The October 23, 2019, Court of Appeals opinion in Thornton v. Thornton mostly affirms the family court’s decision on issues of equitable distribution and fees.

In Thornton, Husband filed for an adultery divorce after he became suspicions of Wife’s relationship with a co-worker. Custody was highly contested and required the services of a guardian ad litem and forensic custody consultant. At trial, the family court granted Husband a divorce on the ground of adultery, awarded Husband primary legal and physical custody of the parties’ children, attempted to equitably divide the marital estate on a 50/50 basis, denied Wife’s requests for attorney’s fees, made Wife pay sixty-seven percent of the guardian’s and the forensic consultant’s fees, and made Wife reimburse Husband his private investigator fees. After her motion for reconsideration was denied, Wife appealed.

Except, potentially, on the division of Husband’s pension, Wife obtained minimal relief from the Court of Appeals on equitable distribution issues. Wife argued that a $27,000 loan which Husband had obtained around the time of their separation, but not told her about, should not be treated as a marital debt. The Court of Appeals affirmed the family court’s finding that this debt was marital, noting Husband had used the loan to pay down marital debts and had made payments on the loan during the litigation. It further noted Wife presented no evidence to rebut the presumption that the debt was marital.

Wife appealed the apportionment of Husband’s 401k. The family court equally divided the net value of the 401k but then made Wife responsible for half of the 401k loan. Wife correctly argued that this essentially debited her twice for the value of the loan and the Court of Appeals corrected the family court’s math error.

Wife appealed the family court’s valuation of a camper. At trial both parties testified to the value of the camper (Wife valued it at $16,955; Husband valued it at between $9,000 and $10,000) but presented no evidence to corroborate their valuations. In valuing the camper, the family court averaged the parties’ valuations. The Court of Appeals held that doing so was error but affirmed the valuation anyway as “within the range of evidence presented.” A simple question of Husband as to whether Wife could keep the camper at a $10,000 valuation might have gotten Wife more money but (at least from my reading of trial transcripts) few attorneys think to ask what I believe is an obvious question.

Wife argued the family court failed to divide the equity in the marital home and a debt to Verizon, but the Court of Appeals held that the family court’s final order did consider these items in its equitable distribution award.

Wife argued the family court should not have placed a fixed dollar value on Husband’s pension (and then award her half that value). The Court of Appeals held that the pension value could not be determined until the pension fully vested and awarded Wife one-half of the marital portion of the pension–apparently to be divided through a Qualified Domestic Relations Order.

Wife appealed issues related to custody and child support. However by the time of oral argument the children were emancipated and Wife acknowledged these issues were now moot.

Wife argued that the family court should not have granted Husband a fault divorce on the ground of adultery but should have granted her a no-fault divorce based upon one year’s separation. Wife argued that she had not committed adultery. However, from the Court of Appeals’ opinion, it appears her argument was actually that she didn’t begin committing adultery until after the parties’ separation. Further, from reading the opinion, it appears there was substantial evidence of inclination and opportunity–the Court of Appeals found this evidence “clear and positive.” Thus it affirmed the fault based divorce.

The Court of Appeals affirmed the family court’s denial of Wife’s attorney fee request. While Wife’s income was lower than Husband’s, Husband achieved beneficial results at trial. Further the Court of Appeals noted Wife sought custody despite the “unwavering desire” of what had to be older teens to live with Husband. The Court of Appeals found Wife’s pursuit of custody involved additional discovery and discovery motions, thus adding to the parties’ fees.

The Court of Appeals also affirmed the family court’s decision to make Wife pay sixty-seven percent of the guardian’s and forensic evaluator’s fees. It rejected Wife’s claim that the guardian’s fee was excessive and noted the guardian had given the parties a discount on some of her fees. Wife argued the guardian expended an unreasonable amount of time but also acknowledged that “the dispute was complex and contentious.” The Court of Appeals thus affirmed the amount of the guardian’s fees.

It further affirmed the sixty-seven percent apportionment of these fees. The Court of Appeals noted Wife’s unreasonable position regarding custody was a factor in the size of these fees. If further cited Wife’s uncooperative conduct towards the guardian and Wife’s own requests for the guardian to review numerous documents as increasing the guardian’s fee, were a basis to affirm this division.

Finally, the Court of Appeals affirmed the decision to make Wife reimburse Husband’s private investigator fees, as these fees were reasonably incurred in proving Wife’s adultery.

Thornton does not present any truly novel issues but there a few useful lessons to be gleaned. First, it appears an unequal apportionment of guardian’s fees and related fees will be affirmed if justified. Second, it appears defined benefit pensions cannot be divided by attempting to put a present value on the pension unless both parties agree to divide them this way. Finally, it appears the family court cannot merely average the parties’ uncorroborated valuations of personal property to come up with its own value–but the family court likely won’t get reversed if the valuation is reasonable.

