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In Re Marriage of Richard Turkanis and Joan M. Price. v. Joan M. Price

January 30, 2013

IN RE MARRIAGE OF RICHARD TURKANIS AND JOAN M. PRICE. RICHARD TURKANIS, RESPONDENT,
v.
JOAN M. PRICE, APPELLANT; BRIAN J. KRAMER, CLAIMANT AND APPELLANT. IN RE MARRIAGE OF RICHARD TURKANIS AND JOAN M. PRICE. RICHARD TURKANIS, RESPONDENT,
v.
JOAN M. PRICE, APPELLANT; DANIEL B. SPITZER, CLAIMANT AND APPELLANT.



(Los Angeles County Super. Ct. No. BD 401600) (Los Angeles County Super. Ct. No. BD 401600) APPEAL from orders of the Superior Court of Los Angeles County, Maren E. Nelson, Judge. Affirmed.

The opinion of the court was delivered by: Flier, J.

CERTIFIED FOR PUBLICATION

This is the third appeal we consider in this marital dissolution action between Richard Turkanis and Joan M. Price. In the first appeal, we considered the trial court's order after the first of two phases of trial. The purpose of this first phase of trial was to set the value at the date of marriage of a closely held corporation (Radman) formed by Turkanis prior to marriage (the valuation trial). We permitted Price an interlocutory appeal from the valuation order and affirmed it in a nonpublished opinion. (In re Marriage of Price & Turkanis (May 11, 2011, B218753).) Price brought the second appeal after the second phase of trial in which the trial court allocated assets between Price and Turkanis (the allocation trial). We affirmed the trial court's judgment after the allocation trial in a nonpublished opinion. (In re Marriage of Price & Turkanis (July 19, 2012, B226221).)

In this third proceeding, former attorneys for Price, Brian J. Kramer and Daniel B. Spitzer, appeal from the trial court's order granting Turkanis's motion to expunge the attorneys' "family law attorney's real property liens" (FLARPL's). (Fam. Code, § 2033, subd. (a).)*fn1 Kramer and Spitzer recorded these FLARPL's to secure their fees and costs when they represented Price during the first phase of trial. They contend that the court erred in granting Turkanis's motion to expunge their FLARPL's because (1) the relevant sections of the Family Code do not permit the court to expunge duly noticed and recorded FLARPL's, (2) the trial court should have joined them to the action before entering a judgment stripping their FLARPL's, and (3) the court should have granted Kramer's request for a statement of decision on the motion to expunge the FLARPL's.

Kramer and Price also appeal from the court's order on Kramer's Borson*fn2 motion for attorney fees, in which the court ordered Turkanis to pay $39,000 to Kramer for Price's fees. They contend that the court erred in offsetting the fee award for unreasonable litigation conduct under Family Code section 271. We affirm both orders.

factual and procedural background

Turkanis and Price married on March 31, 1995. They have one child, a daughter, born in 1997. They separated on December 19, 2003. Turkanis filed this dissolution action on February 10, 2004. The court entered a status only judgment of dissolution on November 10, 2005.

The first phase of trial, the valuation trial, commenced on May 19, 2008. The valuation trial took place on various days in May and June of 2008 and January, February, March, June, and July of 2009. On August 3, 2009, the court issued its 25-page written ruling valuing Radman as of the date of marriage.

The second phase of trial, the allocation trial, commenced on February 10, 2010, and continued on three more days that month. The court entered its amended judgment dividing the parties' assets on June 1, 2010. The parties' daughter was in Turkanis's custody at the time of the court's judgment but was under the jurisdiction of the dependency court, so the trial court did not make any orders regarding child custody or visitation. At the allocation trial, Turkanis demonstrated that Price had received post-separation distributions in excess of $1.1 million during the pendency of the litigation. Turkanis himself had received approximately the same amount in distributions.

