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In re Marriage of Georgiou

California Court of Appeals, Fourth District, First Division

July 31, 2013

In re the Marriage of BYRON GEORGIOU and MARIA LESLIE. BYRON GEORGIOU, Respondent,
v.
MARIA LESLIE, Appellant.

APPEAL from an order of the Superior Court of San Diego County No. D478168, Lorna A. Alksne, Judge.

Law Offices of Marjorie G. Fuller, Marjorie G. Fuller, Lisa R. McCall; Law Offices of Fuller Jenkins and Erik C. Jenkins for Appellant.

Law office of Stephen E. Temko, Stephen E. Temko; Ashworth, Blanchet, Christenson & Kalemkiarian, Sharon L. Kalemkiarian; English & Gloven and Mark M. Gloven for Respondent.

McCONNELL, P. J

More than three years after entry of judgment, Maria Leslie filed an action under Family Code section 1101, [1] alleging her former husband, Byron Georgiou, breached his fiduciary duty to her during the dissolution proceedings by not disclosing the true value of a community asset divided in the marital settlement agreement (MSA), his prospective referral fee in federal class action securities litigation against Enron Corporation (Enron). The family court granted Georgiou's motion for summary adjudication, determining section 1101 does not authorize a postjudgment action, and alternatively, the action was untimely under the statute's three-year statute of limitations (§ 1011, subd. (d)(1)). Leslie challenges the order, contending both rulings are incorrect.

We conclude section 1101 does not authorize Leslie's action, and thus we are not required to address the alternative ruling. Because the prospective referral fee was not concealed, but rather the parties litigated the issue and the judgment fully adjudicated the asset, Leslie's recourse was an action to set aside the judgment, or a portion thereof, within the one-year limitations period specified in the relevant portion of section 2122, subdivision (f). Because her action was untimely, the court lacked jurisdiction over the matter. We affirm the order.

FACTUAL AND PROCEDURAL BACKGROUND

Leslie and Georgiou married in 1985 and separated in 2003. Georgiou filed for dissolution that year, and a bifurcated judgment terminated the marital status in 2005.

Georgiou is an attorney, and in 2000 he entered into an "of counsel" relationship with Milberg Weiss Bershad Hynes & Lerach LLP (Milberg Weiss), [2] which entitled him to a referral fee of 10 percent in class action litigation in which Georgiou secured the plaintiff and the firm was designated lead counsel.

In 2002 Milberg Weiss entered into a contingency fee agreement with the Regents of the University of California (the Regents), which was ultimately designated the lead plaintiff in federal class action securities litigation against Enron. On a sliding scale, the agreement authorized attorney fees of between 8 and 10 percent of the recovery.

In February 2007 Leslie and Georgiou entered into an MSA. Before signing it, Leslie knew of Georgiou's referral fee agreement with Milberg Weiss, that the firm had thus far recovered approximately $7.2 billion in settlement funds, the largest recovery to date in a class action, and the firm would be submitting a request for attorney fees in federal district court under its fee agreement with the Regents. It is undisputed that Georgiou did not give Leslie a copy of the fee agreement.

Leslie deposed Darren J. Robbins, a Milberg Weiss partner designated most knowledgeable about Georgiou's relationship with the firm. Her attorney questioned Robbins on whether the firm had a fee agreement with the Regents, but he did not ask Robbins what percentage of fees the Regents had agreed to pay the firm, nor did he ask for a copy of the agreement. In any event, Robbins testified the federal district court must approve a fee award based on a variety of factors, and it is not bound by a fee agreement.

Robbins also testified Georgiou was entitled to a referral fee from Milberg Weiss in the Enron litigation, but there was a dispute as to the amount of the fee. Robbins said, "I would not imagine any scenario under which [Georgiou] would receive less than three percent." Robbins also said the firm hoped to obtain attorney fees substantially exceeding the largest securities class action fee award to date of $330 million, as that award was based on a much smaller recovery than achieved in the Enron litigation. Robbins estimated Milberg Weiss would obtain fees by the end of 2008.

In a settlement conference brief, Leslie gleaned that Georgiou's referral fee may be between $9 and $33 million, presumably based on a potential fee award to Milberg Weiss of $330 million. She acknowledged, however, that the firm intended to seek "far more than $330 million, " and that Georgiou intended to "vigorously argue" he was entitled to a full 10 percent referral fee.

The MSA divided the prospective referral fee unequally. Leslie agreed to accept 10 percent of the fee, in exchange for approximately $7 million in other assets and debt relief. She received the family home, even though it was Georgiou's separate property, eight townhomes that produced net monthly income, a Roth IRA and retirement accounts. He received 90 percent of his referral fee, life insurance policies, loan receivables, business interests, and substantial credit card and other debt. According to Georgiou, Leslie "was taking everything that was certain."

The MSA was incorporated in a judgment of dissolution entered on December 12, 2007. About a month later, Milberg Weiss submitted its fee application to the federal district court in the Enron case, requesting 9.52 percent of the ultimate recovery of approximately $7.2 billion, pursuant to the terms of its fee agreement with the Regents. In September 2008 the federal district court issued a lengthy order granting the request as reasonable and awarding Milberg Weiss $688 million in fees.

Milberg Weiss then negotiated a 9 percent referral fee with Georgiou. In September 2008 Georgiou paid Leslie $4 million for her 10 percent share of the fee, which caused her to realize his fee exceeded the top range of $33 million she anticipated when she entered into the MSA. In November 2009 she learned she was entitled to an additional $1.560 million.[3]

Leslie retained a new attorney, and in November 2009 she filed a motion under section 2122, subdivision (d), to set aside the judgment of dissolution based on her mental incapacity. A motion under this provision must be filed within two years after the date of entry of judgment. (Ibid.) She argued her former attorney insisted that she enter into the MSA so he could get paid, and implied she was under duress because she had not been taking psychotropic ...


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