Probably once a month I attend a contested family court hearing in which the opposing counsel attempts to submit a fee affidavit without including an itemized statement of time. Most often I’ve been able to keep the family court from considering awarding the other party attorney’s fees if I object. Yet this behavior persists.

In 1986, the Court of Appeals, in Johnson v. Johnson, 288 S.C. 270, 277-78, 341 S.E.2d 811 (Ct.App. 1986), indicated that “vague estimations of time and labor devoted to the case and extent of legal services rendered” are insufficient to sustain an attorney fee award. In Johnson a one-half page statement of estimated time devoted to case, totaling 90 hours, coupled with vague testimony of attorney as to time and labor, found was insufficient to support award of attorney’s fees. The Court of Appeals remanded the matter back to the family court.

Twice Johnson has been cited by the appellate courts in published opinions to vacate a family court’s award of attorney’s fees. In Strickland v. Strickland, 297 S.C. 248, 376 S.E.2d 268 (1989), the Supreme Court reversed an award of attorney’s fees because the fee affidavit was insufficient for the family court to determine the fee award factors. In Griffith v. Griffith, 332 S.C. 630, 506 S.E.2d 526 (Ct.App. 1998), the Court of Appeals remanded the award of attorney’s fees because, [t]he conclusory information of total time expended and hourly rate charged which was set forth in the affidavit is insufficient to provide the evidentiary basis necessary to support the award, even with the wife’s testimony confirming the amounts actually paid.”

In South Carolina family court a fee affidavit is incomplete without an itemized statement of time. Failing to include such statements can be fatal to a fee claim. Objecting to incomplete fee affidavits can often prevent an award of attorney’s fees against one’s own client.

The May 8, 2019 Court of Appeals opinion in Klein v. Barrett, 427 S.C. 74 828 S.E.2d 773 (Ct. App. 2019), finds the Court of Appeals affirming a very detailed and highly unusual custody arrangement.

Kline involved a custody modification brought by (Ex-)Wife. At the time of the parties’ 2010 divorce, (Ex-)Husband had primary custody of the children with Wife having liberal visitation and both parties having the right of first refusal. It was agreed that Wife would not have to pay child support while she pursued a degree to become a certified registered nurse anesthetist (CRNA).

Initially, the parties were able to effectively co-parent. Shortly after Wife finished her degree Husband asked her to begin paying child support. At that point communication between the parties broke down and Wife filed this modification action seeking custody and child support. After trial and motions to reconsider, the family court issued an order maintaining primary physical custody with Husband but giving Wife more visitation (in an extremely detailed schedule), providing each party legal custody of particular aspects of the children’s lives, and requiring Wife to pay child support, 2/3rds of the guardian ad litem’s fee, and $10,000 of Husband’s attorney’s fees. Wife appealed and the Court of Appeals affirmed.

The physical custody arrangement ordered by the family court and affirmed by the Court of Appeals ended the previous right of first refusal but gave Wife alternating weekend visitation, starting Thursday after school and continuing until the start of school on Monday. In weeks for which Wife has weekend visitation (visitation weeks), Wife additionally has after school visitation Monday through Wednesday until 7:00 p.m. During visitation weeks, the children eat dinner with Wife. Conversely, during non-visitation weeks, Wife has after school visitation Monday through Thursday until 6:00 p.m., and the children eat dinner with Husband.

The family court believed this arrangement was the best way to relieve conflict between the parties while serving the best interests of the children. Apparently the parties’ children (a daughter age 16 and a son age 11 at the time of trial) did not like going long periods of time without seeing either parent. Both children told the clinical psychologist, who was appointed by the court to conduct a comprehensive custody evaluation, that they wished to spend more time with Wife.

On appeal Wife argued that an alternating week custody arrangement was in the children’s best interests. The Court of Appeals disagreed, specifically finding that this case presented “exceptional circumstances” justifying joint custody:

In considering the physical placement arrangement challenged by Wife, we commend the family court’s efforts to serve the needs of all parties involved. We find the court properly weighed the preferences of the children and the recommendations of the experts and guardian ad litem. The court appropriately incorporated this input into the new custody framework. Specifically, the court addressed the children’s desire to spend more time at Wife’s home during the week by extending the visitation until 7:00 p.m. on certain evenings so as to increase quality time and allow for family meals with both parents. Additionally, the court expanded the duration of Wife’s weekend visitation.

 

Citations omitted.

Given that Wife was also seeking joint custody, it’s not surprising that the Court of Appeals affirmed a joint custody arrangement. What is surprising is how detailed the custody arrangement is and how the family court fashioned a schedule with so many transitions between parties that no longer got along. However given that the Court of Appeals found that the underlying conflict arose when Husband asked Wife to begin paying child support upon her completion of the CRNA program (as she had agreed to do in the parties’ divorce decree) and Wife responded by informing Husband she intended to seek custody, it is hard to lay the fault for this breakdown on Husband.

