What Happens With Court-Ordered Attorney Fees?
Court-ordered attorney fees, also known as "sanctions," involve a court ordering a party to pay a specific amount to the opposing party’s attorney or attorneys. The goal is to reimburse the authorized party for reasonable attorney fees incurred due to the other party’s failure to comply with discovery obligations or an intervening factor. A court may also choose to do this in the event a party is found to have acted in bad faith, or has exhibited dilatory (or overly cautious) behavior in the case. The key to court-ordered attorney fees is that they are only available in a limited set of factual situations. Courts, therefore, rarely award these kinds of fees as a sanction. In recent years, courts have actually been less willing to grant court-ordered attorney fees than in previous years.
California Code of Civil Procedure Section 2030.300 permits a court to award attorney fees where:
- The court finds that one of the parties failed to respond to interrogatories or provided to the propounding party a response that was evasive or incomplete.
- The court finds that a party’s response to document requests or inspection demands was evasive or incomplete.
- The court finds that a party failed to respond to requests for admission or responses were evasive or incomplete.
- The court finds that a party failed to participate in the meet and confer process set forth in the Code of Civil Procedure Section 2016.040.
Awarding court-ordered attorney fees involves "authorizing" the successful party to collect the attorney fees spent in enforcing his or her rights in the subsequent proceeding , but it is not a guarantee as the attorney fees must still be proven to be reasonable. The case law involving court-ordered attorney fees is relatively scant, but includes a California opinion involving sanctions for discovery abuses. The 1995 B&P Construction v. American Int’l Bank case involved a dispute between two banks over payment of a promissory note. The plaintiff’s attorneys attended the deposition of the bank manager, but were unprepared. The court found that the plaintiff’s attorney purposefully delayed the proceedings and the trial court awarded the defendant bank $5,000 in attorney fees to be paid by the plaintiff and his attorneys. The court in B&P stated the following, "The general purpose of the discovery statutes is not to permit a party to conduct a fishing expedition, but rather to enable him to obtain discovery relevant to his causes of action. [Citations.] The statutes should prevent discovery which will not lead to the discovery of admissible evidence and prohibit the use of discovery devices by ‘obstructionist tactics.’ [Citations.] That objective is not served by allowing a party to use a poorly prepared witness to delay the resolution of the case." The B&P Court affirmed the sanctions. If a court finds that a party has failed to comply with a court order, then an award of court-ordered attorney fees is mandatory. Otherwise, the Court may exercise its discretion in whether to award court-ordered attorney fees or not. Courts more commonly award attorney fees under the "bad faith" prong of California Code of Civil Procedure Section 128.5.
Legal Effects of Delinquency
In California, if a party sends a notice of opposition to the other party and files that notice with the court, then the other party must file a response. Neither party should ignore the court’s order. A financial order, including attorney’s fees, is a court order and while many litigants may be tempted to dismiss a family court order as non-enforceable or voluntary, there are actual legal ramifications for choosing to ignore it.
A party who fails to comply with a court-ordered obligation may be held in contempt, which, at its most basic level, means that the person does not believe that the court’s order applies to them. The penalty for a party being found in contempt varies by the action. Under Family Code Section 271, a party may be ordered to pay the other party’s attorney’s fees in addition to other costs incurred as a result of the contempt. Under the contempt statute (Section 1218 of the Code of Civil Procedure), a party may be fined up to $1,000 for the contempt. Under either statute, the court can also impose additional community service.
The court can also order wage garnishments on the party’s income, intercept tax refunds, or order a levy on bank accounts. While there is no automatic jail time or probation associated with failing to pay attorney’s fees, being ordered to pay attorney’s fees can be quite costly. When you additionally consider the cost of contempt proceedings, payment of the outstanding obligation, and attorney’s fees to have the contempt action filed and the judgment enforced, a simple disagreement over attorney’s fees can become an extremely costly business indeed. Compliance is usually the least costly option.
Steps to Take When You Cannot Afford to Pay
The way to address this issue is really a two way street. First and foremost, a litigant needs to consider whether the failure to pay was willful or involuntary. We discussed the ramifications of a willful failure to pay a fee award in our earlier blog post so as to preserve contempt as a remedy. A non-willful failure is more problematic because if it is not accounted for by a pending motion for modification, the only way to simultaneously seek a change in a fee obligation as well as relief under an Order of Commitment is to go back to court to modify the support provisions of an underlying order based upon changed circumstances.
