Tydings v. Tydings

• Decision Date: 13 December 1989
• Docket Number: No. 87-1492.,No. 87-1491.,87-1491.,87-1492.
• Parties: Joseph D. TYDINGS, Appellant, v. Terry H. TYDINGS, Appellee.
• Court: D.C. Court of Appeals

567 A.2d 886

Joseph D. TYDINGS, Appellant, v. Terry H. TYDINGS, Appellee.

No. 87-1491.

No. 87-1492.

District of Columbia Court of Appeals.

Argued September 26, 1989.

Decided December 13, 1989.

Mark London, with whom Barbara S. Dougherty, Washington, D.C., was on the brief, for appellant.

Peter R. Sherman, with whom Mark S. Carlin, Washington, D.C., was on the brief, for appellee.

Before TERRY, SCHWELB, and FARRELL, Associate Judges.

FARRELL, Associate Judge:

This is an appeal from two post-trial judgments entered following a decree of absolute divorce and attendant division of marital property. In the first, the trial court granted, in part, Mrs. Tydings' motion for attorney's fees, expert witness fees and costs pursuant to D.C.Code § 16-911(a)(1) (1989). The second judgment granted Mrs. Tydings' motion for an accounting as to two distributions of income received after trial by Mr. Tydings from his ownership interest in a company known as Railroad Car Enterprises ("RCE"). The decree of divorce and distribution of marital property are not otherwise challenged.

The primary issue before us is whether the trial court had discretion to require Mr. Tydings to pay any portion of his spouse's attorney and witness fees given the fact that Mrs. Tydings became, in appellant's words, a "very wealthy woman" as a result of the marital property distribution. Alternatively, appellant argues that the fee award was too high. We conclude that, although the award of attorney and expert witness fees was indeed high in comparison to awards reviewed in our prior reported decisions, the trial court did not abuse its discretion either in awarding fees or in the amount it ordered, given the complexity of the litigation and the respective financial abilities of the parties. We also reject appellant's challenge to the two RCE distributions.

I.

From the outset, it was apparent that the contested aspect of this divorce litigation involved solely the distribution of financial assets worth millions of dollars acquired by Mr. Tydings before and during the marriage. In two pretrial orders, the trial court ordered Mr. Tydings to pay a total of $50,000 toward attorney and accountant fees incurred by Mrs. Tydings in preparation for trial. On the second occasion the court explained:

It is apparent that some of the major issues in this case will involve tracing of hundreds of thousands of dollars and the valuation of numerous and complex property interests. Mrs. Tydings' need for exhaustive effort of high quality experts is equally apparent.

Following discovery and a trial that lasted four weeks, the trial court issued a 137-page order dissolving the marital bonds and disposing of most of the large number of issues of property valuation and distribution, but reserving for a further hearing the issue of attorney's fees.¹ As a result of the property distribution, Mrs. Tydings received assets worth somewhat more than $1.5 million, while Mr. Tydings retained assets worth approximately $5 million.

Mrs. Tydings filed a post-judgment request for attorney's fees, expert witness and accountant fees, and costs totalling approximately $232,000, minus the $50,000 that had been awarded pendente lite. Following a hearing, the trial court issued a judgment setting forth and applying the criteria established by this court's past decisions for the award of fees. The court recognized that the award of fees is discretionary under D.C.Code § 16-911(a)(1), and that the inquiry in essence is twofold: whether to award any fees and to whom; and if so, in what amount. On the first question, the court considered the motivation and behavior of the litigants and any unnecessary burden which conduct by one party had imposed on the other. The court found that "neither party engaged in this litigation for an improper motive," but that the proceedings were "nevertheless burdensome and oppressive to the Wife," as "the Husband has taken positions during this litigation which the Court would characterize as `inflexible'. . . ." Turning to the amount of the award, the court considered each of the factors articulated in this court's decisions, viz., the reasonableness of the fees sought by the wife, the quality and nature of the services performed by her attorneys, the necessity for those services, the results obtained, and the respective financial abilities of the parties. Significantly, the court found that Mr. Tydings did not dispute the reasonableness of the amount requested by the wife or the quality and nature of the services performed in her behalf:

The Wife clearly needed the services of her counsel and her experts. The Husband was represented by two well-respected and excellent counsel. He had the services of his large law firm available to him without charge. The Wife required counsel of commensurate abilities to represent her. The voluminous records and documentation involved, the number and complexity of the assets, and the Husband's legal positions required somewhat extensive discovery; a trial that was complicated and lengthy; and expert witnesses' services and testimony.