The Court of Appeals further affirmed the award of $15,000 in attorney’s fees to Husband. The Court noted that Wife’s annual income was $51,969.60 greater than Husband’s, that Husband’s attorney’s fees amounted to approximately forty-four percent of his gross annual income whereas Wife’s accrued fees were equivalent to around twenty-five percent of her gross income, and that Husband obtained beneficial results. It concluded that Wife was in a superior position to bear the cost of the fees.

In requiring Wife to pay 2/3rds of the guardian’s fees the Court of Appeals noted that the family court erred in applying the Glasscock factors and should instead have applied the factors from S.C. Code § 63-3-850(B). In layman’s terms, this means that successful results are not a factor in the award of guardian’s fees. However the Court of Appeals affirmed this unequal allocation of the guardian’s fees for the same reasons it affirmed the award of attorney’s fees to Husband.

Finally, the Court of Appeals affirmed the award of child support to Husband. Given the unusual visitation schedule, the family court employed Schedule C shared custody guidelines. On appeal, Wife asserted neither party should pay child support. However given Wife’s greater income, Husband’s retention of primary physical custody, and the agreement that Wife would begin paying child support once she completed her CRNA program, the Court of Appeals affirmed the award of child support (at trial, the family court did not award Husband any retroactive child support–something Husband should have appealed). The Court of Appeals also made Wife pay 100% of the daughter’s orthodontic expense because she informed Husband via email that she would do so.

It is unclear whether Kline portends a future in which South Carolina appellate courts approve creative and detailed joint custody arrangements. It could simply be that one cannot defeat a joint custody arrangement on appeal if one is seeking a result that moves the parties even closer to 50-50 physical custody.

Klein describes a situation all too familiar to family law practitioners: one parent upsets a stable domestic situation to further an unrealistic desire to avoid paying support (or to get more support). Wife was graced by the initial moratorium on her child support obligation. Had Husband demanded child support be set based upon her earning capacity at the time of their divorce Wife would have been ordered to pay it, even if this obligation hindered her ability to obtain the credential needed to obtain a higher paying job. Yet, once Husband attempted to obtain his benefit from this bargain, Wife’s litigation strategy enabled her to avoid paying child support for another 2+ years and insured their daughter’s teenage years were spent in custody litigation. Great job family court in rewarding this intransigence.

E.D.M. v. T.A.M., 307 S.C. 471, 476-77, 415 S.E.2d 812, 816 (1992) is the seminal South Carolina case in deciding whether to award a prevailing party attorney’s fees in family court. It lists four factors the family court should use to determine an award of fees. Excepting the “beneficial results” factor, the other three factors all invoke the parties’ financial condition: “each party’s ability to pay his or her own fee…the parties’ respective financial conditions; and the effect of the fee on each party’s standard of living.”

Subsequent case law has developed two distinct lines of inquiry to analyze these financial factors. The first line of cases looks at the attorney fee award as a percentage of the income of the party ordered to pay fees. If it’s too high a percentage, the appellate courts typically reverse the award. In Srivastava v. Srivastava, 411 S.C. 481, 769 S.E.2d 442 (Ct. App. 2015), the Court of Appeals reversed an award representing 90% of the Wife’s gross annual income. In Rogers v. Rogers, 343 S.C. 329, 334, 540 S.E.2d 840, 842 (2001) the Court of Appeals reversed the family court’s award of attorney’s fees where the award represented 16% of Mother’s annual income, and some of the beneficial results obtained by Father in the litigation were reversed on appeal. In Spreeuw v. Barker, 385 S.C. 45, 682 S.E.2d 843 (Ct. App. 2009), the Court of Appeals expressed concern “by an award of attorney’s fees representing approximately 40% of Father’s annual income.” It allowed that fee award to stand only because of the Father’s litigation conduct.

Another line of cases involves situations in which a losing party’s disputatious litigation conduct greatly increased the other party’s fees. There are five such reported case, including Spreeew, and I’ve represented the winning side in one and the losing side in two (in neither of those two cases did the Court of Appeals note that I was not that party’s trial attorney, thereby unfairly adding to my fairly earned reputation as a somewhat disputatious attorney). In those cases, E.D.M.’s financial factors become of diminished importance.

These separate lines of cases leaves an attorney litigating the issue of attorney’s fees with two potential strategies: 1) acknowledge that one’s fee request likely cannot exceed 25-40% of the other party’s annual income; or 2) try to prove that the other party’s disputatious conduct greatly increased the client’s fees.

I was left with this conundrum in the recent appeal in Bojilov. I’m not sure I should have been. From the parties’ trial postures it was clear that my client would likely be transferring her husband some funds as part of his equitable distribution award. Any attorney fee award to my client would merely reduce the amount of funds she had to transfer to him. This was not a situation in which the losing party would actually have to pay fees from future income. Rather, a fee award would simply offset his equitable distribution award.

