Kaiser v. Harrison
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IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
JANUARY TERM 2008
GREGORY A. KAISER,
Appellant/Cross-Appellee,
v.
Case No. 5D06-2826
TRACEY L. HARRISON,
Appellee/Cross-Appellant.
________________________________/
Opinion filed May 23, 2008.
Appeal from the Circuit Court
for Brevard County,
Morgan Reinman, Judge.
Gregory A. Kaiser, Bradenton, pro se.
Thomas R. Townsend, Jr. of
Thomas R. Townsend, P.A.,
Rockledge, for Appellee/Cross-Appellant.
THOMPSON, E., Senior Judge.
Gregory Kaiser ("Kaiser") challenges the trial court's final judgment on his
amended supplemental petition for modification of final judgment establishing paternity
and the supplemental counterpetition for modification of child support filed by Tracey
Harrison ("Harrison"). Kaiser appeals a $35,000 award of attorney's fees to Harrison
and an order that he pay 57% of the child's private school expenses. Harrison cross
appeals contending, the trial court erred in not considering her expert witness's
testimony to impute income to Kaiser for child support or her exhibit evidence that he
used business income to pay his personal expenses. We affirm in part and reverse in
part.
The trial court entered a final judgment of paternity on 13 April 1999. The original
final judgment of paternity decreed shared parental responsibility, awarded Harrison
primary residential custody and $595.62 in non-retroactive monthly child support, and
established that Kaiser would provide the majority of the transportation to facilitate
visitation.
Kaiser sought to amend the final judgment by filing a supplemental petition
in 2001 and an amended supplemental petition for modification in 2003.
The trial
court's ruling on Kaiser's amended supplemental petition and Harrison's counterpetition
for modification of child support are the basis for this appeal.
After five days of hearings, the trial court entered a final judgment of modification.
The trial court entered a detailed order granting Harrison sole parental responsibility,
approving the child's continued attendance at Park Avenue Christian Academy,
determining child support from the time of filing in September 2001 and for each
ensuing year, awarding Harrison $1507.82 for child support arrears, ordering Kaiser to
pay 57% of the child's private school expense, and awarding Harrison a contribution of
$35,000 toward her attorney's fees and costs. At the conclusion of the hearing, Kaiser
requested the court conduct an evidentiary hearing on attorney's fees if it was inclined
to rule on the issue. The court responded that normally a party made this request at the
beginning and then ended the hearing without ruling on the request.
Both parties presented expert witnesses to testify about Kaiser's income and
expenditures. Harrison's CPA, Lawley, was accepted as an expert in accounting and
tax. Lawley testified that he reviewed Kaiser's records from 2000 through 2003. These
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records included corporate bank statements for his law practice and Kaiser Holding
Corporation, personal accounts, miscellaneous documents, credit card statements,
financial affidavits, receipts for some purchases, as well as individual and corporate tax
returns. Lawley compared these records to his other attorney clients, two of whom had
similar practices to Kaiser: an elder law practice and a criminal law practice. After
evaluating several years of their gross income-to-compensation figures, he opined that
36% of Kaiser's gross income would be a reasonable percentage of his gross income to
compensation. He theorized that Kaiser's drastic drop in compensation as a percentage
of his practice's gross income for years after 2000 was due to either the payment of
personal expenses by the business, underreporting of income, or both. Using the 36%
figure applied to Kaiser's gross income records, he calculated Kaiser's personal gross
income to be $135,000, $125,085, $172,530, $149,649, and $122,069, for the years
2000-2004, respectively. He also testified that his services to Harrison over the last few
years, including his trial testimony, were billed ats $8435. He currently billed $215 per
hour, but his rate in 2003 was $195 per hour.
Kaiser's CPA expert, Rabb, was also accepted as an expert in tax and
accounting and testified to the speculative nature of Lawley's cross-correlative approach
to Kaiser's income. Rabb testified that Lawley's cross-correlation analysis was seriously
flawed and did not produce reliable results. Rabb prepared Kaiser's tax returns based
on information supplied to him; he did not utilize general ledgers. Thus, he had no
opinion whether Kaiser's personal expenses were paid by the business.
