Diaz v. Diaz

• Decision Date: 04 November 1998
• Docket Number: No. 97-334.,97-334.
• Citation: 727 So.2d 954
• Parties: Diosdado C. DIAZ and Dennis Haber, Esq., Appellants, v. Rina Cohan DIAZ and Leinoff & Silvers, P.A., Appellees.
• Court: Florida District Court of Appeals

727 So.2d 954

Diosdado C. DIAZ and Dennis Haber, Esq., Appellants, v. Rina Cohan DIAZ and Leinoff & Silvers, P.A., Appellees.

No. 97-334.

District Court of Appeal of Florida, Third District.

November 4, 1998.

Rehearing Denied April 7, 1999.

Deborah Marks, North Miami; Dittmar & Hauser and Helen Hauser, Coconut Grove, for appellants.

Leinoff & Silvers and Mark Gatica; Ellis Rubin, and Robert I. Barrar, Miami, for appellees.

Before SCHWARTZ, C.J., and COPE and GODERICH, JJ.

COPE, Judge.

In this post-judgment proceeding, the former husband in a dissolution action and his counsel appeal an assessment of attorney's fees against them. We affirm.

Appellant Diosdado Diaz and appellee Rina Cohen Diaz were married in 1984. At the time of the marriage, Rina owned certain shares of stock in her father's privately held corporation and was the beneficiary of a trust established by her father. The trust held shares of the father's corporations and was revocable. However, Rina received the income from the trust which was used to supplement the income she was then earning as a member of the Dade County State Attorney's office. Because the shares were already owned and the trust had been previously established, the parties entered into a pre-nuptial agreement whereby Diosdado waived any claim to any interest in shares of Rina's father's corporations. At the time of the marriage Diosdado was a career police officer.

During the marriage, the parties maintained separate finances in all respects, except that the parties filed joint income tax returns. The parties resided in a home already owned by Rina for which she continued to pay all expenses. Because Diosdado consequently had few expenses, he was able to make substantial contributions to retirement and deferred compensation funds for which he was eligible. Rina left the State Attorney's office and opened a private law practice.

During the marriage the parties maintained a comfortable lifestyle, living in the home Rina owned and driving modest cars, but enjoying some fine dining and travel which was paid for by Rina's parents. Rina's family provided other gifts for the family, but the parties also incurred $36,000 in credit card debt.

In 1989 the parties' daughter was born. Rina became essentially a full-time caregiver and earned very little income from her law practice. Because of Rina's separate income from the trust it was not necessary for Rina to practice law.

The parties separated in June 1994, and in the fall Rina made a pre-suit settlement offer in hopes of resolving the dissolution of marriage by agreement. Rina requested that Diosdado pay approximately $200 per month in child support, an amount well below the child support guidelines, and maintain health insurance for the child. Under the proposal, neither party would receive equitable distribution or alimony from the other. During the marriage Diosdado had accumulated $325,000 in pension and deferred compensation benefits, which were marital property; under the settlement proposal, these assets would have remained his alone. Rina's significant assets, by contrast, were all nonmarital. Diosdado refused the settlement offer and made no counteroffer.

In November 1994, Rina filed a petition for dissolution of marriage. Diosdado filed a counterpetition in which he asked, among other things, for permanent alimony. Both parties agreed that Rina should have primary residential responsibility for the child.

Diosdado thereafter attempted to obtain discovery relating to the trust, the assets of the trust, the income earned thereby and the assets of the corporations. Eventually, Diosdado conceded that the trust and its assets were nonmarital property and ceased his efforts to make them part of the marital estate. He continued to press his claim for alimony. In March 1995, Rina made a subsequent offer to settle for $500 per month in child support plus health insurance, but with each party maintaining their assets. That offer was also rejected and no counteroffer made. Mediation was unsuccessful.

The case ultimately went to a three-day trial. In the final judgment of dissolution, the trial court denied Diosdado's alimony claim. The court found that $325,000 of Diosdado's pension and deferred compensation plans were marital and awarded Rina a twenty-five percent share. The court ordered Diosdado to pay $600 per month in child support, pursuant to the guidelines, plus health insurance. Both parties appealed and the judgment was affirmed.

Pursuant to a reservation of jurisdiction, the trial court conducted an evidentiary hearing on the wife's motion to assess attorney's fees against Diosdado and his counsel.¹

The trial court found that "Respondent exercised bad faith in litigating these proceedings and caused a dissipation of assets and expenditure of funds in a wasteful and inappropriate fashion." The court then determined that the husband and his counsel should be responsible for paying $40,000 of the wife's attorney's fees and court costs, leaving the wife responsible for $32,000 in attorney's fees and court costs. The husband and his counsel have appealed, contending that there was no authority for such an award, and alternatively, that under the circumstances the attorney's fee award is unreasonable.

We begin with the Florida Supreme Court's recent decision in Rosen v. Rosen, 696 So.2d 697 (Fla.1997), which interpreted section 61.16, Florida Statutes. Section 61.16 authorizes the trial court, "after considering the financial resources of both parties, [to] order a party to pay a reasonable amount for attorney's fees, suit money, and the cost to the other party of maintaining or defending any proceeding under this chapter...." § 61.16(1), Fla. Stat. (Supp.1996). The court said:

[P]roceedings under chapter 61 are in equity and governed by basic rules of fairness as opposed to the strict rule of law.... The legislature has given trial judges wide leeway to work equity in chapter 61 proceedings. Thus, section 61.16 should be liberally—not restrictively—construed to allow consideration of any factor necessary to provide justice and ensure equity between the parties.

Section 61.16 constitutes a broad grant of discretion, the operative phrase being "from time to time." The provision simply says that a trial court may from time to time, i.e., depending on the circumstances surrounding each particular case, award a reasonable attorney's fee after considering the financial resources of both parties. Under this scheme, the financial resources of the parties are the primary factor to be considered. However, other relevant circumstances to be considered include factors such as the scope and history of the litigation; the duration of the litigation; the merits of the respective positions; whether the litigation is brought or maintained primarily to harass (or whether a defense is raised mainly to frustrate or stall); and the existence and course of prior or pending litigation. Had the legislature intended to limit consideration to the financial resources of the parties, the legislature easily could have said so.

... We further find that a court may consider all the circumstances surrounding the suit in awarding fees under section 61.16. Moreover, in situations where a court finds that an action is frivolous or spurious or was brought primarily to harass the adverse party, we find that the trial court has the discretion to deny a request for attorney's fees to the party bringing the suit.

696 So.2d at 700-01 (citations omitted; emphasis added).²

Here the wife made a presuit effort to settle this case with a very generous settlement offer. The trial judge concluded, and we agree, that under any reasonable analysis at the start of the case, it should have been clear that the husband could not do better, and most likely would do much worse, by litigating the case. Despite overwhelming odds of a litigation disaster, the husband rejected settlement, made no counterproposal, and embarked on an expensive and wasteful litigation strategy.

From a child support standpoint, the wife proposed that the husband pay approximately $200 per month in child support, an amount which was far below the child support guidelines. It should have been clear at the outset that in the event of litigation, the husband likely would have to pay guidelines support, and that was the ultimate result. In the end Diosdado was ordered to pay $600 per month.

From an equitable distribution standpoint, the marital home, the wife's stock, and the trust assets were all the wife's separate nonmarital property and had maintained that separate status throughout the marriage. The only significant marital asset was the portion of the husband's pension and deferred...