There’s currently no reported case law in which the appellate courts have approved a large fee award because the party ordered to pay it would not actually have to “pay it” or could pay it from his or her equitable distribution award. However there are myriad circumstances in divorce cases in which an attorney fee obligation can easily be balanced by an equitable distribution award. The current system makes it too easy for the low-income spouse in a divorce to run up both parties’ fees. So long as that party’s litigation conduct isn’t too disputatious, that party runs minimal risk of paying the other side’s fees, even if that fee award merely reduces that party’s equitable distribution payment.

It’s time for South Carolina family law attorneys to start arguing that assets, especially marital assets, be considered as part of E.D.M’s financial factors.

The September 19, 2018 Court of Appeals opinion in Bojilov v. Bojilov, 425 S.C. 161, 819 S.E.2d 791 (Ct. App. 2018), doesn’t establish any novel legal issues but does highlight important recurring issues in South Carolina Family Law. Bojilov stems from a divorce, with the primary issues on appeal being child custody, Husband’s right to travel with the child to Bulgaria, alimony, equitable distribution, and attorney’s fees.

Although Wife’s income, inclusive of non-marital investment income, was greater than Husband’s, the trial court still awarded her $200 per month in permanent periodic alimony. Husband appealed this issue and the Court of Appeals affirmed. In affirming, the Court of Appeals noted that Husband’s financial declarations understated his income by failing to include income from side jobs and vastly overstated his expenses. It further noted that Wife was invading her non-marital funds to support herself and the parties’ special-needs child and that she had reduced her expenses during the litigation period. Husband’s adultery and habitual deceit led to the marital breakdown. The Court of Appeals justified the alimony award as a way of slowing Wife’s need to use non-marital funds to support herself and the parties’ minor child. I believe Bojilov is the first reported South Carolina case to establish (rather than simply not eliminate) alimony for a spouse with greater monthly income than the spouse paying alimony.

The family court granted Wife sole custody of the parties’ minor child and did not require her to obtain a passport to allow Husband to travel with the child to Bulgaria (his place of birth and where his parents still lived). The Court of Appeals upheld the family court. It noted numerous facts supporting the conclusion that Wife was the child’s primary caretaker and numerous disputes between the parties regarding the child’s medical care, sleep, and diet, with Husband often being a disruptive or divisive influence on these disputes. A number of witnesses testified to Husband’s disruptive behavior.

Husband raised two specific objections on the custody issue: the admission of hearsay by the guardian and Wife’s attorney’s attempt to pit the guardian against a medical witness. On the hearsay issue, the Court of Appeals found Husband waived this objection by allowing the admission of the guardian’s report:

A GAL’s testimony and report, which contains evidentiary materials such as hearsay statements from persons interviewed by the GAL, is admissible if the report is made available to the parties and the testifying witnesses are subject to cross-examination.

The Court of Appeals found Wife improperly asked the GAL to comment on the veracity of Dr. Poon’s testimony by asking the GAL to compare Dr. Poon’s in court testimony against Dr. Poon’s previous statements to the GAL. Nonetheless, it found that Husband was not unfairly prejudiced by this testimony:

The GAL’s testimony was cumulative to other properly-admitted evidence illustrating that Husband was aggressive and disruptive. Without objection, the GAL’s report was placed into evidence; the report included accounts from numerous witnesses that stated Husband physically intimidated medical and educational providers. In addition, without objection, the GAL testified she observed the same behavior that other witnesses complained of—“the overbearing physical presence; standing up during meetings; authoritative assertion of his position”—at Husband’s deposition. Dr. Poon testified medical staff at the facility reported that Husband tried to intimidate them by showing up without an appointment. We find that any error in regard to pitting was not unfairly prejudicial to Husband and find no reversible error.

Citation omitted.

The Court of Appeal further found that Husband was not entitled to travel with the minor child to Bulgaria. It noted that Husband had repeatedly lied about his circumstances in Bulgaria, had appeared to have hidden assets in Bulgaria during the marriage, and had informed numerous witnesses of his plans to bring the child to Bulgaria and leave him there.

Husband also argued that the family court should not have awarded Wife an additional $30,000 in attorney’s fees at trial. The Court of Appeals found that the family court considered the appropriate factors in awarding Wife attorney’s fees, including that Wife prevailed on the issues of primary custody of Son and equitable distribution. Additionally, during its discussion of attorney’s fees in the final order, the family court specifically found Husband was uncooperative during discovery, in settlement negotiations, and at trial. Thus it affirmed the trial court’s order.

Wife cross appealed the denial of $1,350 in attorney’s fees she incurred in defending Husband’s 54-issue motion for reconsideration. The Court of Appeals awarded her these fees, finding she had achieved beneficial results in defending this motion and that these results had been sustained on appeal.

