sanctions would violate due process. He actually had a few valid points, as it turned out, at least for purposes for appeal but maybe not on the next go-around.
• On July 15, 2010, the trial court hammered Robert finding "a total lack of cooperation...." It granted Jessie's motion. Specifically, the trial court struck Robert's responsive pleadings and entered his default and it awarded $275,000 in monetary sanctions.

Justice Richli was not amused, although Robert's appeal essentially succeeded. The sanctions award of $275,000 was set aside because Jessie's pleadings had never specifically requested that amount, although she said generally she was seeking money for Robert's breach of fiduciary duties. That did create a due process issue. Moreover, the case was ordered sent back to the trial court to determine whether Jessie should be allowed to amend her pleadings to more specifically identify her breach of fiduciary duty claims by way of amendment, which a strong inference that such a breach of duty had been amply demonstrated. And the appellate decision's reasoning will cry out to the trial court in favor of a big monetary spanking for Robert.

While it seems unfortunate that these manipulations will go unpunished this round, Marriage of Kahn is a good reminder that litigants need to apprise the other side of what remedy, including the amount of damages, they are seeking if they want the trial court's decision in their favor to be upheld.

First, Justice Richli found that Robert's claims about the time he was unrepresented weren't credible. "It must be remembered that Robert didn't provide any responses until a year after the original request.... He simply blew off the discovery process." Ouch. "In any event, his propria personal status is irrelevant. '[S]elf-represented parties are entitled to no greater consideration than other litigants and attorneys." [Citation omitted].

Second, Robert's claims of injuries weren't credible, and if even if they had been "he should have sought an extension of time, a protective order, or similar relief. He should not have exercised self-help by unilaterally postponing a response."

Third, Robert had complained that Jessie's requests were "supposedly numerous and sweeping." Yet, "Robert ... had a fiduciary duty of full disclosure regarding all community property assets and liabilities [Fam. Code section 1100(e)]." Justice Richli did not find the requests to be oppressive and burdensome for a marriage lasting almost 50 years. "A couple of months should have been plenty of time to response. And, again, if it was not, Robert should have sought an extension." This is useful dicta for those faced with setting up discovery motions in family law and divorce cases.

Fourth, Robert had submitted some responses that contained mostly objections and had argued that therefore the original motion to compel was moot, and that if Jessie didn't like those responses she should have filed (at further substantial expense to her) another motion to compel upon receiving them. Justice Richli dismissed that argument by noting that the responses had not been signed by an attorney, as is required when a party is represented and submits objections and "For this reason alone, the trial court could properly disregard the responses as invalid". Moreover, those objections had long before been waived by operation of law as untimely, and "Robert had violated a court order to act by a certain deadline."

Fifth, Justice Richli dismissed Robert's argument that a new motion was required once a party to discovery responds to even one question. "Obviously," J. Richli states, "this is absurd." Further, the Fifth Amendment objections "appear invalid on their face." They included objections to producing corporate and partnership records, when the 5th Amendment doesn't apply to entities. Justice Richli continues "It was reasonably inferable that Robert's attorneys knew the responses were defective." Double-ouch. In fact, attorney Riedel never himself submitted a declaration explaining what happened when the Cottle responses came to light, after which attorney Riedel said he served them "immediately". "In any event, ...., it failed to explain why Reidel did not sign them. This procedure neatly allowed both attorneys to avoid any responsibility for the content of the responses.... If Reidel was willing to serve them, he should have signed them; if he was not willing to sign them, he should not have served them. There was ample evidence that Robert and his attorneys were playing fast and loose with the court."

Triple-ouch.

However, in fairness to Palmer it does need to be said that Justice Richli noted that Robert had failed (read: refused) to comply when represented by Stefanelli and Cottle. "The trial court could reasonably conclude that Robert was equally involved in Riedel's most recent failure to comply with discovery, resulting in the default."

The rest of the reported decision is, as I've said, an important primer on sanctions and fiduciary duty claims, which Jessie's attorney had apparently not adequately set up by failing to identify both the nature of the FD claims as well as the amount requested, so that Robert was on notice of what he was facing. This is a good lesson. You must check the right boxes on the Judicial Council forms, including the FL-100, because the Court's power to later enter a default judgment will be limited by how well they were given notice of the potential consequences. This is very hard to predict at the inception of a case, when an attorney is first retained, and indeed Justice Richli threw Jessie this bone: "Jessie may actually prefer to have the default vacated so she can litigate her claim for damages for breach of fiduciary duty in this action."

California Family Law is in disarray by reasons of its complexities, as an interface between human emotions and reactivity and complex rules of substantive law and procedure. It demands more than most attorneys can reasonably offer, even the better ones.

But thanks to Justice Richli's sensitive and well-reasoned decision, in the meantime, fiduciary duties are reaffirmed as alive and well in Riverside County, California, family law and dissolution cases.

Thurman W. Arnold III, C.F.L.S.