Kaiser appeals the denial of a hearing to present evidence of settlement offers to
dispute the reasonableness of the attorney's fee award.
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The parties filed their
respective fee affidavits in open court. Despite the limited record to demonstrate the
extent of the court's consideration of the fee affidavits, Kaiser cannot demonstrate that
the court did not fully consider them. He requested for the first time, at the hearing's
conclusion, that the court consider offers of settlement and other attempts to dispense
with litigation in awarding attorney's fees; however, the issue of attorney's fees had
already been raised and exhibits received days earlier.
The trial court has broad discretion to award attorney's fees and, on appeal, a
reviewing court will reverse a fee award only if there has been an abuse of discretion.
Schmitz v. Schmitz, 891 So. 2d 1140 (Fla. 4th DCA 2005). The authority to award
attorney's fees in this case derives from section 61.16, Florida Statutes (2005). See
P.A.G. v. A.F., 602 So. 2d 1259, 1260 (Fla. 1992) (approving award of attorney's fees
under section 61.16 when modification of child support brought in adjudicated paternity
action). Section 61.16 gives a broad grant of discretion to award attorney's fees and
costs, depending on the circumstances and after considering the financial resources of
both parties. Rosen v. Rosen, 696 So. 2d 697, 700 (Fla. 1997).
Kaiser's motion for rehearing argued that the trial court failed to conduct an
evidentiary heari ng on attorney's fees to address offers of settlement, improperly
considered the retained earnings of his Subchapter S business, and failed to consider
his poor credit rating or request for pro se attorney's fees.
He did not specifically
dispute the reasonableness of Harrison's counsel's fees or hourly rate.
There is no requirement that the court conduct an evidentiary hearing for Kaiser
to present evidence of offers of settlement. Although trial courts in marital dissolution
proceedings have the authority under section 61.16 to deny fees for various forms of
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litigation misconduct, there is no authority for denying attorney's fees in dissolution
cases solely for the failure to accept an offer of settlement. Levy v. Levy, 900 So. 2d
737, 748 (Fla. 2d DCA 2005).
Attorney Townsend, Harrison's counsel, submitted a detailed affidavit showing
352.2 attorney and legal assistant hours for a total of $48,666.50, plus $4292.81 in total
costs, for a grand total of $52,959.31. The court's order referenced fees and costs
expended by various parties on Harrison's behalf of $62,619.31. These parties included
attorneys Townsend, Gutin, Flajole, and CPA Lawley.
There is sufficient evidence of attorney Townsend's fees and costs for the trial
court to make the requisite findings as to their reasonableness. However, the evidence
is deficient to support any finding as to the reasonableness of the other attorney's or
CPA Lawley's fees and costs. The trial court must make findings to substantiate the
awards and allow for meaningful review. Rowl v. Rowl, 864 So. 2d 1236, 1238 (Fla. 5th
DCA 2004). The record includes evidence that Harrison wrote a $250 check to attorney
Gutin and that attorney Flajole billed her $975 for 6.5 hours, but there are no affidavits
supporting the services they rendered. Neither Flajole nor Gutin testified during the
hearing. Similarly, CPA Lawley simply testified that his accounting services and expert
testimony were billed at $8435.
Although the court found $62,619.31 represented
reasonable fees and costs expended on Harrison's behalf, it made no findings of the
reasonableness of the hours or the hourly rate. Therefore, we reverse the fee award
because the trial court failed to make specific findings as to the number of hours
reasonably expended and an hourly rate. See Saporito v. Saporito, 831 So. 2d 697, 701
(Fla. 5th DCA 2002).
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Upon remand, if sufficient evidence was presented in the trial proceedings, the
trial court shall make the findings required by Rowe 1 and award a reasonable fee. See
Simpson v. Simpson, 780 So. 2d 985, 989 (Fla. 5th DCA 2001). Conversely, Harrison
is not entitled to any fee on remand if she failed to present sufficient evidence to
establish the necessary factors. Id.