Husband appealed the family court’s determination that funds he deposited into a bank in Bulgaria were marital, claiming that they were actually held in trust for his parents. The Court of Appeals affirmed the trial court’s determination. It noted that Husband had repeatedly failed to disclose the existence of this account in sworn statements and had lied numerous times about this account. His parents’ names were not on the account and he provided no documentation that the funds to open the account had come from his parents. Further Husband made numerous deposits and withdrawals into this account during the marriage. Based on this, the Court of Appeals held Husband failed to carry his burden of proving this account was non-marital.

Both parties appealed the family court’s distribution of the marital home. The parties purchased this home seven years prior to separating with Wife contributing $100,000 in proceeds from the sale of a pre-marital home and Husband contributing $15,000. The trial court awarded Wife 60% of the equity. On appeal, Wife argued for 70% and Husband argued for 50%. The Court of Appeals agreed with Wife. It found her greater contribution to the acquisition of this asset, her role as primary homemaker caretaker to the parties’ son, and Husband’s marital misconduct, “resulted in an unfairly low apportionment to Wife in light of the aforementioned circumstances.”

Wife also appealed the family court’s failure to equitable apportion funds that Husband withdrew from his Bank of America account during the marriage that he either transferred to Bulgaria or could not account for. The Court of Appeals affirmed the family court. It found that some of these funds had been equitable divided when the family court divided Husband’s Bulgarian bank account. It further found that Wife could not establish fraud by Husband that was necessary to have these funds be considered part of the marital estate:

[D]espite the family court’s finding that Husband’s financial testimony was not credible, Wife failed to provide clear and convincing evidence that established how the funds were used—whether for marital or nonmarital purposes—after the funds were withdrawn and liquidated. Without further evidence to contravene Husband’s assertion that he may have utilized the funds for marital purchases, we find Wife failed to provide clear and convincing evidence of Husband’s fraud.

Wife also appealed the provision of the family court order that required her to pay Husband’s equitable distribution award in cash, rather than through a transfer of retirement assets. She noted her two main assets in equitable distribution were the marital home, which the family court’s order intended her to keep, and her 401(k). Wife argued she would either need to borrow against the home or liquidate her 401(k) to pay this equitable distribution award in cash and thus the family court’s order failed to properly consider tax consequences. The Court of Appeals affirmed, finding “the [family court] order does not contemplate the sale of the marital residence or the liquidation of Wife’s 401(k). We find no error and affirm the family court on this issue.”

For a number of reasons, I don’t blog on my own appeals until remittitur issues. First, I don’t want to give opposing counsel or the appellate court my honest view of what was decided in my client’s favor that perhaps was questionable. Second, I don’t want to be critical of an appellate court when it is still considering that appeal. Bojilov may be the appeal I am most proud of. Although I have handled over forty appeals in my career, this is the first case I have handled from the initial pleadings to the remittitur. I’m disappointed to have lost the “hidden assets” issue: if Husband has these funds hidden in a safe deposit box or under a mattress somewhere, he has committed a fraud and the courts, despite acknowledging his deceit, have allowed this to happen. Otherwise, we couldn’t have gotten a better result. The ability to control the record on appeal, especially the handling of my client’s own financial declaration, has convinced me more than ever of three points that I would reemphasize for all my South Carolina family law colleagues.

First, Bojilov confirms the importance of accurate financial declarations. I currently have cases on appeal in which my ability to achieve favorable results for my clients is undermined by financial declarations that were clearly not scrutinized by their trial counsel prior to submission. The most important exhibit in most divorce trials is the financial declaration. This document should harmonize with the parties’ financial exhibits and the client’s trial testimony. I will typically fill out page one with my client so we can insure each item is accurate. For child support cases, I will have the client obtain health insurance rate sheets and day care expense records to verify those expenses. Where equitable distribution is at issue, I will have my client provide documentation for the value of every asset and debt subject to equitable distribution to corroborate the accuracy of these values. If a page-two expense appears out of line with the parties’ incomes and socioeconomic status, I will suggest obtaining records documenting these expenses. Treating financial declarations as a nuisance that can be handled by a paralegal, or by the client with minimal or no guidance, is malpractice.

Second, Bojilov confirms my view that every full-time trial attorney should be a part-time appellate attorney. While aware of my reputation for “overtrying” cases, with Bojilov I had exactly the record I wanted for the appeal–all 1,096 pages of it. It is much easier to defend an appeal when one can point to multiple pieces of evidence that sustain the trial court and much easier to obtain reversal when one can point to multiple pieces of evidence that demonstrate error. Making a record is more than mere error preservation at trial: it requires thinking about what one wants to be part of the court record when preparing for trial. There’s nothing like combing through a trial record for factual support of an appeal brief to demonstrate the importance of this task. Every trial attorney should be doing an appeal at least once every few years.

