Nakamoto v. Hsu (In re Nakamoto)
| Decision Date | 04 May 2022 |
| Docket Number | G059108 |
| Citation | 79 Cal.App.5th 457,294 Cal.Rptr.3d 424 |
| Parties | IN RE MARRIAGE OF Christine NAKAMOTO AND Daniel HSU. Christine Nakamoto, Respondent, v. Daniel Hsu, Appellant; Brion Corporation et al., Claimants and Respondents. |
| Court | California Court of Appeals Court of Appeals |
Masson & Fatini, Richard E. Masson and Susan M. Masson, Irvine, for Appellant.
Minyard Morris, Alexander Payne, Newport Beach; Garrett C. Dailey, Oakland, for Claimants and Respondents.
In this appeal, Daniel Hsu (Daniel) asks that we reverse the trial court's decision denying him need-based attorney fees under Family Code section 2030.1 The actual dispute underlying his request for attorney fees is not currently at issue. However, it is integral to the court's attorney fees ruling and is briefly described below.
This is a marriage dissolution proceeding between Daniel and Christine Nakamoto (Christine; together, the spouses). But the dispute at issue is between Daniel and his two siblings, Charleson Hsu (Chau) and Melissa Hsu See (Melissa). After their parents passed away, Daniel claimed Chau was concealing a portion of his inheritance. The siblings met on March 1, 2006, to discuss Daniel's claims. They reached an agreement at the meeting, which Daniel documented on a two-page handwritten memorandum (the Handwritten Agreement). Among other things, the Handwritten Agreement stated Daniel was to be paid $4 million. Several months later, the three siblings executed a formal Compromise Agreement for Structured Settlement (Compromise Agreement). The Compromise Agreement contained many of the terms set forth in the Handwritten Agreement but did not mention the $4 million payment.
The spouses claimed Daniel was never paid the $4 million, which would be a community asset, and that it is still owed to him under the Handwritten Agreement. Chau and Melissa asserted the Handwritten Agreement was not a binding contract and that Daniel had already been paid $4 million through a separate transaction outside the Compromise Agreement. Chau, Melissa, and several business entities they own (together, claimants) were involuntarily joined to this dissolution proceeding to settle this dispute. At trial, the primary question facing the lower court was whether the Handwritten Agreement or the Compromise Agreement was the enforceable contract. The court found in favor of claimants, ruling the Compromise Agreement was enforceable while the Handwritten Agreement was not. Daniel sought interlocutory review of this order, but his request was denied.
Meanwhile, over the course of Daniel's litigation against claimants, the court awarded him $140,000 in attorney fees under section 2030. After the court issued a tentative ruling finding the Handwritten Agreement was not enforceable, Daniel requested an additional $50,000 for attorney fees incurred during trial plus another $30,000 to appeal. The court denied his request. As to the fees incurred during trial, the court found Daniel had overlitigated this case. It denied Daniel's request for appellate fees due to his failure to show reasonable grounds to appeal. Daniel now appeals this denial, arguing the court erred by denying his request for attorney fees.
We affirm the court's postjudgment order. The court's finding that Daniel overlitigated this case is supported by substantial evidence. As to the denial of appellate fees, the trial court acted within its discretion in finding Daniel failed to show reasonable grounds to appeal. Daniel's purported grounds for challenging the court's ruling in a prospective appeal are conclusory and only focus on the evidence favorable to his claims. He fails to address any of the evidence supporting the court's conclusion that Daniel and his siblings did not intend for the Handwritten Agreement to be a final contract. Nor does he explain how this finding is unsupported by substantial evidence. As such, we cannot conclude the trial court acted arbitrarily or capriciously when it determined Daniel had not shown reasonable grounds to appeal.
