Hallac v. Hallac
| Decision Date | 29 February 2012 |
| Docket Number | No. 4D10-4450,4D10-4450 |
| Parties | JAMILETTE HALLAC, Appellant, v. JEFFREY HALLAC, Appellee. |
| Court | Florida District Court of Appeals |
The wife appeals an attorney's fees award, denying her a portion of her attorney's fees and assessing a portion of the husband's attorney's fees against her, on the basis that she unreasonably refused a favorable settlement offer. We affirm the trial court's denial of attorney's fees to the wife after the date of the settlement offer, because Rosen v. Rosen, 696 So. 2d 697 (Fla. 1997), permits a trial court to consider results obtained in determining a section 61.16, Florida Statutes (2009), attorney's fees award. We reverse the award of attorney's fees to the husband, concluding that the wife's failure to accept a reasonable settlement offer, without other vexatious conduct, does not justify an award of fees to the husband under Chapter 61.
In August 2009, the wife filed a petition to dissolve the couple's seven-year marriage. The parties' financial affidavits revealed that the husband was employed with Weston Capital Management and made in excess of $500,000 per year. The wife had no income. From the affidavits, the parties' lifestyle matched the husband's income. The earliest financial affidavits were incomplete as to the parties' assets. In November 2009, the husband's attorney sent a settlement offer with an asset valuation schedule attached, which would have left the wife with assets worth $95,000 and the husband with a negative marital net worth because of liabilities. The offer did not include the value of an offshore account or for Weston Capital, maintaining that neither were marital assets. The husband's attorney also disclosed the husband's participation in a "tax amnesty program" by reporting the offshore account to the IRS. This resulted in substantial tax and penalties as well as professional fees, forwhich the wife would be responsible if it were a marital asset. In addition to the property settlement, the husband offered to pay $12,000 per month in alimony for one year. In response, the wife's attorney objected to several valuations of various assets, including the offshore account, noting that they had to be investigated.
In January 2010, the wife offered to divide the assets in accordance with her schedule, which would leave her with $230,000 in assets and the husband with $360,000 in assets. The offer included a lump sum alimony payment of $150,000, $8,500 per month in alimony for three years, and modest attorney's fees. The husband counter-offered using the wife's valuations of assets, but re-allocating the marital and non-marital properties, resulting in the wife receiving $239,000 in assets. Additionally, as to alimony, the husband offered either $200,000 in lump sum or $13,000 per month for two years. Finally, the husband offered $20,000 towards attorney's fees. The wife rejected the offer, contending that some of the assets the husband classified as non-marital were marital, particularly the offshore account. She asserted that the husband should bear the responsibility of the tax liabilities and fees that resulted from his conduct. She counter-offered, splitting the assets and requesting $200,000 in lump sum alimony and $10,000 per month for two years. The husband rejected this offer and opted for a trial.
Throughout the course of settlement negotiations, the record reveals several motions to compel by the wife, because the husband did not provide discovery necessary to evaluate the assets. Namely, the wife moved to compel financial disclosure in November following the husband's first settlement offer, which the court granted. The husband did not file a response. In March, after the final settlement offers, the wife again moved to compel discovery, seeking specific financial information on the parties' various bank accounts, assets, and liabilities, and the court granted the motion less than a month before the April trial. The husband filed two responses with the requested information and filed an amended financial affidavit, depicting substantially less income than the previous affidavit.
The case proceeded to trial in April 2010. After hearing the evidence, the court entered a final judgment awarding the wife only $8,000 in bridge-the-gap alimony for nine months and rejecting the wife's claim for rehabilitative alimony. Concerning equitable distribution, the court awarded the wife a net of $178,369. As to the offshore account, the court adopted the wife's position that it was a marital asset but offset from its value a loan payable to the husband's father. The court also offset from its value all of the tax penalties and legal fees associated withthe tax amnesty reporting by the husband, thus rejecting the wife's position that she should not be charged with these expenses. The court accepted the wife's position that at least part of the husband's interest in Weston Capital was marital, but its value was less than that originally advocated by the wife because the business was sold on the eve of trial. The court then discounted the husband's share for "lack of marketability." The wife did not appeal the final judgment.