Finally, Bojilov convinces me that in our post-Stoney universe a family court attorney should be thinking “victory or appeal” at the start of every trial. The fees and costs Ms. Bojilov incurred in preparing for and trying a 4 ½ day case were more than double those for defending this appeal and pursuing her cross-appeal. Any litigant who believes his or her dispute is sufficiently important to proceed to trial has a dispute sufficiently important to appeal if these goals are not met at trial. Outside of credibility determinations, the appellate courts are no longer deferring to family court factual findings. The ability to win (or have victory snatched away) on appeal is substantially greater than it was just a year ago.

Folks going through marital litigation–and, less often, folks going through custody disputes– often contact me regarding representation with the expectation that the other side will be required to pay my fee and the concurrent hope that I will work without an initial retainer (or for a low retainer) based upon that expectation. These litigants assume that because the other side is wealthier or a “bad actor,” that party will be ordered to pay their fees and therefore I don’t need them to pay my fees initially.

This is rarely a safe or accurate assumption. Litigants who are informed that the other side will pay most or all of their fees are likely to be disappointed. Attorneys who start these cases with little or no retainer on the assumption that the other side will pay their fees are likely to go unpaid or forgo much of their fee. There are numerous reasons for this.

The most common reason is that one starts the case hearing only one side–the client’s side. Humans lie–and when they don’t lie, they equivocate and exaggerate. Humans under stress are even more prone to this–and domestic litigation is stressful. “There are two sides to every story” is a cliche because it’s true. The other side may indeed be wealthier or a “bad actor,” but often one’s own client has some issues that makes the litigation more complicated than it initially appeared. Until one knows both parties’ positions, it is inadvisable to make predictions on any resolution of attorney’s fees. Basing any advice on this issue when one has only heard one side’s story is foolish.

Even when parties are awarded most or all of their temporary attorney’s fees early in the case, they are rarely awarded advanced suit costs. If the client has paid an initial retainer, the temporary attorney fee award can be applied to ongoing litigation. If the attorney has started work without an initial retainer, that attorney can achieve complete victory at the temporary hearing but still be left without funds to conduct discovery or prepare for mediation and trial.

Further, judges are not automatons and their rulings can be unpredictable. At trial, my clients have been both the beneficiary and victim of rulings in which one side prevailed on most or all contested issues but still wasn’t awarded attorney’s fees. Sometimes the ruling can be explained by a vast income disparity–but not always. In twenty-plus years of domestic litigation, I have yet to have a case in which one party was required to pay 100% of the other party’s fees (outside of contempt proceedings, in which compensatory contempt mandates that a party proving contempt be awarded all reasonable fees to enforce compliance). Litigants expecting this result are bound for disappointment. Attorneys forgoing retainers based upon such expectations are bound to forgo fees.

Additionally, a small subset of litigants engaged in marital dissolution proceedings reconcile. In cases where the attorney started without a retainer, the client has no incentive to pay the attorney’s fee and the attorney has little recourse other than suing the client to force payment. Beginning an attorney-client relationship in which there is this potential for non-payment, and further potential for an adversarial ending, is another strong reason for taking an initial retainer.

Finally, most cases settle prior to trial. Often one will make or receive a settlement proposal that is favorable on most issues but involved a mutual waiver of attorney’s fees (or an offer to pay a small portion of the other party’s fees). Where a client is mostly current on his or her fees, such proposals can be considered solely on the merits of resolving the underlying dispute. However, where one party owes his or her attorney substantial fees, that issue can undermine resolution by leading one party to reject what would otherwise be a satisfactory proposal.

That situation can also create tension between an attorney’s need to do what is best for the client against an attorney’s legitimate interest in being paid for his or her work. I’ve been involved in a few negotiations in which settlement stalled because the other side’s attorney was owed substantial fees and expected my client to pay them as a condition of settlement. When no such offer was forthcoming, that attorney was left with a number of unpleasant options: forgo a good resolution over an ancillary issue; become adversarial with his or her own client over the fee issue; waive payment of some of his or her fees. The easiest way to avoid such problems is to start with the expectation that the client, not the opposing party, will pay for his or her own attorney’s work.

Clients, and especially potential clients, prefer to hear that the other side will pay their attorney’s fees. Litigants have been known to select their attorneys based upon a promise of low or no initial retainer and the expectation that the other side will pay their lawyer’s fees. As noted above, this can create substantial problems when the case nears conclusion. An award of attorney’s fees from the other side should be treated as an unexpected bonus, rather than an anticipated condition, of any resolution. This requires the attorney to look to his or her own client for payment during the litigation rather than expecting payment from the other side at the end of litigation.

