Recent Posts in Costs of Litigation Category

Family law mediators and collaborative attorneys, and those attorneys who decry the shameless lack of ethics on the part of some high conflict divorce litigants and their attorneys, are thrilled with a May 4, 2011, published opinion from Justice Richman of the First Appellate District for California in Marriage of Davenport upholding a bold and incisive decision by trial judge Cerena Wong. 

As it relates to mediation, the decision is important for several reasons: 1) It demonstrates the insane expense that adversary cases can generate; 2) It serves a primer listing the types of conduct and behavior by out of control lawyers that courts - and lawyer's clients - must not tolerate; 3) It affirms a trial court award of $100,000 in sanctions and $304,387 in attorney fees against a Wife (plus paying Husband's costs for the appeal) imposed by reason of the aggravated mismanagement of her case by her attorney and the law firm she'd retained to protect her; and 4) the opinion holds that a lawyer's violation of the rules for mediation confidentiality provided for under Evidence Code section 1119 is grounds for awarding 271 sanctions against the client.

This is the first reported decision in California where a party was ordered to pay Family Code section 271 sanctions and attorney fees in part because their lawyer attempted to disclose matters that arose during mediation. While it is rare that lawyers will cross this confidentiality boundary, it does happen. Marriage of Davenport constitutes notice that failure to honor the mediation privilege may have costly adverse consequences.

As is usually the case in family law disputes over money and property, the people who suffer are the parties themselves. I predict that Davenport will help lead to revisions in our Family Code in 2012/2013 authorizing trial courts to issue sanctions' awards against attorneys and law firms separately from those that may be assessed only against litigants under the current scheme. Given a clear trend among California appellate courts to hold all the professionals in family law cases accountable to the courts and to each other, this is not only inevitable but a wise thing. Otherwise, the system will continue to break down.

I have written extensively on my Mindful Divorces Blog about Davenport as it relates to attorneys who act like attack dogs. Here I discuss the case in terms of its application to mediation. However, this statement from the appellate court summarizes the extent of the trial and appellate court displeasure with Jill Davenport's attorneys:

"'The Court questions the wisdom of such a large firm as O'Brien, Watters to choose to "educate" a newly admitted lawyer with a case that involved millions of dollars of varied assets in California and other states, with a long term marriage and complicated trust holdings. With no background in either civil or family law litigation, Mr. Andrew Watters admitted to the Court that he was taught to litigate this case with unbridled aggression. These uncooperative and uncivil courses of action have caused Mrs. Davenport unnecessary delays and unnecessary attorney fees and costs.'" [Emphasis added].

Sanctions and the Mediation Privilege

Jill and Ken Davenport were married in 1948 and separated in 1990, amassing an estate worth near 57 million dollars. Ken was a talented car salesman and real estate investor. Notwithstanding the break up in 1990, it wasn't until 2006 that Jill filed a petition for dissolution of marriage. During that 16 years "there was agreement and cooperation, including their participation in joint estate planning favorable to Jill, and agreement to sell off many of the [community properties]." Jill was then 75 years of age, and Ken was 78.

This cooperation ended in February, 2006 when something set Jill onto the road to reactivity and calamity. She herself fired the first salvo in the form of a letter to Ken which accused him of having "stepped over the line," having "lied to me," of being taken advantage of by others, and she made a series of demands for money and property. Although the parties had seemingly co-existed peacefully for almost 16 years since separating, the status quo exploded with her February 3, 2006 letter. Wife filed her Disso Petition 30 days later.

What had changed? At about the same time Wife retained the law firm of O'Brien Watters and Davis, LLP, to prosecute her divorce. When Wife's Petition was filed, senior attorney Michael Watters was named as her attorney of record. However, in November 2005 one Andrew Watters (presumably Michael's son and not his brother given the age difference), passed the California Bar and joined the law firm effective February 24, 2006. He was introduced to Jill three days later and became her gladiator in the case, so beginning an odyssey that would continue unabated for the next two years and more. According to Andrew Watters, thereafter he "personally handled or [was] personally involved in each and every transaction between the parties ..., as well as each and every discovery request, discovery event, court proceeding, and other substantive matter." As the First Appellate District court dryly notes, "Early on, a young and inexperienced attorney at that firm [Andrew] became Jill's primary attorney, and interacted with Ken's attorneys for the next two years, interactions that would generate a 35-page register of actions and 19 volumes of court files."

Andrew Watters embarked on a campaign of over-exuberant letter-writing and litigating which was at its core provocative, sneering, sarcastic, rude and offensive, entirely uncooperative, and that therefore generated massive legal fees on the part of the Husband (as well as Watters' own client). For numerous specific examples of what this conduct looked like, please follow the links above to the decision itself and/or my Mindful Divorces Blog.

Ultimately Attorney Watters filed a motion seeking $1 million in fees and sanctions against the Husband, which blew up in his client's face. Not surprisingly, Husband's attorneys filed a similar counter-motion. Husband prevailed.

In describing what conduct justified the trial court's award of more than $400,000 against Jill Davenport the appellate justices outline Mr. Watters' more egregious defalcations. Of interest here is the fact that as part of a declaration he filed to set forth the Husband's alleged uncooperative misconduct, Watters attached "mediation-related documents, set forth what was done and purportedly said in mediation, and referred to agreements reached in mediation." The trial court had found that Jill's counsel "made many references to what was presented and said in mediation in violation of Evidence Code section 1119."