1. Kramer's FLARPL

Spitzer and Kramer associated in as Price's counsel during the pendency of the valuation trial, Spitzer in July 2008 and Kramer in December 2008. They were the 10th and 11th attorneys to enter appearances for Price. Price did not have funds available to pay Kramer's retainer fee. Thus, as part of her retainer agreement with Kramer, she agreed that Kramer's firm could seek to record a FLARPL pursuant to section 2033 against one of the two single family residences the parties' owned. She agreed the FLARPL would cover the retainer fee plus any unpaid fees and costs due at the time Kramer recorded the FLARPL.

Pursuant to section 2033, subdivision (b), on February 13, 2009, Price served and filed a notice of intent to record Kramer's FLARPL in the amount of $140,000. Her supporting declaration stated that she and Turkanis owned two single family residences in Los Angeles, one at 1234 N. Bundy Drive (1234 Bundy) and one at 1250 N. Bundy Drive (1250 Bundy). The notice said she intended to permit Kramer to record a FLARPL against 1234 Bundy, which had a fair market value, she believed, of over $1 million. Approximately one month prior, Turkanis had filed an income and expense declaration opining that the 1234 Bundy property had $1.75 million in equity value.

On February 26, 2009, Turkanis filed an ex parte application and objection to Price's notice of intent. In it, he stated that he had no objection to Kramer recording a FLARPL against the 1234 Bundy property. Under the section for requested relief, he specifically stated: "That [Price's] counsel be allowed a FLARPL on 1234 Bundy Avenue [sic] in the sum of $140,000." But he objected to a FLARPL against the 1250 Bundy property. He believed the equity value of the 1250 Bundy property to be $2.6 to $2.9 million. He also believed the court should eventually award him all the proceeds from the sale of the 1250 Bundy residence as his separate property, given the value of Radman when he brought it to the marriage. Under these circumstances, he felt it would be prejudicial to his claims and unjust to permit Kramer to record a FLARPL against 1250 Bundy. As to 1234 Bundy, he stated: "[Price] has advised the Court of her desire to ultimately own the 1234 Bundy Avenue [sic] Property. If my valuation of Radman ultimately prevails, it is unlikely that [Price] could be awarded the 1234 Bundy Avenue [sic] property without owing me substantial funds. However, if she were able to secure these funds and she was awarded the 1234 Bundy Avenue [sic] Property as she has indicated is her desire, then I believe it is appropriate that the [FLARPL] to secure [Price's] payment of her attorneys' fees be recorded against the property awarded to her."

Price filed an amended notice of intent regarding Kramer's FLARPL on or around April 2, 2009. She indicated in the notice that the court held a hearing on February 26, 2009, at which it had authorized Kramer to file a FLARPL against 1234 Bundy but denied without prejudice her request for a FLARPL against 1250 Bundy. The court had suggested that if Price wanted a FLARPL against 1250 Bundy, she needed to file a new notice because the initial one had identified only 1234 Bundy as the property against which she wanted a $140,000 FLARPL. Thus, she was filing the amended notice because she preferred the $140,000 FLARPL to be against 1250 Bundy.

Turkanis filed an ex parte application and objection to the amended notice on or around April 17, 2009. He objected to the recording of a FLARPL against 1250 Bundy but again stated he had no objection to a FLARPL for $140,000 against Price's interest in 1234 Bundy. Under the section for requested relief, he specifically stated: "[Price] may record a FLARPL against [her] interest in 1234 Bundy Avenue [sic] in the sum of $140,000. Said lien shall not apply or be assigned to any rents, issues, or profits that may be generated at any time prior to the Court's determination of [her] interest in the property." He stated the same objections to a FLARPL against 1250 Bundy as he had previously stated, and also restated verbatim his view that 1234 Bundy could not be awarded to Price in the ultimate division of property without her owing him substantial funds.

Price filed a response to the objection arguing that, given the undisputed equity in both Bundy properties, there was no basis for Turkanis to assert that a FLARPL against one property over the other would result in an unequal division of property or otherwise be unjust. She believed that she had sizeable separate property claims of her own. She further believed that, even under a worst case scenario, she should receive several hundred thousand dollars of equity in the two homes. She and Kramer were optimistic that the outcome of trial would enable her to continue living at 1234 Bundy and therefore they preferred the FLARPL to be against 1250 Bundy.