The court also considered the respective abilities of the parties to bear the costs of litigation:

As between the parties, the Husband has a far grater ability to pay and contribute to the Wife's suit money than does the Wife. The Court has heard and considered the testimony of the Husband's counsel regarding the Husband's present financial circumstances and the dissolution of his law firm. The Court finds that the Husband's income has decreased substantially. Although the Wife will have significant income from spousal support and potential earnings from assets awarded to her, she will not have an amount close to that earned by the Husband from all sources, even at his decreased level. The Court estimates that her income from all sources will be approximately one-third that of the Husband's income from all sources. The Husband was awarded over seventy percent (70%) of the marital property and he, unlike the Wife, has substantial separate property.

The court therefore ordered appellant to pay Mrs. Tydings $154,872, or approximately two-thirds of the attorney's fees, expert witness fees and costs incurred in her defense, less a credit of $50,000 for the sums paid pendente lite.

II.

D.C.Code § 16-911(a)(1) provides in part that "[d]uring the pendency of an action for divorce . . . the court may . . . require the husband or wife to pay . . . to the other spouse . . . suit money, including counsel fees, to enable such other spouse to conduct the case. . . ." As the trial court recognized, this court's decisions have established

a two-step inquiry in cases in which a fee is awarded: first, whether to award a fee, and if so, to whom. Only when that preliminary decision has been made does the court further exercise its discretion in setting the amount.

Steadman v. Steadman, 514 A.2d 1196, 1201 (D.C. 1986).

On appeal, appellant does not question the reasonableness of the expenses set forth by Mrs. Tydings in support of her post-trial request for fees and costs. Necessarily, he also does not dispute the reasonableness of the expenses reflected in the $154,872 awarded by the trial court, which reduced the requested amount by about one-third. Mr. Tydings also does not maintain that the trial court failed to take into account Mrs. Tydings' own financial ability in setting the specific amount of the award. Rather, his primary argument on appeal questions the legitimacy, under our statute, of any reimbursement for attorney or expert witness fees arrived at by comparing the respective financial abilities of the two spouses — at least when the requesting spouse's means have reached a certain level. Appellant points to the fact that, as a result of this litigation, Mrs. Tydings was made wealthy by any measure. He asserts that § 16-911(a)(1) is in derogation of the traditional `American Rule requiring the parties to bear their own costs of litigation regardless of outcome,² and therefore a shift of counsel fees and other costs of suit is permissible only when a spouse otherwise is not strictly "able" to conduct the suit, or is considerably less able than Mrs. Tydings became as a result of the divorce. As a corollary, appellant argues that a fee-shift is allowable under the statute only when the litigative conduct of the party ordered to pay fees constitutes "bad faith" or deliberately oppressive behavior, as that is the only relevant instance when the American Rule would permit a fee shift. See Synanon Foundation, Inc. v. Bernstein, 517 A.2d 28, 37 (D.C. 1986). We are unpersuaded by these arguments.

A.

Appellant's contention that only strict inability to pay, or at least a need far more pressing than Mrs. Tydings could demonstrate, suffices to permit a fee award under § 16-911(a)(1) is inconsistent with our prior decisions. In Rachal v. Rachal, 489 A.2d 476 (D.C. 1985), we remanded an award of attorney's fees for further consideration because of concern that punitive considerations had influenced the trial court's calculation of the amount of fees to be awarded the wife. We explained that, while the conduct of the parties could properly play a part in the decision whether to award fees and to whom, ultimately, lain award of attorney's fees should be based on the actual services performed by the attorney in question. . . ." Id. at 478. We went on to explain that, in addition to attorney-related matters such as the quality of the services rendered and the difficulty of the case, the court in fashioning an award can properly take into account "the respective earning capacities of the parties." Id. We pointed specifically to the trial court's finding "that the husband's income was double that of the wife." Id. at 478 n. 3. Our opinion thus impliedly rejected the notion that a spouse's need for attorney's fees must be judged in isolation, without comparison to the other spouse's ability to pay. In S...