The trial court made findings as to Harrison's and Kaiser's incomes and net
worth, negative $81,750 and $167,592.23, respectively. The court also considered
Kaiser's self-representation during the proceedings in rejecting his application for an
attorney's fee award of $142,635.61. The parties' financial resources are the primary
factor in determining an attorney's fee award. Other relevant factors to consider are the
scope and history of the litigation, the duration of the litigation, the merits of the
respective positions, whether the litigation was brought or maintained primarily to
harass (or whether a defense was raised mainly to frustrate or stall), and the existence
and course of prior or pending litigation. Rosen, 696 So. 2d at 700. Thus, section
61.16 should be liberally - not restrictively - construed to allow consideration of any
factor necessary to provide justice and ensure equity between the parties. Id.
In reaching its decision, the trial court's final judgment noted the prolonged and
litigious nature of the proceedings. This paternity and child support litigation spanned
from 1996-1999 for the original paternity judgment and another five years regarding
their efforts to modify the judgment.
The court found both parties contentious; its final judgment of modification
described the "litigious nature of this case and the parties' inability to avoid verbal
1
Fla. Patient's Comp. Fund v. Rowe , 472 So. 2d 1145 (Fla. 1985).
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attacks on the other party." In its June 2006 judgment finding Kaiser in willful, indirect
criminal contempt of court for failing to comply with visitation orders, the court stated:
There has [sic] been other times that the Respondent/Father
has violated this Court's order regarding the return of the
minor child as to the date, location and time and has
displayed a cavalier attitude regarding his noncompliance
saying things such as "I don't care what the court order
says."
The court also described the relationship between the parties as "high-conflict" with
numerous involvements by law enforcement. Kaiser also withheld information from
Harrison about the child's whereabouts while in his primary care and did not inform
Harrison of the last name of a person he sent to pick up the child. In part, the court's
ruling that it was in the best interest of the child to continue to attend private school was
based upon the "constant turmoil which exists between the parents." Clearly, its ruling
on attorney's fees was based in part on the overly litigious nature of the parties.
The attorney's fee award of $35,000 is very high. However, Harrison's net
income is significantly less than Kaiser's and her negative net worth is also much less.
Kaiser's self-representation that purportedly required him to expend $142,635.61 in
attorney's fees and costs, alone, demonstrates that he shares responsibility for the
extent of these excess fees. The court's calculation required Kaiser to pay 56% of
Harrison's attorney's fees and costs. This was an extremely litigious case, and under
these unusual circumstances, we conclude that the trial court did not abuse its
discretion in making this calculation.
Accordingly, we affirm the denial of an additional evidentiary hearing for Kaiser to
present evidence of offers of settlement in mitigation of any attorney's fee award, affirm
the trial court's denial of an attorney's fee award to Kaiser for his self-representation,
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and reverse and remand the $35,000 attorney's fee award to Harrison for the trial
court's specific findings regarding the number of hours her counsel reasonably
expended and an hourly rate.
Kaiser argues that the trial court improperly considered his Subchapter S
corporation, The Kaiser Holding Corporation, as an asset. He contends it does not
generate income to him. Citing Zold v. Zold, 880 So. 2d 779 (Fla. 5th DCA 2004), he
argues that it was improper for the trial court to consider this asset in determining an
award of attorney's fees.
However, because the court did not consider any pass-
through income from his holding company, the Zold decision is not pertinent.
The court evaluated all of the financial records concerning Kaiser's income and
business, including tax returns and evidence his corporation paid some of his personal
expenses. It also considered many other factors, including cross-correlative analysis of
Kaiser's income, his debt to the IRS, his actual and other pending bar suspensions, and
his extravagant cash purchases, but concluded that his financial affidavits and income
tax returns were the best evidence of his income.
The court considered Harrison's and Kaiser's net worth as well as their net
monthly income, $3056.88 and $5861.33, respectively. The court also considered the
other factors described in Rosen, 696 So. 2d at 700. As the Rosen court stated, "[h]ad
the legislature intended to limit consideration to the financial resources of the parties,
the legislature easily could have said so." Id. We see no merit to the appellant's
argument that the court improperly included the retained assets of the Subchapter S
corporation in awarding attorney's fees.