My clients get sick of me harping on refining and corroborating their financial declarations before we file them. In the future I will direct them to the April 5, 2017 Court of Appeals opinion in Sweeney v. Sweeney, 420 S.C. 69, 800 S.E.2d 148 (Ct. App. 2017), and remind them how both parties were harmed by financial declarations that were inaccurate or uncorroborated.

Husband initially filed for a no-fault divorce. Wife counterclaimed for an adultery divorce. In discovery and at trial, Husband attempted to diminish the importance of his adultery–claiming it post-dated the parties’ separation when it obviously didn’t. Thus the parties went to trial with a thirty-year marriage, a high-income, at-fault Husband, a marginally employed Wife, and substantial assets. After trial neither party was happy with the results and both parties appealed.

Very little was modified by the Court of Appeals. Husband first argued that permanent alimony should not have been awarded and that the $5,000 per month amount was excessive. In support of this argument, he claimed Wife could save expenses by paying off the mortgage on her home by using a portion of her equitable distribution award, and that her interest in the parties’ Morgan Stanley account would generate her $6,710 per month in investment income based on the historical rate of return.

The Court of Appeals rejected these arguments. As for paying off the mortgage, the Court of Appeals noted that even Husband’s financial expert acknowledged the tax advantages in Wife having the mortgage deduction. If further held that Wife shouldn’t have to invade her equitable distribution proceeds to pay off the mortgage. The bigger problem for Husband’s argument was a filed financial declaration showing him only receiving $785 per month in dividends, interest, trust income, and capital gains. The Court of Appeals found that inconsistent with his argument on appeal.

Husband’s only successful argument on appeal was that the family court should not have equitably divided a Health Savings Account (HSA) that he funded but that was solely owned by one of the parties’ sons. The Court of Appeals found that the parties did not own an interest in this HSA and reversed the family court’s determination that this should be included in the marital estate.

Husband also argued that the family court should not have divided a 100% interest in one of the parties’ investment properties, claiming that one of their son’s owned an interest in that property. Finding that Husband failed to present any evidence of son’s ownership interest, the Court of Appeals rejected this argument.

Husband also argued he should not have been held in contempt for violating a temporary order restraining the parties from invading marital assets absent court order except for $75,000 each party was granted for advanced litigation costs. During the litigation Husband used additional marital funds to pay for the children’s college expenses. He argued that Wife agreed to these expenses and thus he did not have a “bad intent” in withdrawing the funds. The Court of Appeals noted that Husband could have filed a motion authorizing him to use these funds for the children’s college. In rejecting Husband’s claim of lack of bad intent, the Court of Appeals held, “[w]e also decline to create a rule of law in which parties cannot be held in contempt when they do not intend to benefit themselves by violating a court order.”

Husband finally argued that the Court of Appeals erred in awarding Wife an additional $15,000 in attorney’s fees. Noting that Husband earned substantially more than Wife, and was awarded the majority of the marital estate, the Court of Appeals affirmed this award.

Wife’s cross appeal argued that her alimony award was insufficient. First she argued that she should have been imputed minimum wage (currently $1,257 per month) rather than $1,500 per month in setting alimony. The Court of Appeals noted her recent employment history as a garden center worker at $8 per hour and as a tutor at $25 per hour. Further, she could become recertified as a public school teacher. Thus the Court of Appeals rejected that argument.

The Court of Appeals also rejected her argument that $5,000 per month in alimony was insufficient to meet her needs. On appeal she claimed monthly expenses of over $7,000 per month. However, her financial declaration only listed expenses of $6,670 per month. The Court of Appeals concluded that her imputed income, alimony award, and interest from the Morgan Stanley account were sufficient to meet those expenses.

Wife also argued that the Court of Appeals misvalued her 2012 Toyota Prius and the personal effects in the marital home. The Court of Appeals rejected these arguments. At trial, Wife argued the Prius was worth $18,049 while Husband argued it was worth $25,611. The family court awarded it to Wife at a value of $30,000. The Court of Appeals affirmed, finding that there was evidence in the record that the original value was $33,500 and that the family court’s valuation was thus within the range of values presented to the court.

To the extent the family court and Court of Appeals were attempting to value the Prius as of the date of filing, rather than the date of trial, this valuation can probably be justified. The record is not clear if that is what the courts are doing. I have unsuccessfully argued in an unpublished appeal that a party keeping a vehicle should be credited with the depreciation during the litigation proceedings. If that is what the courts are doing here, it would have been useful to make that clear. If that’s not what they are doing it appears the Prius was overvalued.

Wife also argued that the family court overvalued her personal effects in the marital home. She testified they had a value of $7,330, Husband testified that they were worth about $80,000, and neither party presented an appraisal. The family court awarded these effects to Wife at a value of $25,000. The Court of Appeals affirmed this valuation, finding it to be within the range of evidence.