After the hearing on Turkanis's ex parte application and objection, Kramer was permitted to record a FLARPL against Price's community property interest in 1234 Bundy but not 1250 Bundy. Price executed the deed of trust that effectuated the FLARPL for $140,000 on May 26, 2009. The deed was recorded on June 2, 2009. The property at 1234 Bundy was otherwise unencumbered.

Kramer filed a substitution of attorney substituting out as counsel for Price on or around December 9, 2009, after the valuation trial but before the allocation trial commenced. Price was thereafter representing herself, except that Kramer made a few more appearances to represent Price on a limited basis regarding a trial continuance. Between December 2008 and February 2010, Price incurred approximately $273,109 in fees and costs for Kramer's services.

2. Spitzer's FLARPL

On or about June 26, 2009, Price filed and served a notice of intent to permit Spitzer to record a FLARPL against 1234 Bundy. She stated that the FLARPL was to be for $125,000, and at that point she had already incurred approximately $94,000 in fees for Spitzer's services. She believed that the property had over $1 million in equity value, and there were no encumbrances on it other than Kramer's FLARPL. Turkanis intended to file an objection to the notice, but instead the parties agreed to work on a deed of trust effectuating the FLARPL that was agreeable to both of them. They eventually agreed on the form of the deed of trust, which would effectuate a FLARPL for $150,000 against Price's community property interest in 1234 Bundy. Spitzer recorded the deed of trust effectuating the FLARPL on September 28, 2009.

Spitzer filed a substitution of counsel substituting out as Price's counsel on or about November 20, 2009.

3. Judgment After Valuation and Allocation Trials

The court's judgment divided the assets between Price and Turkanis. It found Turkanis's corporation, Radman, to have a value of $6,252,000 at the date of marriage. Turkanis sold Radman in 1998, after the parties had married. The court determined that his separate property interest in the proceeds from the sale of Radman was $6,283,988. At the allocation trial, the separate property proceeds were traced, and the court awarded assets accordingly. From the community estate, the court awarded Turkanis both the 1234 Bundy property and the 1250 Bundy property, among other things. After the tracing of the Radman sale proceeds, the division of presumptive community assets, the confirmation of separate property, and the determination of reimbursements and credits owing, the court determined that Price owed Turkanis an equalization payment of $154,289.

The court found the 1250 Bundy property had equity of $2 million. The judgment stated that the 1234 Bundy property had equity of $1.5 million and was "encumbered only by a lien for delinquent real property taxes" -- despite that Kramer and Spitzer had recorded FLARPL's for $140,000 and $150,000, respectively, against the property. Still, it is clear from the transcript of the court's rendering of its proposed statement of decision that the court and Turkanis were aware of the FLARPL's and did not consider them expunged by the judgment. Turkanis indicated that he did not address the FLARPL's in the proposed judgment, which he drafted, because he "did not think it was appropriate" to extinguish the FLARPL's without giving Kramer and Spitzer a chance to be heard. He suggested that he file a motion to extinguish the FLARPL's, and the court agreed. The court ordered Turkanis to give notice to "the FLARPL holders" and Price.

4. Turkanis's Motion to Expunge the FLARPL's

On or about March 18, 2010, Turkanis served notice on Price, Kramer, and Spitzer that the court would hear Turkanis's motion to expunge the FLARPL's on June 1. He also gave notice that the court would hear Kramer's earlier filed Borson motion for fees on the same date.

Turkanis filed his "motion to deny enforcement of, and to extinguish, expunge, and/or limit real property liens" on or about May 4, 2010. For the most part, he argued that the FLARPL's were unjust under the circumstances. These circumstances included the following: (1) as a result of Radman's value at the date of marriage, Turkanis had substantial separate property claims; (2) since the attorneys had recorded the FLARPL's, the Bundy properties had diminished in value;*fn3 and (3) the court had made two fee awards to Price since the FLARPL's, one for $21,000 and one for $79,000. ...


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