Daniel and Christine married in 2002. Christine filed this marriage dissolution action in 2011. The underlying dispute in this appeal concerns a disagreement between Daniel and his two siblings, Chau and Melissa, over Daniel's family inheritance. In short, Daniel believes Chau, Melissa, and several family-owned business entities, including Sun Ten Pharmaceutical, California (Sun Ten) and Brion Corporation owe him $4 million.2 It is undisputed this alleged sum is a community asset per a transmutation agreement Daniel signed the day he wed Christine. Daniel litigated this claim against claimants in the divorce proceeding and lost. While this appeal only concerns the court's denial of Daniel's request for attorney fees, the underlying conflict is material to the fee issue. Thus, we review the history of this dispute below.3
Daniel, Chau, and Melissa are the only children of Dr. Hong-Yen Hsu (Hong-Yen) and Dr. Ruth Lin-Run Hsu (Ruth), who accumulated substantial wealth during their lifetimes. Hong-Yen and Ruth were originally from Taiwan, where they started several businesses, and immigrated to the United States in the 1970s. Hong-Yen passed away in 1991, and Ruth passed away in 1998. Ruth was the executor of Hong-Yen's estate after his death, and all three children were co-executors of Ruth's estate when she passed. The Final Order of Distribution for Ruth's estate was filed in 2000, and the estate's final tax return was filed in 2002. Still, the total value of Ruth's estate was opaque and appears to be a source of friction. During trial, Daniel estimated her estate was worth $60 million, which Chau disputes. We have not been pointed to any other evidence in the record that either substantiates or discredits Daniel's estimate. Regardless, the exact value of her estate is immaterial to this appeal.
Around 2005, Daniel became convinced Chau was hiding a portion of their parents' estate from him. He hired an attorney to assist him in obtaining his portion of these allegedly hidden assets. The three siblings met in Irvine on March 1, 2006, to address Daniel's allegations. Though Daniel and Chau had both consulted with attorneys about Daniel's claims, no attorneys attended the meeting. Rather, it was informally mediated by a mutual family friend, Herb Shen (Shen). After hours of discussion, the siblings reached a general agreement. It was documented in the Handwritten Agreement, a terse two-page memorandum handwritten by Daniel partially in Chinese and partially in English. All three siblings and Shen (as a witness) signed the Handwritten Agreement on March 1, 2006.
The only portion of the Handwritten Agreement written in Chinese is the first half of first sentence, but the parties agree on its English translation. The remainder is written in English. In its entirety, the Handwritten Agreement states, " "
Aurie, Lin-Ling, and Hansdale are Daniel's children from a prior marriage. Brion Corporation is a California Corporation that was previously owned by Hong-Yen and Ruth. Following their deaths, its shares were owned by the Chau, Melissa, and Daniel. Aurie, Lin-Ling, and Hansdale appear to have owned an indirect interest in Brion Corporation shares through their father, Daniel. It appears the "Foundation" referred to in the Handwritten Agreement is the Hong-Yen and Lin-Run Hsu Charitable Foundation (the Foundation), a California nonprofit public benefit corporation.
In the underlying litigation, the parties dispute whether the Handwritten Agreement was meant to be a standalone contract or a memorandum of general points to be later incorporated into a formal written contract. The primary disagreement appears to be whether or not Daniel is still owed the $4 million set forth in the Handwritten Agreement. The conflict arises from the parties' divergent perspectives of the events that occurred after March 1, 2006.
It is undisputed that on September 12, 2006, Daniel met with Shen in Taiwan and signed several documents. Chau and Melissa were not present at this meeting. One of these documents, the primary document at issue here, was the nine-page Compromise Agreement entered into by Daniel, Chau, and Melissa. Though it was signed by Daniel in September 2006 (it is unclear when Chau and Melissa signed), the Compromise Agreement provided that "[u]pon full execution of this Agreement, the parties agree that it shall be deemed effective as of March 1, 2006."
Under the Compromise Agreement, Daniel agreed to give up all claims to his parents' estate and to sell his shares in Brion Corporation to Chau for $100,000, eliminating his interest in the company. The Compromise Agreement further required Daniel to resign as director of the Foundation and as a cotrustee of a subtrust of the Hsu Family Trust, and he concurrently executed separate formal resignations. In exchange, Brion Corporation would retain Daniel as a senior manager with a salary of $100,000 per year plus health insurance, and he would be employed until the earlier of his death, incapacity, or his 66th birthday, which was in May 2011. Significantly, though, the Compromise Agreement did not mention the $4 million payment discussed at the March 1, 2006 meeting.5
The same day he signed the Compromise Agreement, Daniel also signed various documents concerning a parcel of real property on Roosevelt Road in Taipei, Taiwan (the Roosevelt Property). Daniel owned the land and co-owned a building on the property with Chau. Initially, Daniel had...
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