Both the husband and the wife sought attorney's fees. The wife moved for fees on the traditional grounds of need and ability to pay, noting the husband's substantial income of greater than $500,000 and her non-existent income. The husband contended that the wife's fees should be reduced because of the wife's failure to accept his last offer of settlement, which was significantly better than anything she could have received at trial; the husband also requested that the wife be responsible for the fees he incurred after the date of his last offer.
At the hearing on fees, the court was provided with the various settlement offers. In addition, the wife's accountant testified that the settlement offers kept changing because the valuations, especially as to the offshore account and jewelry, kept changing. He also noted that there was some difficulty in the case because of lack of discovery from the husband. In concluding the hearing, after listening to the testimony and the argument of both counsel, the judge noted that she didn't think that the case had been over-litigated on either side, saying "it's probably one of the more reasonable ones that I've seen in this division."
The court's order on fees found that the wife's rejection of the husband's last offer was unreasonable, because she could not have expected to do better at trial. The court explained that even adopting the wife's characterization of the offshore accounts and the interest in Weston Capital Management as marital, she still could not have expected to receive as much as she was offered in settlement. In making this conclusion, the court determined that, using the wife's figures, she could not have expected more than $141,000 in net assets, whereas the husband's last offer was $439,000 in total. The court concluded that the wife had no rational reason to continue with the litigation after the offer. It therefore denied her attorney's fees for time spent after the husband's last offer and awarded the husband his attorney's fees for time spent thereafter. This amounted to a net award in favor of the husband, which the court ordered paid from the bridge-the-gap alimony award.
The wife appeals the award of attorney's fees, contending that the court abused its discretion in denying her attorney's fees incurred afterthe husband's January 29th offer of settlement and granting fees to the husband solely on the basis of her refusal to accept the offer. The husband, on the other hand, argues that the offer was so reasonable that the wife could not have done better at trial, making any litigation after the offer useless. Thus, he argues, pursuant to Diaz v. Diaz, 727 So. 2d 954 (Fla. 3d DCA 1998) ("Diaz I"), quashed on other grounds, 826 So. 2d 229 (Fla. 2002) ("Diaz I"), and Rosen v. Rosen, 696 So. 2d 697 (Fla. 1997), that the court did not abuse its discretion in its decision on attorney's fees. We review the trial court's order under an abuse of discretion standard. Glantz and Glantz, P.A. v. Chinchilla, 17 So. 3d 711, 713 (Fla. 4th DCA 2009). Our analysis of the issues requires us to separate the denial of the wife's fees and the award of the husband's fees.
While Florida law holds that a refusal to accept an offer to settle a divorce case is not a ground to deny all attorney's fees, the refusal to accept settlement offers is a "relevant circumstance" that a court may properly take into consideration in determining Chapter 61 fees under Rosen v. Rosen.
Decided prior to Rosen, Aue v. Aue, 685 So. 2d 1388, 1388 (Fla. 1st DCA 1997), involved a trial court's denial of attorney's fees to the wife because she was "unreasonable" in refusing to accept an offer of settlement from the husband. In reversing, the First District noted "there is no authority for denying attorney's fees in dissolution cases solely for the failure to accept an offer of settlement." Id. The court noted that "[i]n fact, section 45.061(4), Florida Statutes, specifically exempts dissolution proceedings from the offer of settlement statute." Id.
Just after Aue, our supreme court decided Rosen, approving the Third District's reversal of an attorney's fee award to reconsider attorney's fees in a modification proceeding based upon the "results obtained." See Rosen v. Rosen, 659 So. 2d 368 (Fla. 3d DCA 1995), quashed in part on other grounds, 696 So. 2d at 703. The trial court had awarded attorney's fees in a modification proceeding where the parties had been in litigation over various aspects of their divorce for sixteen years. In its opinion, the Third District reversed many benefits the trial court had awarded the wife and directed the court to reconsider the amount of the wife's attorney's fees award in light of the...
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