Many litigants who are ordered to pay attorney fees on an ongoing basis, find it difficult to comply with the order after the underlying matrimonial action is settled and they are no longer receiving support from the other party. It is not unusual for a payor spouse to receive a certain sum (an avocational bonus for example), or a large tax return, which may actually result in better income in the future. In that case, without some sort of directive as to when the help will dry up, the attorney is left to guess as to when the process will stop. However, if future bonuses or tax returns are actually going to be less than prior years, this is a basis to address the fee obligation as well. In the event that the payor’s unexpected lack of income is due to termination or early retirement, or increased expenses due to medical or other emergencies, the payor should immediately contact his or her attorney to advise that the fee obligation will not be able to be complied with. Either side can make a simple application to the court to determine the appropriate course. This may include a temporary reduction in the amount of the payment, or the right to make periodic or partial payments over time, along with a reduction in the obligations due to the payee.
Legal Assistance Options
The options to seek assistance from pro bono lawyers, legal aid societies or other legal resources is available to help individuals who have court-ordered attorneys fees. There are various legal resources available to likely assist individuals:
- Pro Bono. Pro bono lawyers and law firms are available to help individuals who are unable to obtain or afford an attorney. There are organizations, such as the American Bar Association and the Association of Pro Bono Counsel, which can refer a potential client to an attorney willing to help on a non-fee basis. Some legal aid societies have attorneys available to assist with this need. Since several cases are presented at any one time, an attorney cannot be guaranteed so be patient.
- Legal Aid Societies. Legal aid societies are regional or local not-for-profit organizations which provide free legal assistance to needy persons. Many legal aid societies do not handle complex family law matters such as contested divorce cases, custody cases, etc. Some legal aid societies provide assistance or representation for people in crisis who may need an attorney immediately. Legal aid society volunteers sometimes advise clients in civil or family law matters, fill out forms , and refer them to appropriate agencies or legal services that can complete their needs.
- Legal Clinic. A legal clinic may be held at a law school, a courthouse, or at a community organization. Volunteer lawyers work side by side with law students, legal assistants or trained paralegals. In some cases, the client is assigned a volunteer lawyer who can take on the case or assist them further in court. These clinics are often based on limited representation.
- Entrust, Inc. Entrust, Inc. (or other assignees of the Court) handles the fee collection and disbursement process for the matrimonial Judges in New York County (Manhattan) Supreme Court, Bronx County (Bronx) Supreme Court, Queens County (Queens) Supreme Court, Kings County (Brooklyn) Supreme Court, and Richmond County (Staten Island) Supreme Court. This requires all attorney’s fees to be paid through the Matrimonial Clerk’s Office and each county has specific procedures. Individuals adopting this procedure will need to speak with a Matrimonial Clerk, or other person designated by the court, to determine procedures, including but not limited to, completing a financial statement and/or any additional request forms, completing a stipulation, requesting a conference, etc.
Avoiding Future Non-Payment
In addition to making an arrangement to pay the owed balance to your legal counsel, it is important to take steps to ensure that this issue does not arise again in the future. The best way to do this, of course, is to meet your financial obligations to your attorney in a timely manner. However, there are other steps you can take to prevent conflicts over attorney fees in the future: • Work with your attorney to set up a payment plan that is realistic and straightforward. This typically includes a deposit plus payments over a set period of time. If you are unable to pay the deposit, determine if there is a way to work out a plan where a deposit can be paid off over a period of several months. • If you have concerns about your ability to pay legal fees going forward , communicate these to your lawyer. You may be able to come up with an alternate arrangement that avoids payment problems. • Make sure you’re honest with your lawyer at the point when you hire him or her about your ability — and willingness — to pay. Be up front if you feel that you will have to take a break from your case because of financial struggles, and consult with your attorney about what this would mean for both your case and your attorney-client relationship. The bottom line is that courts take attorney fee disputes seriously, and if debt is building up in your account with your attorney or law firm, you could wind up losing your right to representation if this debt goes unpaid.