More Nuanced, Granular Analysis Required Under The Circumstances.
In re Marriage of Ciprari, 32 Cal.App.5th 83 (2d Dist., Div. 1) (2019) is an important case both for the type of expert testimony which can be allowed in “tracing” cases as well as holding that needs-based fees can be allowed to a litigant having access to a significant asset base but needing to litigate because the opponent drove up the litigation costs by failing to segregate separate property.
In this one, ex-husband came to about a 20-year marriage with around $2 million in separate property. During the marriage, there were assets maintained and preserved both with community and ex-husband’s separate property funds, with a forensic accountant needing to trace the use of both and driving up costs for both sides. At the end of the day, ex-wife had expended $1 million in fees (only obtaining $85,000 in reimbursements) even though she did have access to a significant community property asset base. In contrast, ex-husband had expended $1.2 million, half of which was on his “tracing” forensic accountant. Ex-husband was gainfully employed and had the better asset base, while ex-wife was not employed (and had no pending prospects for employment) albeit having an asset base from which to fund her own fees. The trial court denied ex-wife’s request for additional fees under needs-based Family Code section 2030/2032 statutes, after looking at the “finances” and observing that the matter had been overlitigated.
The fee denial was reversed on appeal.
The fact that ex-wife could pay for her own fees did not preclude a needs-based award, much less the circumstances that the matter had been overlitigated. The critical factor in this one was that ex-husband had failed to segregate his separate property, driving up attorney’s and accountant’s fees for wife so that a proper “tracing” had to be done to get at the bottom of things. Under these circumstances, a more nuanced and granular inquiry was required as to reasonableness of ex-wife’s fee request, requiring a reversal and a remand.
BLOG OBSERVATION AND HAT TIP—This decision is must reading for family law practitioners on the use of expert testimony in “tracing” cases, establishing that the lower court is not shackled in using just the “direct tracing” or “exhaustion tracing” approaches developed in prior case law. We give a HAT TIP to Anthony D. Storm of Storm Family Law for bringing this case to our attention.