While agreeing with the Court of Appeals’ decision on this issue, I don’t agree that an appraiser was probably necessary to establish valuation. Questions that apparently remained unasked at trial include asking Husband whether he would want the personal effects at a value of $80,000 and asking Wife whether she would want Husband to have them at a value of $7,330. I highly suspect the answers to these questions would have been an empathic “no.” The easiest way to establish values on cross-examination is to determine at what value the party is indifferent as to who is awarded the item. If those question aren’t asked the family court is able to accept any valuation presented by either party, and that valuation is probably going to be affirmed on appeal.

Wife’s one successful issue on appeal was the family court’s failure to treat $4,500 in rental proceeds that Husband deposited into the Morgan Stanley account during the litigation process as marital property. Given that the rental income was from a marital asset, it seems like an obvious error to not treat this income as marital.

Wife finally argued that the award of $15,000 in attorney’s fees was insufficient. In support of this claim she argued that Husband took unreasonable litigation positions and that the temporary order did not already provide her $75,000 in advanced litigation expenses because she used some of those funds for personal expenses. The Court of Appeals rejected both arguments. It found Husband’s litigation positions were not unreasonable. It further found that language from the temporary order that “[e]ach party . . . be advanced $75,000.00 from the parties’ joint savings account (the Morgan Stanley account) to cover any expenses incurred up until the merits hearing, inclusive of attorney[‘s] fees, expert fees[,] or investigative fees” indicated an intention of the court to previously award Wife some advanced litigation expenses. It further noted language from the temporary order that “[t]he responsibility of either party for said fees is to be determined by the court at the time of the merits hearing,” supported this position.

In Sweeney both parties’ arguments at trial and on appeal were undermined by the contents of their financial declarations. One cannot understate the importance of accurate financial declarations.

A few months ago my mentee observed me enforce my attorney fee award through a family court contempt proceeding. Expecting me to prove the contempt through my client’s testimony, she was surprised when I testified first and asked my client very few questions when I called him as a witness.

The method attorneys typically use for enforcing fees awards is to call their client to the witness stand and ask their client about the opposing party’s non-payment and the attempts to collect payment. The problem is the client has little or no first-hand knowledge of these collection attempts. Typically, when attorneys are owed fees from an opposing party, the attorney handles collection attempts. Written communications or conversations to collect fees are most often between the attorney and the opposing party. Having the client testify about the attorney’s collection attempts is awkward. The client is likely merely repeating hearsay from the attorney, and probably lacks the detailed knowledge the attorney has. On cross examination the client may get details wrong and damage the case.

Thus, I typically handle most of the testimony at such fee enforcement proceedings. S.C. Code § 20-3-125 specifically authorizes that any family court “attorney whose client has been awarded an attorney fee by the family court may petition the family court for the circuit in which the order was filed to enforce the payment of such fee.” Moreover, South Carolina’s Rule 3.7 of the Rules of Professional Conduct specifically authorizes attorneys to be witnesses when, “the testimony relates to the nature and value of legal services rendered in the case.” Under this rule I have always been able to testify regarding my attempts to collect fees on my client’s behalf.

If available, I try to have my client appear at such contempt proceedings to testify that he or she would owe me fees if the other side does not pay what is ordered (or that he or she would receive a refund if the other side paid as ordered). I do this because Calhoun v. Calhoun, 339 S.C. 96, 100, 529 S.E.2d 14, 17 (2000), held a pro se litigant could not recover attorney’s fees because “a pro se litigant, whether an attorney or layperson, does not become liable for or subject to fees charged by an attorney.” The family courts have interpreted this to mean an attorney cannot seek his or her own fees on collection efforts if those fees are solely for that attorney’s benefit.

The few times I have proceeded with an attorney fee collection rule without my client’s consent (because the other side owed me fees for work that my client had not paid me for but did not want me collecting either) the court has denied my fee requests for the collection effort. Thus, it is useful to have the client confirm the desire to collect fees. However no other testimony from the client is really needed. Further, if the client is unavailable that testimony is unnecessary so long as the attorney can truthfully testify that the client supports the collection effort.

Having one’s client testify about fee collection efforts when one can do so oneself is inefficient and awkward. It’s easier for the attorney to take the stand.

Put Mr. Forman’s experience, knowledge, and dedication to your service for any of your South Carolina family law needs.

Recent Blog Posts

The Folly of Fighting Child Protective Services after a Merits Finding

Early in my career, when family court attorneys were still being court appointed to represent indigent parents in abuse and neglect proceedings, I

[ + ] Read More

Court of Appeals determines homosexual couples could not enter common law marriage prior to the Condon case

A July 1, 2020, Court of Appeals opinion in Swicegood v. Thomson determined that South Carolina code prohibited homosexual couples from forming the

[ + ] Read More

College related child care is not work-related child care for the purpose of setting child support

There are a number of South Carolina family court opinions that are of narrow relevance but of significant importance when relevant. Such cases

[ + ] Read More