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Kaiser argues that the trial court erred in ordering that he pay 57% of the child's
private school expenses. This court reviews for an abuse of discretion a trial court's
order that the noncustodial parent pay private educational expenses as part of child
support. Pollow v. Pollow, 712 So. 2d 1235, 1236 (Fla. 4th DCA 1998) (reversing
obligation that noncustodial parent pay, in addition to child support, $1800 in monthly
private school tuition).
The court calculated the 2005 child support utilizing each party's gross income as
disclosed in their financial affidavits. The guidelines calculation, attached to the final
judgment, shows that Harrison's and Kaiser's respective share of child support are 43%
and 57%. Harrison's 2005 financial affidavit states the monthly expense for the child's
private school is $200. Kaiser's share of private school tuition is $114, or 17% more
than his $665.70 monthly share of child support.
Section 61.30(1)(a), Florida Statutes (2005), permits the court to order payment
of child support which varies, plus or minus 5%, from the guideline amount only upon a
written finding why that guideline amount would be unjust or inappropriate. Private
educational expenses may be awarded as part of child support paid by a noncustodial
parent when that parent has the ability to pay and such expenses are in accordance
with the family's customary standard of living and are in the child's best interest. Wilson
v. Wilson, 559 So. 2d 698, 700 (Fla. 1st DCA 1990). In Luskin v. Luskin, 492 So. 2d
783 (Fla. 4th DCA 1986), the court approved private school for children that attended
the school during their parents' marriage and where the guardian ad litem
recommended that they continue to attend the private school to minimize the disruption
of their lives caused by their parents' separation.
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In this case, the child is now eleven years old and has attended this particular
private school since the child was ten days old. The court considered a psychological
evaluation of the child because she has been embroiled in her parents' controversy
since infancy. The court made specific findings that the child was progressing well in
her school environment and it provided a stabilizing element in the child's life and
should not be disturbed. These findings satisfy the statute's requirement for Kaiser's
child support payment to exceed the guidelines by 17% and represent 17.8% of his net
income. This additional obligation is unlike the child support obligation in Pollow, 712
So. 2d 1235, where the court reversed the noncustodial parent's obligation to pay
private school tuition because it effectively ordered the father to pay 78% of his monthly
income for child support. Thus, we affirm the trial court's order.
Harrison contends in her cross-appeal that her exhibits and testimony
demonstrate that Kaiser enjoys a lavish lifestyle and used his corporation to pay for
personal expenses. The court evaluated both CPA experts' testimony and concluded
that Harrison's expert's cross-correlative approach was too speculative to accept as
evidence of Kaiser's income. Instead, the court determined that the parties' financial
affidavits were the best evidence of their income. There is no dispute that Kaiser owes
the IRS $60,000 in taxes. It is also undisputed that the Florida Bar suspended him for
ninety days pursuant to one grievance proceeding and that two other grievances were
pending at the time of trial. Kaiser testified that the pending grievances had a negative
affect on his ability to earn income.
Harrison's CPA presented no specific evidence of personal expenses paid by
Kaiser's business.
She submitted numerous exhibits that purported to evidence his
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business's payment of such personal expenses. Section 61.30(2)(a)13. deems those
types of payments to be gross income to the recipient.
However, the court plainly
concluded that the parties' financial affidavits were the best evidence of their income.
It is well established that the acceptance or rejection of expert testimony is a
matter within the sound discretion of the trial court, and such decision will not be
overturned on appeal absent a showing of abuse of discretion. Doctors Co. v. Dep't of
Ins., 940 So. 2d 466, 470 (Fla. 1st DCA 2006). The trial court did not abuse its
discretion in finding the cross-correlation testimony to be speculative and unreliable.
Accordingly, we reverse the $35,000 attorney's fee award to Harrison and
remand for the trial court to recalculate the appropriate amount by making specific
findings regarding the number of hours her counsel reasonably expended and hourly
rate. We otherwise affirm the trial court's final judgment.
REVERSED in part, AFFIRMED in part, and REMANDED.
PALMER, C.J. and SAWAYA , J., concur.
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